FCAC: Canadians value consumer protections and strong governance to participate in Open Banking

The majority of Canadian consumers said that “full protection from any losses” and the “ability to revoke consent at any time” would make them more likely to participate in Open Banking, according to new research by the Financial Consumer Agency of Canada (FCAC).

However, the survey indicated that consumer interest in using Open Banking is low, with 52% of Canadians saying they would not participate in an Open Banking system after hearing a definition.

FCAC found that many Canadians need to know more about Open Banking before they decide whether to use it and that the consumer protection measures incorporated into an Open Banking framework – and consumers’ awareness of these – will impact participation.

Of the 21 consumer protection options presented to Canadians in the survey, 18 were selected by over 50% of respondents.

The most popular protection, chosen by 70% of respondents, was “full protection from any losses” if something were to go wrong, with 62% favouring a “clear and easy process to follow to make things right” should they need it.

Of those surveyed, 63% valued the “ability to revoke consent at any time” and the same percentage would like “requirements to report data breaches exposing consumer data”, while 62% chose “enforcement of standard security requirements for Open Banking participants”.

FCAC reported that Canadians also value strong governance and regulatory oversight, given that 53% of respondents selected “making sure someone oversees the Open Banking system to keep consumers protected,” and 54% wanted to be sure that banks cannot pressure them to share their financial data.

The research on Canadian’s awareness and understanding of Open Banking was conducted in May and June 2022.

FCAC intends to use the findings to inform the development of financial consumer protection policy and financial consumer education.

Only 9% of Canadians have heard of Open Banking, with awareness lowest among seniors, francophones, lower income respondents and women.

FCAC founds that those more likely to have heard of Open Banking include younger respondents aged 18 to 44, recent immigrants, and men.

In this Q&A for Open Banking Expo, Steve Boms, founder and president of Allon Advocacy, explains why governance is the “essential building block” of Canada’s Open Banking framework.