In collaboration, EY and Symcor conducted the 2023 EY Open Banking Study, shedding light on the evolving landscape of open banking in Canada. The study emphasized the crucial role of a consumer-centred approach in unlocking the full potential of open banking and maximizing its benefits for both financial service providers and their customers.
Personal banking customers prioritize security when deciding to share data, according to EY study
According to Abhishek Sinha, EY Canada Open Banking Leader, financial service providers must revamp their strategies to prioritize consumers in their acquisition and retention efforts. By doing so, they can establish stronger connections with existing and new customers while adapting to their evolving preferences, ultimately building long-lasting customer loyalty in an increasingly competitive market.
Willingness to share data with Fintechs increases steadily, especially among younger age groups
The study revealed a significant shift in Canadians’ data sharing preferences, solidifying year over year. While security remained the top priority for personal banking customers across all age groups except for 18- to 24-year-olds, the type of data customers were willing to share and with whom exhibited notable changes. Notably, the willingness to share data with Fintechs experienced a steady increase from 2020 to 2022, rising by approximately 16%. Among the 18- to 34-year-old demographic, this growth was even more pronounced, reaching an impressive 27% over the same three-year period.
Financial service providers can capitalize on data sharing preferences
To capitalize on this growing trend, financial service providers have the opportunity to leverage younger customers’ willingness to share data. By harnessing these insights, providers can create innovative products and customized value propositions tailored to meet the specific needs and preferences of this demographic, as highlighted by Sinha.
The study also delved into the data sharing preferences of small- and medium-sized businesses (SMBs). It revealed a contrasting pattern between the two categories, with small businesses displaying a higher likelihood of sharing data when financial incentivization is involved. On the other hand, medium-sized businesses placed greater importance on the integration of non-financial service offerings, such as metrics dashboards, benchmarking, and app marketplaces, in their banking experience compared to previous years. In fact, the study showed a 20% increase in the value medium-sized businesses attributed to the integration of these services from 2021 to 2022. In contrast, the data indicated that small businesses placed 30% less value on these services than their medium-sized counterparts.
Small and medium-sized businesses showcase distinct data sharing preferences and evolving willingness to change providers
The study further highlighted the evolving willingness of small and medium-sized businesses to change service providers. While small businesses demonstrated a decreased willingness to switch providers, medium-sized businesses exhibited an 11% increase in their willingness to seek out the highest financial value, signaling a growing demand for enhanced offerings in the market.
Saba Shariff, Head of New Product Development & Corporate Strategy at Symcor, emphasized the importance of understanding consumer data sharing preferences in both the consumer and business sectors. By prioritizing customer experiences and tailoring open banking strategies accordingly, organizations can pave the way for substantial growth in this new frontier of financial services.
The 2023 EY Open Banking Study, conducted in collaboration with Symcor, provides valuable insights into Canadians’ data sharing preferences, enabling financial service providers to navigate the ever-changing landscape of open banking successfully.