Data sharing, cybersecurity and data protection have emerged as the top concern areas for the banks as well as customers, according to Deloitte's report on open banking. "About 70 per cent survey respondents feel that greater emphasis should be made towards data protection by institutions," said the report 'Open banking: Unleashing the power of data and seizing new opportunities'.

Deloitte said the insights in the paper are supported by extensive research, past work, and credentials, complemented by a survey to understand customer needs with 400 plus respondents across age groups and population codes.

The report further said more than 80 per cent of respondents are uncomfortable in sharing the transaction history of accounts, hinting towards a need for all financial institutions (FIs) to assure customers that their data is secure.

Observing that not only banks, but even customers are wary of data sharing, it said, "Cybersecurity and data protection are the top concern areas across all age groups, followed closely by wariness towards third-party access to data and transparency on data usage".

Over the years, the value of data has reached unprecedented levels.

Countries, globally, are empowering customers with access to institutions of their choice, while jurisdictions are witnessing various approaches to open banking strategy and implementation based on regulatory favourability and industry maturity.

FIs, it said, also have realised that they are now custodians and not owners of data and are trying to move to alternative revenue streams after receiving customer consent. Sandeep Sonpatki, Partner, Deloitte India said the onset of the pandemic has given a boost to welcome digital and API based banking in India with most salaried respondents already being highly comfortable with digital banking.

"However, 69.3 per cent of respondents in our survey felt that greater emphasis should be placed on data protection by the institutions, which makes it very crucial for banks embarking on a journey to develop API-enabled products and services, to have a well-defined roadmap to produce demand-driven solutions and to remain ahead of the curve while maintaining the principles of customer-centricity, security, and trust," he said.

The report further said access to data can be leveraged by FIs for lead generation, cross-selling products, risk assessment, pre- and post-delinquency management, collections strategy, and product development; potentially leading to significant business augmentation, asset quality improvement, operational efficiency, and cost optimisation.

Open banking, the report said, is perceived quite differently across jurisdictions. Some have gone ahead to create a regulator-driven, well-defined framework such as the UK and Australia; while others have followed a more market-driven approach such as India.

The bottom line, however, is providing customers control over sharing their information and servicing them through a targeted, data-driven approach, it added. Open banking also offers scope to increase customer onboarding at remote locations through quick, paperless documentation, verification, and alternate credit risk assessments.

With the onset of COVID-19 and the focus towards digitisation, the report said it believes the next 12-24 months will see a significant shift towards open banking amongst Indian FIs. Companies will invest in building core capabilities to address customers' immediate needs.