New peer-reviewed research argues mortgage professionals who built their business on genuine client relationships hold a structural advantage
The open-banking era is arriving whether the mortgage industry is ready or not. With Canada's Consumer-Driven Banking Act now enshrined in law and Phase 1 read-access launching this year, the ground is shifting under the feet of every broker, lender, and credit union in the country.
Clients will soon be able to share their financial data seamlessly across institutions. Switching costs are falling. Rate and product comparisons are getting easier. And the banks, with their deep pockets, direct-to-consumer digital platforms, and retention machines, are already preparing for the most competitive mortgage market in years.
In the midst of all of this, a new peer-reviewed study out of the California Management Review is making an argument that many mortgage brokers will recognise from their own career: that in a world of commoditised rates and digitised approvals, the professional who truly knows their client is not at a disadvantage. They may, in fact, be sitting on the most durable competitive moat in the industry.
Read next: How politics - and open banking - could shape Canada's mortgage market in the years ahead
The paper, written by four business school researchers and drawing on surveys of 109 senior Canadian financial institution executives as well as nine in-depth case studies, develops what the authors call a "relationship-first digital transformation" framework.
It was designed to explain how smaller financial institutions compete effectively against Big Six banks in an increasingly open and automated market. Its logic maps, almost point for point, onto the situation facing Canadian mortgage professionals in 2026.
The renewal opportunity is real – but so is the risk
The renewal wave has been the defining narrative for Canadian mortgage professionals over the past two years. Roughly 70% of all outstanding Canadian mortgages were expected to come up for renewal by the end of 2026, with mortgages originated between 2020 and 2022 facing payment increases of approximately 40%. As CMP has reported, that volume is driving significant origination activity across the channel.
But volume alone does not guarantee broker success. As one industry veteran told Canadian Mortgage Professional recently, a straight renewal scrap with the banks is no easy feat. The banks are preparing a "super aggressive" approach, and competing on rate alone is a losing proposition. "There's definitely a way to continue to secure your clients' businesses," said Leah Zlatkin, chief operating officer at Mortgage Outlet. "A straight renewal, you're probably going to lose that."
The 'massive opportunity' for mortgage brokers in the current market
The new academic research explains exactly why – and what to do about it. Its central finding is that institutions and professionals who treat trust as a primary strategic asset, rather than a residual by-product of completing a transaction, are better positioned as markets open up and products become commoditised.
"As open banking lowers switching costs, competitive advantage increasingly rests on trust, continuity, and relational depth," the authors write. "Digital transformation strategies that treat trust as a secondary outcome risk eroding the very assets that sustain long-term relevance."
What open banking actually does to your value proposition
Understanding the research requires understanding what open banking will actually change in the mortgage context – and what it will not.
Open banking has long been viewed by mortgage professionals as a potential positive step for the sector, offering the prospect of faster income and asset verification, smoother client onboarding, and stronger competition between lenders driven by real-time access to consumers' financial data.
As Tanya Woods of Questrade Financial Group put it, "The fact that Canadians might be able to see their entire financial picture on a single dashboard one day is very exciting because they will have a much greater sense of what they can afford and where the opportunities in their financial picture are."
For brokers, the operational benefits are real. The ability to receive bank statements for income and down payment verification directly from a client's financial institution – a process that already takes as little as two to three minutes through platforms using open banking-style data sharing – will become standard practice as the framework matures.
M3 Group's partnership with Flinks was built precisely on this promise: reducing brokers' administrative burden by more than 50% so they can spend more time on what clients actually value: subject matter expertise.
The challenge is the other side of that coin. As open banking makes financial data portable and product comparisons easier, the friction that once helped keep clients anchored to their broker disappears alongside the friction that anchored them to their bank. When data flows freely and switching is easy, what keeps a client from accepting the pre-filled renewal offer that lands in their inbox three months before maturity?
The research's answer is unambiguous: the relationship.
The gold is already in your database
"One thing I can't stress enough is the treasure trove of data brokers are sitting on," Natasha Duric, vice president of national sales at Manulife, told CMP in its 2025 year-end industry recap. "Their existing databases and CRM systems are gold mines, ripe with potential. I urge brokers to really dive into that data and work it to generate business from their existing clients."
This is precisely the logic the new paper formalises. Its framework describes deploying digital tools to "amplify trust, relational continuity, and human judgment rather than replace them."
For mortgage professionals, that means using technology to stay closer to clients between transactions – surfacing refinance opportunities, flagging rate changes that affect a client's position, proactively identifying when rising equity creates new options – rather than automating the relationship into irrelevance.
Read next: AI is coming for brokers' back office. Some will adapt. Many will not
The paper describes how the most effective institutions evaluated every digital investment through a narrow set of questions: Does this strengthen client trust? Does it improve continuity across touchpoints? Does it enable staff to serve clients more effectively? Technologies that failed those tests – regardless of how sophisticated they were – were deprioritised.
Several institutions in the study chose not to deploy advanced chatbot solutions after client feedback revealed a strong preference for human interaction for complex financial decisions, instead investing in tools that connected clients directly with their adviser.
The parallel for mortgage brokers is direct. A generic, automated renewal email does not demonstrate relationship value. A proactive phone call that says "I know your rate is resetting in 90 days, here's what that means for your specific situation, and here are three options worth considering"- that does.
Don't assume you know who wants a human
One of the research's more counterintuitive findings challenges a widely held assumption in the broker channel: that younger clients are uniformly digital-first and self-directed, while older borrowers want hand-holding.
Read next: How can technology complement a successful mortgage business?
The researchers found consistently the opposite. Retirees were often among the most active users of mobile and remote services. Meanwhile, many younger clients – particularly first-time buyers navigating the stress test, income verification, and down payment requirements for the first time – actively sought human interaction for the most complex and consequential decisions of their financial lives.
Tracy Valko of Valko Financial made precisely this observation to CMP: "I think that's going to be a big driver going into the new year. More of the younger generation are not doing just one job. They've got multiple careers and they're managing differently. If you can piece that together for them and are able to get them into a mortgage, that's a huge win."
The gig economy, self-employment, and newcomer demographics are growing - and these are borrowers whose applications do not fit the banks' criteria and who genuinely need a professional to navigate the system on their behalf.
The paper's framework calls this shift "archetype-based design" – organising service delivery around relational needs rather than demographic assumptions. In practice, that means building service pathways for different client types: the self-directed borrower who wants speed and minimal friction, the first-time buyer who needs education and reassurance at every step, and the experienced homeowner who wants a trusted professional to proactively manage their mortgage position over time. Technology should serve each pathway differently – not collapse them all into a single automated funnel.
Technology as amplifier, not replacement
The research is careful to distinguish relationship-first digital transformation from technological conservatism. The institutions studied made deliberate use of digital tools, analytics, and AI – but applied them with discipline.
As CMP's 2025 Brokers on Lenders report found, technology satisfaction among brokers increased by 10% in 2025, with lenders that offered faster portals and cleaner workflows winning more volume. But the same report noted that the lenders earning the deepest broker trust were those where "technology mattered, but only when paired with human responsiveness and transparency."
Read next: CRA plans verified income tool amid mortgage fraud concerns
The same dynamic applies at the broker level. AI and digital tools that reduce the administrative burden – document collection, condition tracking, application processing – create genuine value when they free the professional to do more of what clients actually pay for: informed, personalised advice on the most significant financial decision of their lives.
The risk is treating those tools as a substitute for the relationship rather than a support for it. As one industry observer recently noted in CMP, "Technology is a key piece… However, when interaction is virtual, it can be easy to fall into a transactional relationship with clients. As a result, brokers miss an opportunity to build a relationship and foster loyalty."
What this means in practice
Several practical implications emerge from the research for Canadian mortgage professionals.
Stay close between transactions, not just at renewal. The brokers capturing disproportionate renewal and refinance business are those who maintained a meaningful presence throughout the mortgage lifecycle. Regular, personalised outreach - not automated rate alerts, but genuine check-ins tied to the client's specific situation - is the foundation of retention.
Use open banking tools to reduce friction, not to remove yourself from the process. The administrative gains from open banking-enabled data sharing are real and worth capturing. But the goal should be spending the time freed up on deeper client conversations, not on acquiring more clients at the same level of service depth.
Design your service model around client archetypes, not ages. The self-employed borrower, the newcomer to Canada, the retiree exploring a reverse mortgage, the first-time buyer navigating the stress test for the first time - each needs a different kind of support. Build distinct service pathways for each, and invest in the tools that enable those pathways rather than those that homogenise them.
Read next: The best mortgage lenders in Canada according to brokers - Brokers on Lenders 2025
Treat your client database as a strategic asset. The research found that the most resilient institutions were those that used data and analytics to enhance advisory quality - identifying needs, anticipating decisions, and delivering relevance - rather than to automate client interaction. Your CRM is not a mailing list. It is a map of the relational capital you have built over years.
The bottom line
Canada's mortgage industry is entering a period in which many of the structural advantages that have defined competition for decades – proprietary product access, information asymmetry, the friction of switching – are being systematically reduced by regulatory reform and technology. How the broker channel evolves through that transition will define the industry's next decade.
The new research from the California Management Review provides an academic framework for what the best brokers in Canada have always known intuitively. The industry's strongest argument – the one that has driven broker market share steadily upward – is that Canadians navigating a complex, high-stakes financial decision deserve the guidance of an informed, independent professional.
That argument has prevailed through rate cycles, regulatory changes, and a pandemic. Open banking will not defeat it. But it will expose the brokers who were never really delivering on it.
In a commoditised market, competing through trust may prove to be not a constraint on digital transformation, but its most durable foundation.
The paper, "Relationship-First Digital Transformation: How Small Financial Institutions Can Compete in an Open-Banking World," by Murat Kristal, Andreas Strebinger, Johnny Rungtusanatham, and Ting Cao, was published in the California Management Review in February 2026.
