Clients are wary of open banking: survey

Sharing data with third parties might be vital to creating personalized experience, but Canadians might not be ready.

Open banking is a principle that would allow financial institutions to share a client’s personal information – such as account balances, transactions and payment information – securely with third parties like retailers, social media platforms and fintech companies. While financial information is among the most guarded and tightly regulated in Canada, the sharing of this information is what would allow banks to provide highly personalized experiences in digital environments outside of their website or mobile app, such as on a retailer website, messaging platform or a digital assistant.

But while banks are excited about the opportunities open banking can create, Canadians might not share their enthusiasm, according to recent research by Accenture.

Accenture surveyed 1,564 Canadians to compile the report, which found that 75% of people are wary of the idea of open banking.

The top concerns with open banking were the security and privacy of financial data (according to 62%), trusting large tech companies with their financial information (51%) and not believing open banking will deliver enough value to a change their current behaviour (44%).

While the majority of respondents had major concerns, the survey found some ways Canadians could be more welcoming of open banking. Those include additional procedures such as an authentication password and security questions (34%), biometric technology such as fingerprint or facial recognition (33%) and real-time analysis of their payments to ensure that they conform to regular patterns (32%).

Only 21% of respondents said they would be willing to share banking account data in return for deals or other benefits. But the survey also found that 40% of Canadians don’t understand the benefits of open banking enough to provide third-parties with access to their financial information.

“Open banking is poised to transform banking operations worldwide but remains a relatively new concept to many Canadians,” said Bob Vokes, who leads Accenture’s Financial Services practice in Canada. “A critical element to open banking’s adoption is the right regulatory framework to ensure that consumers can decide which parties safely receive access to their financial information on a case-by-case basis — but to do that they’ll need to be convinced of the benefits.”

In terms of the benefits they are currently seeing, 17% of Canadians said it would be beneficial to see all their financial information in one place, while 14% are attracted to tailored offers based on their data, like a better mortgage rate or higher savings interest rate. Also, 14% of Canadians would consider accessing their bank account information directly from an online retailer so they can view their balance and make a payment without leaving the website or sharing any account details.

Regionally, Quebecers are slightly more likely to be interested in open banking than other Canadians (21% versus 16%, respectively).