A new report by NatWest’s Payit reveals that 42% of UK firms are considering Open Banking to reduce fraud and improve operational efficiency. While the benefits include better cash flow, faster refunds, and secure transactions, slow adoption is driven by limited understanding and lingering trust issues with FinTechs.
A growing number of UK businesses are exploring Open Banking as a potential solution to reduce fraud and streamline payment operations, according to a new report by Payit, the Open Banking payment service developed by NatWest. The findings reveal that 42% of businesses are considering adopting Open Banking tools to enhance data security and eliminate inefficiencies associated with traditional payment methods.
Traditional Data Management Is Costing Businesses Time
The research, highlighted by Open Banking Expo, shows that 22% of businesses spend more than six hours a month managing and storing sensitive data such as credit and debit card details. These manual processes not only consume valuable time but also increase exposure to data breaches and compliance issues. By contrast, Open Banking allows businesses to facilitate secure, direct bank-to-bank payments, removing the need to store customer payment details altogether.
Adoption Hindered by Lack of Understanding
Despite its advantages, Open Banking adoption remains slow. The study notes that 28% of businesses have not yet embraced the technology due to a lack of understanding about how it works. This knowledge gap persists even though 67% of firms reported experiencing payment processing issues that have had negative impacts on their operations.
Operational Pain Points Drive Interest
Beyond security, operational challenges are also pushing businesses toward Open Banking solutions. About 44% of respondents cited inefficiencies that disrupted cash flow, causing delays in payments to staff and suppliers. Meanwhile, 56% acknowledged that slow refund processing hurt customer satisfaction or led to lost sales. Additionally, 51% of businesses admitted that their checkout processes are too complex, potentially turning away customers.
Trust in Banks vs FinTechs
While Open Banking can address these issues, many businesses remain cautious. The report found that 90% of firms trust traditional banks to provide secure Open Banking services, compared to 76% who feel the same about FinTech companies. This preference for banks could slow the growth of independent payment platforms, even as they offer competitive and innovative solutions.
A Step Toward Smarter Payments
Commenting on the findings, Lee McNabb, Head of Group Payments Strategy at NatWest, said:
Businesses are increasingly recognising the need for more efficient and secure payment methods such as Open Banking. Payit by NatWest delivers solutions that not only cater to operational efficiency but also enhance user experience and empower businesses to offer customers a wider choice of payment options.”
Payit claims to help businesses optimise cash flow, gain real-time insights, and ensure secure and seamless payment experiences, reflecting the broader industry shift toward modernising the financial ecosystem.
As businesses continue to search for scalable, secure, and efficient payment systems, Open Banking stands out as a promising, yet underutilized, alternative to traditional payment processing.
