Increased acceptance of Open Banking among Canadians, research finds

There is growing acceptance of Open Banking among Canadians, with banks and fintechs most trusted to share data, according to new research.

A survey by Environics Research conducted among 2,000 Canadians in March 2024 found that 45% of respondents are supportive of authorising their financial institutions to transfer their data to third parties to secure better financial products, an increase from 2023, when 41% of respondents indicated they supported the concept of Open Banking.

Respondents were given a scenario where they already banked with RBC and wanted to find out if TD could provide a more “competitive rate”, which would require them to authorise RBC to send their transaction data directly to TD through “a secure online channel”.

The survey also established the likelihood of consumer adoption by institution type and found that 35% are somewhat or very likely to share data with major international banks with offices in Canada.

Among respondents, 30% are somewhat or very likely to share their data with smaller banks, up from 27% in 2023, while 27% are somewhat or very likely to share data with fintech companies, like Borrowell or Wealthsimple, compared to 24% the previous year.

However, consumers displayed lower levels of trust in technology companies, mobile companies and social media platforms when asked how likely they would be to authorise their bank to share transactional data via a secure online channel with each of those institutions, in order to get a better rate.

Only 20% said they would be somewhat or very likely to share their data with Big Tech companies, such as Google or Amazon, although this was higher than the 17% reported the previous year.

Similarly, 20% of Canadians would likely share their data with companies like Samsung or Google in a mobile tech context, compared to 15% in 2023.

Social media platforms are the least trusted by consumers, with only 13% indicating a likelihood of sharing their financial data with companies like Facebook or LinkedIn, up from 10% last year.

Bernice Cheung, vice president, cultural markets and financial services, at Environics Research, said: “Canadians’ increasing acceptance of Open Banking signals a readiness to embrace new forms of financial data management, provided these are well controlled and deliver clear benefits.

“However, the varying levels of trust toward different institution types underscore the need for stringent safeguards and consumer education.”

She added that with careful implementation, Open Banking in Canada has the potential to offer greater financial flexibility and security.

The Canadian government published details of a framework for consumer-driven banking in the Budget 2024, with the first of two pieces of legislation establishing the framework set to come into effect this Spring.

The Department of Finance said that the implementation of Canada’s consumer-driven banking framework will ensure that Canadians can securely access and share their financial data with financial service providers, and that they will not be subject to fees when doing so.