Open banking holds the promise of providing Canadians with richer and more inclusive banking experiences, but there's an issue: most Canadians don’t know what it entails or how their financial information would be used.

“Given how important data-sharing is to open banking, we believe adoption is dependent on improving awareness and education on how this framework could increase consumer choice and improve financial outcomes for Canadians,” says Equifax Canada’s Chief Data Officer, Sandy Kyriakatos.

The missing piece: Consumer awareness

Just 34 percent of Canadians understand that open banking allows them to securely share their financial data between financial institutions and authorized third parties, according to our recent survey with Leger Research. A little more than half think it is simply having the ability to bank with any institution, while 44 percent think it refers to banks sharing information about victims of fraud with one another.

While Australia and the U.K. have already legislated the sharing of data between financial institutions, only 28 percent of respondents were aware that the system exists in other countries.

Securely sharing financial data

For open banking to become commonplace once it’s available in Canada, the broader population will need to provide consent to having their financial data shared between institutions. According to our survey, four out of five Canadians (81 percent) believe that people in Canada should be more careful about protecting their banking data.

• 79 percent worry about privacy breaches containing their personal information

• 73 percent have concerns about how well financial institutions protect their personal data

At the same time, 45 percent of respondents said they never read the terms of use before creating a new account.

• 51 percent of those who have read terms of use said they understood them

• 54 percent said they never read online privacy policies

The report also found that 81 percent of Canadians avoid sharing any more than the minimum about themselves when opening accounts.

Building trust between customers and the financial industry 

According to the survey, 56 percent of respondents said they would be more likely to allow financial data sharing if they had “clear information about how my data would be used.” Others said they’d share data if they trusted, or already had accounts with, both institutions involved; if they had a solid understanding of why data sharing would benefit them; and if the government had provisions in place to protect their data from misuse.

“As an industry, we need to do a much better job of defining open banking, which will get us to a simple mechanism giving consumers transparency and control over the access and use of their financial information,” says Kyriakatos. 

At Equifax, we’re bringing more awareness to open banking, both by participating in the open banking ecosystem and by helping consumers better understand how their data is used. Learn more in our Open Banking report.

Survey methodology: 

Leger conducted a consumer online survey on behalf of Equifax Canada between October 29 and November 1, 2021, of 1,554 Canadians.

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