Canadian consumers want easier access to all their financial information and accounts and banks are well-placed to meet that demand.
A new report from PwC published Monday says that ‘open banking’ is an opportunity for Canadian banks to reduce costs while also reducing risk of fraud and money laundering.
That’s because financial institutions would be able to share information with each other and third parties such as fintechs and large technology firms.
But the report highlights the importance of getting the customer experience right.
"Customer expectations are evolving rapidly and they are looking for a one-stop-shop where they can find all their financial information," says Diane Kazarian, National Banking and Capital Markets Leader, PwC Canada. "Banks could be among the biggest winners of open banking if they seize the opportunities it brings to create a better customer experience."
The report shows that Canadian consumers have high levels of trust in their banks with regulation ensuring privacy and security concerns are addressed.
But for open banking to continue to uphold the high standards of the regulated financial institutions, third parties will also need to focus on strong risk management, the report says.
"Financial institutions who get ahead of the issue now will be in the best position to get an early start on their plans and strategies as well as help shape the future of Canadian banking," adds Paula Pereira, Banking Consulting Leader, PwC Canada. "Leveraging their strong customer trust and combining it with the right innovation, open banking will position the Canadian banks for success in meeting customers evolving needs for digital interactions and greater control over their data."
The federal government is currently assessing the merits of open banking.