The Consumer Financial Protection Bureau (CFPB) recently released a report listing regulatory concerns regarding how gaming and virtual reality companies facilitate transactions and collect sensitive data.
As “Video Games and Banking in Virtual Worlds” makes clear, the CFPB sees both industries processing transactions and collecting the type of information typically associated with banks and payment systems. I am.
“Games and virtual worlds allow players to store and transfer valuable assets, including in-game currency,” the report says. “…To leverage value, gaming companies are beginning to incorporate financial products and services, such as their own payment processors and money transfer devices.”
But regulators are concerned about more than just the trade. The report also calls on businesses in both industries to collect financial data, purchasing history, spending thresholds, location data, employment information and biometric data.
While many older consumers share the CFPB’s concerns about organizations having access to this sensitive data, younger consumers clearly do not.
At least that’s what PYMNTS Intelligence found when completing its “Consumer Sentiment on Open Banking Payments.” This study examines how receptive consumers are to data sharing in support of open banking, a legal framework that allows secure data sharing between financial institutions (FIs). -Party Fintech.
The report, conducted in conjunction with Trustly, found that while most young consumers would not feel comfortable sharing their financial data under an open banking framework, a significant proportion of older consumers would not feel comfortable sharing their financial data under an open banking framework. It turns out that even if you could have received your payment sooner, that’s not the case.
64% of baby boomers and seniors who have not used open banking say security and trust are the main reasons for their hesitation. Only 44% of Gen Z and Millennials share these concerns.
This is especially noteworthy because younger consumers are a little more cavalier when it comes to sharing their data. He said 72% of Gen Z and 66% of Millennial consumers surveyed for the PYMNTS study are more likely to use open banking payments if it offers benefits such as faster payments. showed enthusiasm. Meanwhile, only 42% of Gen X respondents and 22% of baby boomers and older adults said the same.
Despite young consumers’ strong interest in using open banking, few currently use it. Only about 11% of all U.S. adults (approximately 27 million people) have made at least one Open Banking payment in the past year. In contrast, an estimated 68 million consumers go the old-fashioned way by manually entering account and routing numbers, 52 million use their bank’s bill payment service to make payments, and 26 million A person was using a digital wallet.
PYMNTS Intelligence determined that the disconnect between intent to use open banking-enabled payments and actual usage is largely due to a lack of awareness. Of his 89% of consumers who did not use open banking last year, 44% said they were simply unfamiliar with open banking.
It should be noted that the CFPB is a supporter of open banking and encourages financial institutions to support this framework. Open banking is the secure and consented sharing of information in a highly regulated industry (banking).
With 80% of Gen Z and half of Millennials reportedly spending up to 80 hours a week gaming, it’s easy to see why the CFPB would focus on gaming companies and virtual world operators. Both industries have succeeded in attracting two consumer groups that share his CFPB’s enthusiasm for open banking, but both operate with little regulatory oversight. Anyway, anyway.
