10 minute read 4 Feb. 2022
ey-banking potential

How hyper-personalization helps FIs boost open banking 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.

10 minute read 4 Feb. 2022
Co-authored by Cormac Leddy, Nathan Lautens and Sev K.H. Keil
Cormac is a senior manager in EY Canada’s Technology Consulting practice and a thought leader on our Open Banking team. He has over ten years of consulting experience in financial services spanning a wide range of functional areas and lines of business. His work has contributed to shaping EY Canada's perspectives on a Canadian open banking ecosystem, working with our teams around the world to bring these insights to Canada.
Nathan is a senior consultant in the practice, a frequent contributor on the topic of open banking, and works with our clients and global teams to support them in achieving their open banking vision.
Sev K.H. Keil is the founder and chairman of TrueChoice Solutions, a global leader in real-time preference analytics. Sev is a recognized thought leader on digital marketing, strategy and analytics topics with over 20 years of experience as an executive, an entrepreneur and in academia .

With consumer expectations rapidly changing, hyper-personalization can help FIs boost open banking potential to lead in the post-pandemic market.

In brief
  • Customers are increasingly aware of open banking topics, including consent, data sharing, and incentivization schemes.
  • Customers are more willing to share data and they expect clearly articulated value in exchange.
  • Financial institutions need to increase focus on hyper-personalization of products and services.

Three key ways hyper-personalization helps financial institutions boost open banking potential

From open banking and open data to real-time payments and digital identities, we’re witnessing a generational shift in the way Canadians are interacting with financial institutions (FIs). The ripple effect of these evolving trends creates a paradigm shift in the role FIs play in their clients’ lives. This is creating a burning platform for FIs to adapt business models, operations, processes, risk management and technology priorities. Taken together, these emerging trends represent a world of possibility for financial services providers and their customers.

In 2020, EY commissioned TrueChoice to ask 1,000 Canadian personal banking clients about their preferences, decision drivers, value perceptions and expectations with respect to data sharing. This year, we went back to Canadian personal banking clients — as well as small and medium-sized businesses (SMBs) — to understand how their preferences have evolved and spot emerging trends as we move towards an open banking regime.

What did we uncover by taking the pulse of Canadian consumers? Ongoing changes, reinforced by a pandemic-fuelled surge in digital interactions and transactions, are driving a sharp increase in the amount of data financial services providers collect from clients. Across the board, clients are now more willing to share data with their financial services providers. Interestingly, clients are also willing to share more data about themselves, including sensitive data about their preferences, non-financial personal data, online behaviour data, transaction data at other FIs and work-related data.

That said, how can FIs capitalize on the data-sharing trend to make the most of this opportunity? 

1. Customers expect data sharing to be secure and easy. Make it so.
Increasing awareness and importance of security

In this year’s survey results, security maintained its title as the attribute personal banking customers care most about when they consider sharing data. Regardless of how we analyzed our survey results, personal banking clients overwhelmingly indicated that security is top of mind for them, and that FIs must deliver on this promise. We expect consumers to continue placing a high degree of importance on security, as value propositions based on enhanced data sharing continue to emerge.

SMBs’ willingness to share data correlates directly to security awareness

In contrast to retail clients, SMBs show highly stratified security preferences. On the one hand, 56% of SMBs are very open to sharing data and are not particularly concerned about security (assuming that security is foundational). On the other hand, another swath of SMBs must be convinced that data sharing does not expose them to breaches, and that data sharing is occurring through secure channels.

Ease of sharing data is very important to clients

When it comes to how clients opt in to share their data with a financial institution, both SMB and personal banking clients have strong preferences. Personal banking clients prefer to opt in and select data attributes. This approach is 85% more popular than other models. SMB clients demonstrated a similar preference for controlling what data they are agreeing to share. To that end, they ranked “opting in, but all data is shared” as the least popular approach. FIs should take this as a clear signal: your clients are interested in sharing data but want the opportunity to control what data they’re agreeing to share.

FIs must also prioritize making data sharing as seamless as possible for SMBs. SMBs that use business management tools had a 42% higher preference for using application programming interfaces (APIs) as a data sharing compared to those that do not use business management tools. What’s more, SMBs using these tools were 37% more interested in automatically reconciling their ERP/accounting data with banking data compared to SMBs not using these tools.

   How can you capitalize on this insight?

  • Raise client awareness around your secure data-sharing methods to help increase opt-in rates.
  • Invest in developing granular consent mechanisms that align to target clients’ specific preferences.
2. Retail banking clients expect personalized experiences more than ever. Embrace that shift.
Client loyalty is strong, but waning for some service providers

In the financial services sector, there has been a long-held belief that the arrival of open banking will lead to clients, particularly younger ones, flocking away from big banks and credit unions towards FinTechs and other challengers. Despite this fear, Canadian retail banking clients showed a strong degree of loyalty to their existing service providers across the board. On the aggregate, personal banking clients are 275% more willing to share data with an existing provider than a new one. Although clients 18 to 44 years old indicated above-average interest in working with a new service provider (22% higher), they still have more than 200% greater willingness to share data with their existing provider than a new one.


Data is not homogeneous, and neither are clients

We also found that retail clients do not see their data as a monolith. Rather, their preferences are highly differentiated when comparing willingness to share different types of data. Personal banking clients are comfortable with sharing product preferences — it was the sixth most important attribute overall — but enticing people to share sensitive information requires significant and meaningful incentives. In fact, the data suggests a sequential approach, where banks first ask clients to share non-identifiable preference data, which they can use to personalize a value proposition that can lead to an increased propensity to share more sensitive information. In terms of enticing clients to share additional data, respondents indicated that accessing exclusive deals and more personalized offers were as valuable to them as a financial incentive worth 10% of the fees they are currently paying. 

Value must be articulated in financial terms

Across all groups, clients expect a significant incentive for what they consider more sensitive personal information. In fact, the expectation of a financial incentive in exchange for data sharing has increased by over 50% since 2020. In our most recent survey, clients also showed a 25% stronger preference for incentives expressed in financial terms over those expressed in non-financial terms. Interestingly, this was not the case for credit union clients, who did not have a strong preference for financial incentives over non-financial ones. These insights are compelling for banks and challengers: if you want your retail clients to share more data, you must find a way to articulate their incentives in financial terms. Credit unions on the other hand have more flexibility in terms of how their customers perceive the value of different type of incentives. 

   How can you capitalize on this insight?

  • Adopt a client advocacy-based approach to strengthen trust with your clients.
  • Leverage a progressive data acquisition strategy and communicate value exchange in financial terms. 
3. SMBs will be better served with increasingly granular personalization. Develop strategies accordingly. 
Medium-sized businesses are more willing to engage in data sharing 

When it comes to data sharing, no two SMBs are the same. Medium-sized businesses (100 to 499 employees) are roughly 30% more willing to share data across the board than small businesses (under 100 employees). When looking at medium-sized businesses’ willingness to share valuable data that could be stored in accounting platforms, payroll systems or e-commerce tools, this number jumps to 40%.

Unlike the retail segment, medium-sized businesses showed relatively homogeneous preferences in their willingness to share different types of data. The only exception to this is for purchasing, sales and inventory data, which medium-sized businesses are 20% less likely to share than the second lowest option. This likely indicates that these organizations see this as an especially valuable piece of data, one they may be unwilling to give up without significant incentives.

Although medium-sized businesses are more willing than smaller businesses to share data in general, they are also 64% more willing to do so with emerging players such as big tech, FinTechs or challenger banks. We look forward to seeing how this trend will play out in the coming months and future iterations of our survey. 

SMBs need capabilities beyond banking and a better understanding of the value of data sharing

Business management tools are a key differentiator between the SMB and retail banking market segments. Why? A significant amount of relevant data is stored in business management tools that FIs do not currently have access to. Our research found that nearly 60% of medium-sized businesses use some form of business management tool such as accounting software or a CRM, while only 25% of small businesses use any. This presents a few different opportunities for FIs when it comes to how they partner with their SMB clients:

  • Supporting SMBs of all sizes in digital transformation: FIs that want to better understand their SMB clients must find ways to help them store relevant business data in digital formats. You have an opportunity to support SMBs across digital transformation by partnering with providers that build business management tools. You can then choose to provide these products as a service directly to SMB customers. As previously mentioned, close to 75% of small businesses, and more than 40% of medium-sized businesses, would stand to benefit from this service.
  • Integrating banking products into new channels: FIs might also consider offering traditional banking products — such as loans through distribution channels — that typically fall outside of their own ecosystem. For example, you could provide short-term loans directly through accounting software to help SMBs better manage cash flow.

Despite the opportunities presented above, SMBs ranked non-traditional services such as a business tracking dashboards or a marketplace of tools as sixth out of nine possible priorities included in our survey. Furthermore, medium-sized businesses ranked non-traditional services as the least important category on the aggregate. This tells us that offering these products to SMBs is not enough. FIs must also invest the time and resources to educate SMBs on the value these non-traditional services can deliver.

Hyper-personalization is the most important value exchange attribute

When it comes to incentivizing SMBs to share data, financial services providers must find ways to deliver highly personalized offers. Unlike personal banking clients, SMBs are not as clearly motivated by financial incentives. The smallest SMBs — those with less than $500k in annual revenue — are highly motivated by financial incentives, while those with larger revenues showed very limited interest in the same financial incentives. Business life stage is another key determinant for an SMB’s preferences on incentivization. SMBs that are growing are 57% more interested in non-financial incentives such as such as ease of purchase or rewards points than those that are winding down.

All these variations across demographic characteristics of SMBs reinforce the case for hyper-personalization for this market segment. Put simply: no two SMBs are alike. Your outreach to them shouldn’t be, either.

   How can you capitalize on this insight?

  • Reconsider traditional banking models by assisting SMBs in digitally transforming their financial operations.
  • Take a hyper-personalized approach to determining which incentives work for each type of SMB client. Remember: incentivization isn’t as simple for SMBs as it is for personal banking clients.
How do financial institutions move forward from here?

Consumer expectations haven’t simply changed. They’ve done so at a remarkable pace, one that’s gaining momentum as time surges on. Hyper-personalize value propositions with specific clients in mind. Build your open banking strategy around unique differentiators and use cases. Invest in data and analytics capabilities so you can develop more personalized customer offerings. Tackling these areas now will divide the leaders from the laggards in the post-pandemic market.

If you’re interested in learning more about our survey, we would be excited to share a personalized report about your financial institution’s customers’ preferences. 



Financial institutions are very well positioned to reap the benefits of open banking. Customer interest is peaking across all segments and the value equation is becoming clearer. Small and medium-sized businesses (SMBs) are willing to deepen relationships with their existing banking providers in exchange for tools and propositions that can help them grow. The EY study is a deep dive into the preferences of retail and SMB customers, what data they’re willing to share, with whom they’re willing to share it and what they expect in return.

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.