Putting consumer data preferences at the Core of Open Banking Strategy
Open Banking has the potential to enable innovative financial services for consumers and small businesses alike – the key to seizing that potential lies in knowing your customers best in order to create meaningful and longstanding connections. supplied
With over 25 years of industry-wide expertise, Symcor enables secure data exchanges for many of Canada’s largest organizations. By developing solutions that address common challenges, Symcor provides both agility and security to meet evolving market needs. This critical balance is especially important as the country progresses on its Open Banking journey.
Open Banking has the potential to create innovative financial services that can benefit consumers and businesses alike. The key to seizing its potential lies in recognizing customers’ needs to establish longstanding and meaningful connections.
Symcor partnered with EY Canada for their annual EY Open Banking Survey, to explore the data-sharing preferences of Canadian consumers and businesses. Commissioning TrueChoice Solutions, a global leader in real-time preference analytics, Canadians were surveyed on their decision drivers, value perceptions and expectations for data sharing.
Topline results show that Canadian consumers continue to have a high level of trust in their existing financial providers, demonstrated by an increased willingness to share data with their incumbent provider in exchange for services. In addition, there is movement seen in personal banking consumers’ willingness to share data with new providers if the value proposition resonates. With small and medium-sized businesses, we see that divergent preferences underlie the need for distinct and targeted strategies when it comes to data sharing.
Key Insights to Support Your Open Banking Strategy
Here are the top data-sharing trends seen across Canadian personal banking customers as well as small and medium-sized businesses:
Security remains the most important factor when deciding to share data. It is imperative that organizations continue investing in security and educating their customers of its importance. Over the last three years, for every age group surveyed, with the sole exception of 18- to 24-year-olds, security has consistently been the most important variable in a personal banking customer’s decision to share data with their financial provider.
Increasingly high levels of trust with incumbent financial providers. Personal banking customers’ willingness to share data with their existing providers is increasing year over year. Between 2020 and 2022, there was a near threefold increase in consumers’ willingness to share data. Based on the trust Canadians hold with their incumbent providers, there is immense opportunity to grow customer loyalty by offering new and innovative products.
Growing willingness to share data with new financial providers. From 2020 to 2022, there has been a 16 per cent increase in consumers’ willingness to share data with new fintech organizations. That trend was even more notable among 18- to 34-year-olds over the same three-year period, at 27 per cent growth. This highlights the potential to attract new customers by offering tailored solutions that provide relevant and tangible value.
Small and medium-sized businesses require distinct and targeted strategies for their divergent preferences. Financial incentivization for sharing data has a far greater impact with small businesses, which are often highly cost sensitive. In contrast, medium-sized businesses place a higher degree of importance on “beyond banking” services, such as business metrics dashboards, benchmarking and app marketplaces. In fact, these businesses valued integration of these types of services almost 20 per cent more in 2022 than in 2021. The data suggests that targeting the medium-sized business segment with these types of services are more likely to have a greater impact than financial incentivization.
Enabling Open Banking Readiness
Symcor is committed to supporting Canada’s Open Banking framework by operating with a balance of agility and security, factors which are critical to an inclusive Open Banking system that works for all Canadians.
By understanding consumer data-sharing preferences, vital connections can be created to acquire new customers and deepen existing relationships. By keeping key customer personas, expectations and values at the forefront, and embedding customer experience into the core of Open Banking, organizations can pave a solid path leading to meaningful growth.
For the full survey results, visit Symcor.ca.
To view this report on The Globe's website, visit globeandmail.com
To view the full report as it appeared in The Globe's print edition: Open Banking