Open Banking ‘presents opportunity’ for Canada’s SMBs

Ellie Duncan
11 Jul 2023

Open Banking will help solve Canadian SMBs’ pain points, which were “magnified” by the Covid pandemic and, crucially, will increase competition, according to a panel moderated by CGI’s David Hooper at Open Banking Expo Canada.

Hooper, vice president Open Banking and payments consulting at CGI, opened the panel discussion titled ‘How to meet SMBs’ unique needs with Open Banking’, by saying: “We, like most people in the room, think that Open Banking presents an exciting opportunity for SMBs in Canada.

David Hooper

CGI’s David Hooper

“So, that’s what we’ll talk about today: the services and products that they need, how to modernise their financial operations, make it easier for them to run and manage their businesses.”

He added: “We’ll explore how Open Banking can bring that stability and assist with their financial lives. Because, as we all know, SMBs employ a very large percentage of the Canadian population and they contribute an awful lot to the economy.”

Hooper was joined on the panel by Cyrielle Chiron, senior vice president, product strategy and innovation at Peoples Group, Paul-Emile McNab, vice president, business development and membership experience at the Canadian Council for Aboriginal Business, and Victoria Clark, associate vice president, payments at ATB Financial.

The line-up was completed by Corinne Pohlmann, senior vice president, national affairs and partnerships at the Canadian Federation of Independent Business, who identified several “pain points” for Canada’s small and medium-sized businesses post-pandemic.

“We’ve estimated that about 50% of small businesses are carrying pandemic debt, that averages at around $100,000 per small business. Many of them are still not at their normal revenues from pre-pandemic,” she told delegates.

“Therefore, they’re looking for resources, they’re looking for ways to cut costs, they’re looking for ways to find other types of financing and we look to the banking sector… to help them through what is a pretty difficult time.”

She added that, besides the financial costs of doing business, there is also “the administrative burden” that many SMBs have to bear.

McNab agreed: “Certainly, with the pandemic they’ve taken on much more in terms of debt, the red tape, inflation – it’s definitely been a difficult period.”

Corinne Pohlmann

Corinne Pohlmann of the Canadian Federation of Independent Business

ATB’s Clark observed that many of the key pain points for SMBs are similar to those experienced prior to Covid-19, but that the pandemic “magnified” them.

Addressing pain points

When asked by Hooper how Open Banking can address these pain points, Clark noted that “Open Banking is such a huge driver of what can be done to provide advice at scale” and that this is the “next step” for ATB.

Open Banking can help SMBs with business efficiencies, according to Chiron, who explained that entrepreneurs “are experts in the idea they launched [a business around], but not in running a business itself”.

For Pohlmann, Open Banking will bring competition, which she said, “is something we don’t have enough of in Canada when it comes to lending and banking services”.

“Being able to actually compare and contrast much more easily… is one of the benefits of Open Banking,” she added.

Chiron said it is important to have a framework and standards in place, and that “innovation will come”.

“It’s [about] how do we make it in a way that it’s standardised and is a common framework, so that whatever is out there is safe and secure for consumers and business owners.”

Listen to David Hooper on the Open Banking Expo Unplugged podcast, discussing Canada’s Open Banking and payments journey so far.