While the technology offers significant benefits, consumers cite privacy concerns and other risks that must be addressed
While open banking opens exciting new possibilities for financial firms to offer better service, a new poll shows that it may take a lot of work before they can get their clients to buy into the idea.
In an online survey commissioned by Accenture, Leger asked over 1,500 Canadians how they feel about the concept of open banking. An open-banking system would allow the secure sharing of financial information — account balances, transactions, payment information, and so on — with registered third-party providers such as authorized retailers, social media platforms, and fintech companies.
Allowing different registered parties to share this information would let them provide consumers with better services, including to insights on their credit situation and personal finances. But despite this, 75% of respondents said they are wary of the concept due to numerous concerns such as:
- The security and privacy of financial data (cited by 62% of respondents);
- Trusting large tech companies with their financial information (51%); and
- Believing that the value offered by open banking will be enough to drive a change in their current behaviour (44%)
Still, those opposed to the idea are open to changing their minds. The survey found that Canadians could warm up to open banking if they saw certain measures taken to address their concerns. Among the participants, 34% said they wanted authentication password and security questions, 33% cited biometric technology such as fingerprint or facial recognition, and 32% wanted real-time analysis of payments to ensure they’re in line with their usual spending.
“Open banking is poised to transform banking operations worldwide but remains a relatively new concept to many Canadians,” said Bob Vokes, who leads Accenture's Financial Services practice in Canada. “A critical element to open banking's adoption is the right regulatory framework to ensure that consumers can decide which parties safely receive access to their financial information on a case-by-case basis — but to do that they'll need to be convinced of the benefits.”
The survey results indicate a need for public education to change consumers’ perceptions and advance adoption of open banking. Forty per cent of Canadians said they don’t understand the benefits enough to allow third parties to access their financial information, and 20% said they would want to know more about measures to protect consumers from potential fraud before deciding whether open banking appeals to them.
Some are already interested. Around one in five respondents (21%) said they would be willing to share banking account data with registered non-banking third parties in return for better deals or other benefits. Another 17% saw benefits from seeing all their financial information in one place, while 14% were intrigued by the possibility of getting tailored offers like better mortgage rates or higher interest on savings. Also, 14% said they would consider accessing their bank account information without leaving an online retailer’s website to view their balance and make a payment without sharing any account details in preference of a credit or debit card.
“As we assess the impact of digital transformation in the financial space, open banking knocks down silos and makes transactions much more efficient," said Andrew McFarlane, Accenture's global head of open banking. “The technology is beneficial to both consumers and businesses because it enables smarter and faster decision-making.”
