Open banking in Canada:

Whether you’re shopping online, sharing a social media post, or tapping a link on your phone, you’re sharing data with third parties. However, when it comes to financial data-sharing, many of us are more conscious of security and privacy. To address this, the Government of Canada and the financial services industry are developing an open banking framework that will allow Canadians—with their explicit consent—to safely share their banking data with accredited third parties. Once it's implemented, users will gain greater control over their finances and access to new resources to improve their financial outcomes.

Flipping the script on data-sharing

Open banking in Canada investigates how banking institutions, financial technology companies (fintechs), and regulators can facilitate an approach to open banking that puts the consumer at its centre. We conducted a survey of 1,030 Canadians to understand the current consumer sentiment on sharing personal information online and understanding of open banking. Based on the survey findings, there is work to be done to improve consumer awareness and understanding of how open banking works. Unlocking the potential benefits requires a targeted, consumer-centric framework that fosters trust and paves the way for widespread adoption so all Canadians can benefit.

How Canada’s journey begins

Open banking offers an enhanced user experience. Open banking platforms provide users with better data protection safeguards and more streamlined experiences—helping them to better manage their finances.
Our recent survey revealed that we need to foster more trust surrounding open banking among Canadians. In the resulting report, we share four distinct insights that can help make this happen:

1. Increasing Canadians’ awareness of all aspects of open banking should be a top priority.
   
2. Features should be geared to consumers’ wants and needs.
3. Focus on equity and inclusion is needed.
4. More transparency on security measures can boost consumer confidence in and adoption of open banking.

The more a targeted, user-centric approach is used in response to these insights, the more likely we are to see Canadians’ trust grow.

1. Increasing Canadians’ awareness of all aspects of open banking should be a top priority

Despite it being a common practice in Canada, only 35% of Canadians feel comfortable sharing their data online in general. Interestingly, once presented with the concept that their consent is a foundational aspect of open banking, 45% indicated they would feel comfortable using it to share their financial data online once the framework is implemented. 

Raising awareness can be the key to further improve Canadians’ comfort and trust in open banking, helping to unlock value and increase the likelihood of successful uptake. Survey respondents who indicated familiarity with open banking were significantly more comfortable sharing their financial data, with 70% in agreement. 

Before its 2020 rollout in Australia, only 25% of Australians had heard of open banking. To promote awareness, there was an educational campaign on the benefits, risks, and safeguards, which facilitated its release in the market. To drive adoption in Canada, we’ll need to follow this example.

2. Features should be geared to consumers’ wants and needs

We trust what we can control. Open banking gives people the power to take control of their financial outcomes—so financial institutions and other players should tailor their applications to their customers’ needs.

So what do Canadian consumers want? Here’s what they told us:

If platforms are designed to meet these needs, it is likely that more Canadians will embrace open banking once it becomes available.

3. Focus on equity and inclusion is needed

Open banking applications and practices must be accessible to all Canadians—regardless of their age, gender, location, economic status, etc. However, our survey revealed some equity and inclusion gaps.

Our report outlines how a joint effort among multiple industry stakeholders can help overcome these gaps.

4. More transparency on security measures can boost consumer confidence in and adoption of open banking

No single party can drive trust and awareness by itself—this will require continual and coordinated action across financial institutions, fintechs, consumer groups, and regulatory agencies. To help open banking become a widely trusted system by Canadians, we need educational campaigns, recognizable brands, privacy safeguards, and consistent messaging.

Building trust with the Canadian consumer could start with:

• Specific design features, like receiving notifications when someone attempts to gain account access
• Liability guarantees for security purposes, including a maximum liability statement
• Ability to wipe data, and to provide and revoke data-sharing consent
• Support from their primary financial institution

For open banking to succeed, we need to focus on transparency, ongoing consumer education, and continual communication for support.

Taking the first step toward a better financial future

Canadians are ready to take advantage of open banking. But we’re only at the start of this journey. Ongoing, coordinated efforts to build and maintain consumer trust will be crucial to its success and to unleashing its full potential. People want a financial ecosystem grounded in safe financial data-sharing practices that supports their economic goals. If we can unlock open banking, they’ll walk through that door.