Press release

9 Mar. 2022 Toronto, CA

Digital surge encourages more than half of Canadian small-and medium-sized businesses to share data with third parties

Hyper-personalization is the key for financial institutions to maximize open banking potential

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Dina Elshurafa

EY Canada Specialist, Public Relations

Constantly asking questions, generating new ideas and creating innovative solutions to achieve measurable results. Always caffeinated and on the look out for hole-in-the-wall restaurants in Toronto.

  • Compliance with security standards is a top priority for small- and medium-sized businesses when sharing data
  • Personalized services are the most important value exchange attribute for SMB business owners
  • Non-financial business service offerings are an untapped opportunity to deepen relationships

The EY Consumer Directed Finance survey reveals that a pandemic-fuelled surge in digital interactions and transactions is driving 56% of small- and medium-sized businesses (SMBs) surveyed to share their business data with financial services providers in exchange for personalized, technology-fuelled solutions to meet their needs.

“The impact of the pandemic on SMBs has created a significant opportunity for financial institutions to revisit their value proposition and pivot from service provider to strategic business partner,” says Abhishek Sinha, EY Canada Open Banking Leader. “But achieving that customer relationship will require increased education and awareness of the security investments being made by Canadian financial services providers to help address concerns around privacy and ethical data use.”
The ability to protect data and respond to the latest security threats — from channels to back-end processing — is critical to fostering customer trust. Among SMBs most reluctant to share data, 37% cited data security as their top concern for not doing so. 

“The business case is there but now, financial services providers must actively communicate the benefits and build trust with clients to deepen relationships,” adds Sinha. “Deploying advanced technologies at scale and leveraging clients’ data assets can help create insights-based products and customized solutions that drive strategic business decisions and market agility, while eliminating friction.”

Medium-sized businesses may be more convinced — roughly 30% indicated they were more willing to share data across the board, compared to small businesses. And more than half (64%) are comfortable doing so with fintechs or competitor banks. But preferences for the type of data shared is shifting. The majority of respondents across Canada are 20% less likely to share purchasing, sales and inventory data.

“To address the different needs of each SMB customer, financial institutions need to forgo the one-size-fits-all approach and move beyond traditional banking parameters to augment with non-financial services that can help clients run their businesses more efficiently,” suggests Paul Battista, EY Canada Financial Services Leader. “One way to help clients understand the value of data sharing is by partnering with providers that build business management tools.”

The EY survey finds business management tools could offer a service that 75% of small businesses, and more than 40% of medium businesses, would stand to benefit from. With a significant amount of relevant data from business management tools — such as accounting or customer relationship management software — financial institutions have a unique opportunity to support clients in innovative ways, partnering with providers that build business management tools and delivering these products in an integrated fashion, as a service directly to SMB customers.

“The pressure is on to meet increasing customer expectations while maintaining the security and stability that underpins trust,” says Sinha. “Financial services providers looking to capitalize on new growth opportunities need to build an open banking strategy around unique differentiators and use cases, invest in analytics and leverage enhanced data sharing to change how services are delivered.”

Find more open banking insights in the EY Consumer Directed Finance survey.

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About the survey

To understand the financial services landscape, EY worked together with TrueChoice to ask 1,000 Canadian banking customers about their preferences, decision drivers, value perceptions and expectations with respect to data sharing, in order to learn more about evolving consumer expectations and emerging trends as we move towards an open banking regime.