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Dutch cautious about sharing payments data: PSD2 impact study

Amsterdam: research for De Nederlandsche Bank examines citizens' willingness to share their payments data (and with whom) | Credit: Michael Bußmann; Pixabay

A quarter of the Dutch citizens during the past year authorised the use of their payments data in exchange for the provision of new services, according to a survey commissioned by the Netherlands’ central bank.

But people largely gave authorisation to their existing ‘main’ banks, with other companies – referred to as ‘third parties’ – given permission ‘only occasionally’, the De Nederlandsche Bank (DNB) said as it unveiled the data.

The Amsterdam-headquartered DNB ran the survey to assess the impact of the first year of the European Union’s revised Payments Services Directive (PSD2) being in force in the country. The aim of PSD2 is to boost competition, security and transparency, acting as a trigger to so-called ‘open banking’. Open banking enables bank account holders to share their data with third parties such as fintech companies through what are known as open APIs (Application Programming Interfaces).

There were 2,593 respondents to the survey, which was undertaken in August among members of the Dutch research institute CentERpanel.

Asked whether they had given consent for payment data use during PSD2’s first year, 23 per cent said they had shared their data with the bank with which they have their main account; six per cent had shared with other banks of which they are a customer; and two per cent each had shared their data with an insurer or a ‘large technology firm’, such as US-headquartered firms Apple, Facebook and Google. Young people are more inclined to give consent than older people.

‘It takes time…’

The UK is widely seen to lead Europe when it comes to rolling out open banking. But other European counties are implementing things differently. Whereas the UK has the Open Banking Implementation Entity (OBIE) and the ‘CMA9’ order – which required the nine largest banks and building societies to participate in and pay for open banking’s introduction – other European countries have no such direct mandate.

The Netherlands’ open banking landscape was summarised as having made a ‘reticent start to a promising future’ by Accenture three months ago. Open banking in the country is ‘in its nascence’ meaning that ‘it’s too early to validate its journey yet’, the consultancy said.

Reacting to the DNB survey, Don Ginsel, founder of Holland FinTech – a membership organisation – told Global Government Fintech: “It’s just early. APIs are still shaky and so new solutions built on it [them] are still not adding much value. Hence the hesitation with consumers. It takes time, just like we saw in the UK.”

Assessing the data, the DNB said that ‘banks appear to have a strong competitive position in this new market’.

Citizens, according to the survey, have more confidence in their own bank than in other parties. Confidence in the bank of their main payment account is highest: on average 3.4 on a scale ranging from 1 (‘very little confidence’) to 5 (‘very much confidence’). ‘Big techs’ score an average of 1.9.

Respondents were also asked to indicate how privacy-sensitive selected data are on a scale of 1 (‘not privacy-sensitive’) to 7 (‘very privacy-sensitive’).‘ Personal ID data’ was seen as most private (average score of 6.3), followed by ‘wealth and debts’ (6.1), health data (6.0) and payment data (5.9). Other scores were  ‘personal characteristics’ (5.5), ‘location data of smartphone’ (5.5), ‘social contacts’ (5.4), ‘contact details’ (5.4), ‘search behaviour on the internet’ (5.3) and ‘personal preferences (5.1).

The DNB concludes that people’s willingness to give new entrants to the payment market access to their payment data in exchange for PSD2 services in the coming year is ‘likely to remain limited’. But the central bank also says that ‘it is striking that a large proportion of Dutch consumers have not yet been offered new services; not by their banks, nor by other parties’. It adds that consumers’ attitudes ‘may still change in case this happens’.

Furthermore, the central bank notes that ‘further growth in payment data services could also be stimulated by giving consumers more control over the use of their own data and providing them with better insight’. It adds: ‘This may solve part of the confidence issue and will allow them to reap more benefits from such data use. In addition, safe handling of the data remains important, as much value is attached to the privacy of payment data’.

Dutch ‘reluctant to share their data’

“The research clearly shows that trust is key in sharing of financial data,” Dutch Banking Association (Nederlandse Vereniging van Banken) head of communications Bart van Leeuwen told Global Government Fintech. “It clearly shows that [Dutch] consumers are reluctant to share their data but do trust banks to keep their payments data safe, and offer additional services, for example personal financial management and account aggregation. The main challenge for other parties will be to create value propositions that clearly benefit consumers, while also making sure that their privacy concerns are adequately addressed.”

Gijs Boudewijn, deputy general manager of the Dutch Payments Association (Betaalvereniging Nederland), said he was unsurprised by the DNB’s results. “First, the Dutch retail payments market is pretty mature, with online payments such as iDEAL [an established e-commerce payments platform backed by big Dutch retail banks] – that makes is hard for newcomers to make a real difference. Second, consumer behaviour is slow to change and trust in new service providers needs to grow,” he told Global Government Fintech.

But Boudewijn added: “Gradually we will see new business models coming up as trust grows and consumers overcome their privacy concerns when sharing their payments data with other parties than their own bank.”

Roderik Vrolijk, senior associate at Benelux law firm Stibbe, said: “The Netherlands has historically been one of the European countries with the highest internet penetrations, and has been the incubator for many successful fintech firms, such as Adyen and Mollie.”

Vrolijk, a fintech specialist, added: “Dutch customers are keen to explore the new services offered following the introduction of PSD2, and perhaps the stereotype of being money-savvy makes the Dutch keen to explore how payment data access can actually help them.”