Can engaging customers better unlock open banking’s full potential?

By Abhishek Sinha

EY Canada Partner, National Banking Technology Leader

Senior leader focused on the transformative impact of technology on various industries. Dreamer. Futurist. Dad.

8 minute read 1 Feb. 2021

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  • How Canada should approach open banking (pdf)

Key insight on Canadian consumer sentiment in a world of financial services choice.

Seismic shifts were already redefining the financial services industry well before the COVID-19 pandemic took hold. New entrants, changing customer expectations, shifting consumer demographics and next-gen business models were transforming the market. As the crisis lingers, there’s now an even greater need to innovate services, offerings and experiences to evolve at pace with consumer realities. Doing so will require a more complete understanding of the customer than ever before, one that’s grounded in data collected securely, reliably and with explicit consumer consent through channels like open banking.

Co-authored by Cormac Leddy
Cormac is a senior manager in EY Canada’s Technology Consulting practice and a thought leader on our Open Banking team. His work has contributed to EY Canada’s market and regulatory understanding of open banking in the Canadian market. With nine years of consulting experience in financial services, Cormac’s experience spans a wide range of functional areas, including risk, technology and data, across multiple business lines, including retail banking, capital markets, wealth and asset management, and insurance.

By enabling customers to direct how their data is shared from existing providers to third parties, open banking represents revolutionary possibilities for individuals, businesses and financial institutions. But unlocking that potential requires an ecosystem of trust, where customers understand both the upside of data sharing and how they can benefit.

Canada’s financial institutions know: solidifying customer buy-in can be easier said than done. Even as the industry relies more and more on this kind of data to build relevant customer experiences, challenges like ensuring security and creating trust continue to put up real barriers.

To understand this 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 a new breed of consumer banking services. We wanted to learn more about how customers view data, what they require to feel comfortable sharing it, and what motivates them to do so.

Several key themes emerged from our research:

  • Data sharing is more personal than ever, and that influences what kind of data customers are willing to share.
  • Demand for new services requires access to sensitive data, even as many customers become increasingly protective about their personal information.
  • Who you are, and how your institution commits to securing data, impact what data customers are prepared to share.
  • Sharing data requires value in return. But, just as important, different customers define that value exchange in different, non-financial terms.
  • Aligning the right value proposition and the right service with the right customer has never mattered more.

In this report, we connect these findings to key questions financial institutions must ask as they build enhanced data sharing models, supporting the innovative customer experiences and value propositions that will propel progress now and in the future. 

What kinds of data are Canadians willing to share?

Not all data is created equal. That sentiment resonates loudly across study respondents. All demographic groups show varying degrees of willingness to share data based on what the data is. Product preference data consistently emerged above the rest.

Depending on age, 44% to 52% of all respondents prefer to share product preference data. This shoots up to 63% among students. That’s in stark contrast to financial account or account balance data, which respondents are considerably less willing to share.

What does that mean? Product preferences feel less personal and thus less risky to share; allowing access to the data provides a compelling potential upside for the customer. Privacy is a high priority right now, with cybersecurity threats rising in the face of the pandemic. Information about product features and customer preferences appears less personally damaging in the case of a potential data breach. On the flipside, sharing this data appears more likely to produce higher-quality, personalized banking experiences and targeted offers.

Taken together, Canadians appear to be on board for embracing limited data sharing risks if there is a clear line between sharing data and a better experience. Therein lies a wealth of opportunity – particularly if you layer in loyalty.

Younger respondents are at once most likely to share their data and to consider switching financial institutions. Because younger people are more willing to share data (including product preferences), financial institutions that tap into this intel can uncover new ways of innovating, personalizing customer experiences and potentially developing new business models.

More broadly, those customer experiences represent a golden opportunity to strengthen relationships or create entirely new ones designed specifically to seize on this demographic’s openness to switching institutions. The ability to build on that natural willingness represents a compelling lever for financial institutions today.

What questions should financial institutions ask now to make the most of these findings?

  • Does our customer acquisition strategy capture and capitalize on an individual customer’s desire to share data?
  • How can we drive value for our existing client base and enrich their relationship with us based on what they’re willing to share now?
  • Where can we draw more on personal preference data to continually evolve banking experiences for older demographics, who are most likely to stay with us?

Which conditions dictate whether a customer will share their data, and with whom?

Your role in the financial services ecosystem makes a difference. Customers clearly want to control what data they share. They also share differently based on the kind of organization they’re dealing with. While 44% to 51% of all respondents are willing to share personal product preferences with big banks, this range is considerably tighter across big tech firms, fintech, insurance companies and non-financial firms. Those numbers see a further squeeze among older respondents, with those 55 and up least likely to share data with non-traditional institutions like big tech or fintech firms. (Interactive Chart A - Data sharing preferences by age)

What does that mean? Newer and emerging companies have a long way to go to cultivate the kind of trust that encourages more data sharing. They’ll have to deliver significantly more value to win that trust. From a customer’s ability to opt in (or out), to the security standards you maintain, customers expect a high degree of security and flexibility around data sharing.

By the numbers, 74% of respondents prefer enhanced authentication (including two-factor and biometric authentication options). Single-factor authentication is table stakes, and no longer appears to be enough. That finding cuts across demographics, from the 75% of 18 to 24 year olds to the 79% of 65+ who agree enhanced authentication is essential to earn trust.

There is real value to getting this right, as trust is the lynchpin to accessing the kind of deep customer understanding that fuels new solutions, and your ability to truly innovate value propositions. Developing flexible opt-in capabilities and ramping up security features can generate stronger relationships that, in turn, lead to greater data sharing.

What questions should financial institutions ask now to make the most of these findings?

  • How can we improve trust with both customers and prospects so they can reliably and securely share data with us?
  • Are we providing the level of granularity that enables consumers to share data with the right partners?
  • Do we know consumer preferences for security features on data sharing and are we acting on that knowledge?

What value do customers expect in return for sharing data?

Data sharing is a two-way street. In a market where data is more valuable than ever, consumers are asserting their ownership of it and expect a clear value exchange for sharing information. But keep in mind: not all rewards are financial. Your customers are looking well beyond the traditional value drivers ascribed to financial services and demanding more. Embracing that mindset – and evolving accordingly – is critical to strengthening loyalty, especially in a world with expanding choice in financial services providers.

In fact, much of a customer’s willingness to switch providers is tied back to the perceived value of products and services. Across all demographics, savings and chequing accounts, credit cards and insurance ranked among the product sets customers believe are likely to deliver the most value for them personally. For financial institutions looking to optimize value proposition design (e.g. offers, pricing), these products represent prime opportunities to demonstrate value for data. (Interactive Chart C - Financial firm preferences by age)

Respondents prioritized a host of different non-financial incentives. About 20% of those aged 18 to 24 pegged the convenient ability to receive and compare alternative offers among the rewards they valued the most. That figure dropped significantly among older respondents, with only 11% to 16% of those 45 and up calling the convenience factor a top priority. Factors like rewards points, access to exclusive deals, and even frequent flyer miles in exchange for data sharing rank considerably higher among older respondents.

What does that mean? Younger customers show a greater propensity for switching financial institutions and are much more interested in comparing alternatives in exchange for sharing their data. At the other end of the spectrum, older respondents express greater loyalty and a stronger interest in accruing different kinds of non-financial rewards.

Either way, financial institutions that show the right kind of value for the right kind of customer have a strong ability to cultivate relationships and loyalty over the long term. Reimagining how you reward data sharing doesn’t just lead to better data generation. It can also cultivate long-lasting relationships – and that’s absolutely essential to long-term success.

What questions should financial institutions ask now to make the most of these findings?

  • How can we tailor our value proposition for each customer segment to incent data sharing?
  • Which consumer segments are more likely to switch providers, and what incentives are necessary to encourage that shift?
  • What additional measures should we take to retain consumers who are at risk of attrition to other ecosystem players?

Where do we go now, next and beyond?

The ability to innovate with specific customer needs in mind is a powerful tool. In today’s increasingly competitive financial services environment, this means continuously evolving products and services to be – and remain – relevant in the face of changing customer realities.

Institutions that seize this moment to engage customers in the potential of open banking can generate the robust data they need to develop integrated product, technical and digital engagement strategies. Doing so now could very well distinguish industry leaders from laggards in an environment where even fast followers could find it daunting to catch up.


Data sharing is more personal than ever. By allowing customers to direct how their data is shared from existing providers to third parties, open banking represents revolutionary possibilities. Institutions that seize this moment to engage customers in the potential of open banking can create the data they need to successfully develop integrated strategies.

About this article

By Abhishek Sinha

EY Canada Partner, National Banking Technology Leader

Senior leader focused on the transformative impact of technology on various industries. Dreamer. Futurist. Dad.