How Canadian banks can prepare for open banking

With open banking taking root around the world and Canada looking at following suit, Canadian banks can have a first-mover advantage given they’re already trusted custodians of customer data with strong brands. Banks are starting to evaluate the actions to take, including the following six steps:

Think now, think big

What are the most likely open banking scenarios from a regulatory perspective?
Examine potential partnership options and use cases you could tap into if you proactively adopted an open banking mindset that goes beyond what the regulations require.
Undertake a data-mapping exercise to determine where client data is housed across systems and see what information is available that fits with potential use cases.

Assess your capabilities

Develop potential strategic responses to the scenarios you came up with and assess the capabilities needed.

Adopt new ways of working

Recognize areas of non-core competence that you can address through partnerships.
Partner with FinTechs whenever needed to offer best-in-class services and experiences.

Invest in the future

Continue efforts to reduce or remove reliance on aging infrastructure.
Build people and process capabilities to boost competitiveness.
Make sure you stay ahead of emerging data security and privacy issues to increase customer trust.
Review your security architecture.
Build appropriate controls for fraud monitoring, including solutions related to digital identity.

Pre-empt competition

Achieve market leadership through test cases and experimentation to close product or service gaps.
Compete on excellence by making sure you have top-notch products or services to support your strategy.

Stay the course and don’t slow down

Open banking is a reality, whether as a competitive opportunity or a regulatory requirement.
Choose a long-term business model that makes the most of your product or customer focus.