Taiwanese consumers willing to allow banks to share data for Open Banking-based services – but privacy objections must be overcome for wide adoption

New research from Unisys Corporation (NYSE: UIS) into Taiwan’s banking industry reveals that Taiwanese consumers are willing to embrace new bank services based on emerging technologies such as Artificial Intelligence (AI) and machine learning. They are moderately willing to support data sharing in an open banking environment, but only if privacy and security concerns are addressed.

Unisys APAC Banking Insights – Banking on the CX Factor is a study about the attitudes of banking customers in Taiwan, Australia, Hong Kong, Malaysia and the Philippines. This year’s report explores how consumers feel about banks using AI to assess eligibility for credit cards and home loans, as well as sentiment toward banks sharing data with non-bank entities to offer new services – known as Open Banking.

Customer Frustrations

The top annoyance for Taiwanese bank customers is long queues, cited by 38 percent of respondents. In addition, Taiwanese are more frustrated than consumers in the other four countries if they have to repeat themselves, or when an “online” service needs to be completed by printing out a document or visiting a branch, or when their credit card is frozen due to suspected fraudulent transitions.

“The survey shows Taiwanese bank customers are annoyed by a fragmented experience. They are keen to use digital services but they seek a seamless omnichannel relationship so that they can start a transaction in one place and pick it up in another without having to start over. Banks must remove the organizational, process and technology silos between business functions. Then artificial intelligence and machine learning technologies can be used to help banks deliver targeted and relevant online services across all channels,” said Richard Parker, vice president financial services, Unisys Asia Pacific.

Balancing Artificial Intelligence with the Human Touch

The survey reveals that Taiwanese bank customers have a strong appetite for tech innovations to enable digital bank services – depending on the type of transaction. Sixty-two percent of Taiwan consumers are comfortable with their bank using software and algorithms to assess online credit card applications – the highest level of support of the five countries surveyed. However only 34 percent are willing to use this for home loans.

“There is a great opportunity for Taiwan’s banks to use smart software to lead decision making for commodity products such as credit cards. But currently consumers are less willing to use this for life events such as home loan applications which involve larger financial amounts and emotional involvement,” said Parker.

Readiness for Open Banking

Open Banking is a growing initiative in the financial services sector that allows banks to share data with other organizations in order to offer new services to customers and new revenue streams for the banks. Thirty-seven percent of Taiwanese support their bank sharing their personal data with other companies to access financial products. However, 31 percent do not support it, citing concerns about privacy and security. Taiwan recorded the highest level of concern around the ability of both the bank and third party to secure their data.

“For Open Banking to really take off in Asia, banks must address customer concerns about how they protect their customer data – not just in the bank, but across all of the departments, partners and agencies in the value chain. Doing business in the 21st century requires dynamic software that adapts to business trends and evolves with security concerns. Unisys’ Retail Banking Delivery platform, Elevate™, is secured with Unisys Stealth®, an identity-based micro-segmentation security software that allows banks to microsegment and conceal critical assets and establish encrypted channels for secure user, application and system communication,” said Parker.

Unisys has taken steps to make banking easier by introducing new software called Elevate™, an end-to-end, digital banking software platform and suite of applications designed to help financial institutions deliver an instantly secure, omnichannel banking experience to their customers. Importantly, this means customers will be able to pay their bills on the go, transfer funds and apply for loans and mortgages anytime, anywhere – regardless of whether they are doing so on a mobile device or tablet, via an internet browser or inside a branch. The platform incorporates a high-level of security, as built-in adaptive biometric and data analytics securely identify customers, authenticate access and validate transactions. More than 500 financial institutions worldwide rely on Unisys solutions. For more information on Unisys’ financial services capabilities, please visit http://www.unisys.com/industries/financial-services.

For more information, download the full Asia Pacific Banking Insights survey results and infographics here.

Research Methodology

Research firm OmniPoll conducted the online survey in November 2017, polling nationally representative samples of at least 1,000 people aged 18+ years in each of: Hong Kong, Australia, Hong Kong, Malaysia, the Philippines and Taiwan.