Consumer-centred approach is key to maximize open banking potential
- Security remains the most important factor when deciding to share data
- Data sharing preferences have become more pronounced, with age-based nuances emerging
- Non-financial business service offerings are an untapped opportunity to deepen relationships
The 2023 EY Open Banking Study conducted in collaboration with Symcor, reveals that Canadians are now three times more willing to share data with financial service providers that they have an existing relationship with — compared to 2020 – and this willingness grows as age increases.
“To unlock the full potential of open banking, financial service providers across the board need to build out a strategy that puts consumers at the centre of their acquisition and retention efforts,” says Abhishek Sinha, EY Canada Open Banking Leader. “Not only will this push providers to connect better with existing and new customers, but it’ll help them address evolving preferences to build customer loyalty in a sea of rising competition.”
Customer data sharing preferences are solidifying year over year
Over the last three years, for every age group outside of the 18- to 24-year-old cohort, security has consistently been the most important variable in a personal banking customer’s decision to share data with their financial provider. But the survey finds that the kind of data customers are willing share – and with who — is evolving. Willingness to share data with Fintechs has increased steadily from 2020 to 2022 by approximately 16%. That growth was even more notable among 18- to 34-year-olds over the same three-year period, at 27%.
“Financial service providers can capitalize on younger customers’ willingness to share data to create insights-based products and customized value propositions,” adds Sinha.
Tailoring value propositions for small- and medium-sized businesses (SMB)
When it comes to SMBs, small businesses are more likely to share data if there is an element of financial incentivization involved. On the contrary, medium-sized businesses place a higher degree of importance on integrating non-financial service offerings such as metrics dashboards, benchmarking and app marketplaces in their banking experience than in prior years. In fact, medium-sized businesses valued integration of these services 20% more in 2022 than in 2021. Whereas the data suggests that small businesses value these services 30% less than their medium-sized counterparts.
In addition, small and medium-sized businesses’ willingness to change providers is evolving. While small businesses are showing a decreased willingness to change, medium-sized businesses have become 11% more willing to change providers, from 2021 to 2022, as they are looking for the highest financial value.
“By understanding the consumer data sharing preferences for both consumers and businesses, and putting customer experiences at the core of open banking strategy, organizations can pave a solid path leading to meaningful growth in this new frontier in financial services,” explains Saba Shariff, Head, New Product Development & Corporate Strategy at Symcor.
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Symcor enables secure data exchanges and supporting business processes, to help clients succeed in an evolving digital world. Trusted by Canada’s largest institutions for over 25 years to support their digital transformations, Symcor aligns industry participants to solve common challenges in the most effective and efficient way. For more information, visit symcor.ca.
About the survey
In its third consecutive year exploring Canadians’ data sharing preferences, EY teamed with Symcor and commissioned TrueChoice Solutions, a global leader in real-time preference analytics, to ask Canadian banking customers about their decision drivers, value perceptions and expectations with respect to data sharing.
This news release has been issued by Ernst & Young LLP.
SOURCE EY (Ernst & Young)