Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Digital, NEO, Open Banking, Open Finance
Open Banking: Revolutionizing Financial Data Sharing
Open Finance | Jan 17, 2024
Image by stockgiu on Freepik
Open Banking 101: An Explainer on the Future of Financial Services
Today we're sharing a great measured and informative 101 Open Banking piece based on a recent Q&A interview between Mark McQueen, Founder at Wellington Growth Partners (Interviewer) and Fintech VC Christian Lassonde, Founder and Managing Partner of Impression Ventures (Interviewee) called 'What is Open Banking and Why Should I Care?'. While readers should definitely delve into the entire interview, below is a summary along with an update on a few global open banking trends.
What is Open Banking?
At its core, Open Banking is a digital tool that allows individuals to access and share their bank statements securely. It represents a shift from the insecure practice of sharing online banking credentials to a more secure method of data sharing. This innovation is not just about "improving the plumbing" of financial services but revolutionizing how consumers and businesses interact with financial data.
See: Canada’s Open Banking Journey: Interview with Abe Karar, Chief Product Officer, Fintech Galaxy
Open Banking finds its utility in various domains. To provide just a few examples:
- Identity Verification: Services like Wealthsimple use Open Banking for confirming user identities.
- Credit Monitoring: Platforms such as Borrowell and Credit Karma utilize it for analyzing bank statements.
- Lending Decisions: Lenders use transaction history for underwriting models.
- Small Business Accounting: Tools like Freshbooks and Quickbooks access banking data for daily reconciliation.
Countries like the UK, which have embraced Open Banking and report significant benefits
If embraced by North American governments, consumers could see benefits similar to those in the UK, including better financial management and access to competitive financial products. Small businesses, in particular, could see substantial gains from tailored financial tools.
- Increased Service Adoption: More consumers are using Open Banking services.
- Enhanced Financial Management: Users report better budget management and expenditure reduction.
- Savings and Expenditures: Open Banking has helped users save more and build financial cushions.
- Trust in Services: High levels of satisfaction and trust have been noted among users.
Top Positive and Negative Comments from the Interview
+ Open Banking is a significant step towards empowering consumers with control over their financial data.
+ It promises to bring innovation and competition to the financial services sector, benefiting consumers and small businesses alike.
+ Enhanced security measures in Open Banking could reduce the risks associated with traditional banking methods.
See: FCAC Survey Results: Understanding the Canadian Consumer’s Perspective on Open Banking
- The need for robust protections and security standards against data breaches and fraud is paramount.
- Establishing clear governance and liability guidelines is crucial.
- The shift to Open Banking could disrupt established financial institutions (impact on TradFi)
Implementation Steps in Canada
The framework for Open Banking in Canada is almost ready, but the choice of an oversight body remains a key issue.
In the November 2023 Fall Economic Statement, the Canadian government committed to introduce open banking legislation in the 2024 budget. This legislation will allow consumers to securely share their financial data with trusted third-party providers. It aims to increase consumer control over financial data, boost competition, and encourage the development of innovative financial solutions, signaling a shift towards a more consumer-focused financial environment in Canada.
The government also announced the expansion of Payments Canada eligibility (membership). This expansion will enable a broader range of financial institutions, including payment service providers to participate in Payments Canada. This organization is leading the development of a new Real-Time Rail payment system. The change is expected to lower transaction costs and speed up the transition to faster, more secure payment systems, thereby improving the efficiency and inclusivity of Canada's financial infrastructure.
Global Perspectives on Open Banking
United Kingdom
The UK is a pioneer in Open Banking, having mandated data sharing among banks. This has led to increased service adoption, enhanced financial management, and high user satisfaction reaching a new milesstone 11.4 million payments as of July 2023. The UK's approach, regulatory-driven, contrasts with the consumer-driven momentum in the U.S. and Canada. However, questions remain about the long-term impact on traditional banking institutions and the balance between innovation and regulation. The UK government has published recommendations for the next phase in open banking here.
United States
In the U.S., the momentum for open banking is largely driven by consumer demand (not regulators), particularly from younger, digitally native customers. This contrasts with the approach in the UK and Europe, where open banking has been more regulatory-driven. Open banking in the U.S. is seen as a way to provide valuable insights to financial institutions, leading to new products and marketing innovations. Data aggregation is particularly useful for offering personalized services. Some of the largest U.S. banks have historically resisted open banking, especially when mandated by regulation. Concerns include protecting customer data relationships and the complexities and security risks associated with sharing customer data through open APIs.
See: Visa Survey: Insights into Consumer Preferences for Open Banking
Without a clear regulatory framework, there is uncertainty among American banks about potential liabilities. However, the open banking ecosystem in the U.S. has evolved with financial players often partnering with fintech companies like Plaid, Akoya, and Fiserv.
In fall 2023, the CFPB proposed a rule focusing on consumer control of personal financial data. This rule aims to boost competition by preventing financial institutions from hoarding data and requiring them to share it at the consumer's direction. The response from the industry, including the American Bankers Association and digital banks like Chime, has been mixed. While there is support for the idea of establishing clear rules, concerns remain about operational expenses, liability, and the scope of the rule.
There are industry calls for the CFPB's proposal to go beyond open banking and be more inclusive, covering different types of financial products like payroll data, Buy Now, Pay Later services, and digital wallets, which are crucial for many consumers.
Australia
Australia's journey in Open Banking is noteworthy for its Consumer Data Right (CDR) legislation, which empowers consumers to control their data. This approach has spurred innovation and competition in the financial sector. However, challenges around data security, consumer awareness, and participation of smaller financial institutions remain areas of concern. Learn about NatWest Group's vision for moving forward with Open Banking.
You can watch an episode of NCFAs Fintech Fridays podcast to learn more CDR here: Canada’s Open Banking Journey: Taking inspiration from Australia’s Consumer Data Right with Kate O’Rourke, Treasury’s First Assistant Secretary for the CDR
Outlook
Open Banking stands at the forefront of financial innovation, offering a plethora of benefits for consumers and businesses. However, its successful implementation hinges on addressing security, governance, and regulatory challenges. Stay tuned to NCFA Canada for more updates and insights on Open Banking and other fintech innovations.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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IP Influence on Apple Pay & Alipay’s Business Models
IP Innovation and Strategy | Dec 20, 2023
Image: Yunan Huang, CEIPI, Masters of IP Law and Management
Decoding IP's Power Play in Apple Pay vs. Alipay's Success
In FinTech, two giants stand out and are worth of deep comparison: Apple Pay and Alipay. For both of these platforms, Intellectual Property (IP) has been instrumental in shaping their business models and strategic approaches. This article compares the two approaches, drawing insights from a research project conducted by Yanan Huang, a graduate of the Master of Intellectual Property Law and Management at CEIPI, University of Strasbourg.
Apple's FinTech IP Strategy
Launched in 2014, Apple Pay has become a cornerstone of Apple's FinTech offerings and offers a simple yet secure transaction method. It leverages Near Field Communication (NFC) technology, which has been the subject of numerous patents. Apple's focus on making transactions secure and seamless has driven its innovation and patent applications in this area. Its business model, as detailed in the research, is built around providing customers with a trustworthy payment option. This is achieved through strategic partnerships with vendors and banks, leveraging Apple's premium brand and IP rights. The Business Model Canvas for Apple Pay highlights its value proposition of security and convenience, which has been a significant factor in gaining customer trust.
See: AccelerateIP Launches New $12.5 Million IP Program for Startups
Apple places a strong emphasis on security and privacy, which is critical in the financial sector. Patents related to secure authentication methods, encryption, and data protection are a significant part of Apple's IP strategy. Technologies like Touch ID and Face ID, which have applications in financial transactions, are underpinned by a robust patent portfolio.
The Apple Card, a credit card offering created in partnership with Goldman Sachs, showcases Apple's interest in expanding its financial services. The integration of Apple Card with Apple Pay and the Wallet app involves patented technologies that enhance user experience and security.
Beyond just payment processing, Apple Wallet allows users to store and manage digital versions of tickets, boarding passes, and loyalty cards. The technology behind this digital wallet, including its integration with other Apple services, is protected by a range of patents.
Apple continues to explore innovations in payment technologies, including peer-to-peer payment systems and contactless payments through Apple Pay Cash and potentially in areas like cryptocurrency and digital wallets.
In summary, while Apple may not be a FinTech company in the traditional sense, its influence in this sector, driven by its IP strategy and innovative payment technologies, is significant. Apple's foray into financial services with products like Apple Pay and Apple Card, backed by a strong patent portfolio, underscores its role as a key player in the global FinTech landscape.
Alipay's Patents and Fintech Ecosystem
Alipay is not just a payment service; it's part of a larger ecosystem that includes e-commerce, cloud computing, and other financial services like insurance and investment products. Patents related to the integration of these services ensure a seamless user experience and strengthen the ecosystem. Alipay's slogan, "EVERYTHING, IMMEDIATE, EVERYWHERE," encapsulates its approach.
See: CIC Launch Delayed Impacting Innovation Funding Landscape
Alipay's core service is digital payments, and the company holds numerous patents related to online payment technologies. These include patents for secure transaction processing, QR code payments, biometric verification methods like facial recognition, and more.
Ant Group has been a pioneer in applying blockchain technology to financial services. They have developed and patented several blockchain solutions aimed at enhancing the efficiency, transparency, and security of financial transactions. This includes patents for blockchain-based cross-border payment systems and supply chain financing solutions.
Alipay leverages AI and big data analytics to improve user experience and security. Their patents in this area include fraud detection algorithms, credit scoring models, and personalized financial product recommendations, all of which are crucial for maintaining the integrity and competitiveness of their platform.
So Who Has A Better Strategy and Greater IP Influence? Do You Agree?
The research project also sheds light on the marketing strategies of both platforms. Apple Pay focuses on three pillars: Apple Wallet, Apple Pay, and Apple Card, promoting these services across physical, digital, and social media channels. In contrast, Alipay's TechFin ecosystem includes payment, insurance, financial planning, lending, trading, investment, data analysis, and security services, including blockchain technology.
See: AI Inventorship is A Legal Dilemma in Patents
From a FinTech perspective the research concludes that Alipay seems to have an edge over Apple Pay. It operates independently from Alibaba, aiming to encapsulate a complete FinTech ecosystem, whereas Apple Pay is more of a complementary service within Apple's broader product range. Market-wise, both platforms dominate in their respective domestic markets but face challenges in international expansion. Apple Pay's single-service approach contrasts with Alipay's comprehensive range of financial services.
Secret Sauce
Beyond intellectual property, key players have a multi-pronged approaches to their business model and strategic positioning. Ultimately, companies must execute efficiently and manage evolving market, geopolitical, and regulatory risks to remain on top, including:
-> Continuous investment in research and development is key to staying ahead in the FinTech patent race. These companies invest heavily in exploring new technologies and their applications in finance.
-> Companies like Alibaba and PayPal process billions of transactions, providing them with vast amounts of data. This data is crucial to garnish insights and develop new financial technologies and services.
-> These leaders do not just focus on one aspect of FinTech but explore, innovate, and operate across diverse dimensions like payment processing, cybersecurity, blockchain, and AI, ensuring a broad and impactful patent portfolio.
See: IP Box: Would a special IP income tax rate boost Canada’s flagging innovation?
-> Many of these companies actively acquire startups with promising technologies or collaborate with other industry players to expand their technological capabilities.
-> Having a global footprint allows these companies to understand and innovate according to the diverse needs of different markets, making their patents more globally relevant.
-> Understanding and navigating the complex regulatory environments in different regions is crucial for FinTech innovation. These leaders are adept at aligning their patent strategies with regulatory requirements.
Conclusion
While Apple Pay capitalizes on the strength of Apple's brand and its secure, user-friendly payment service, Alipay's comprehensive ecosystem approach, backed by robust technology and a wide range of services, sets a different standard in the industry. Which company will emerge as the dominant force in the future of FinTech, Apple Pay or Alipay, and why? In what ways can new players in the FinTech space leverage IP to challenge the dominance of established giants?
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Synctera Officially Launches in Canada With Live Platform
Embedded Finance | Dec 18, 2023
Image by pch.vector on Freepik
Synctera's Canadian Platform is Now Officially Live
Last week on Synctera's blog, they announced that its Canadian platform was officially live. Back in March 2023, Synctera announced its expansion into Canada to help build and launch fintech apps and embedded banking products, along with a $15 million investment round led by NAventures, the corporate venture arm of the National Bank of Canada. This investment also saw participation from The Banc Funds, a noted private equity investor, along with sponsor bank partners Veritex Community Bank, Midland States Bank, and Emigrant Bank. This diverse group of investors represents a strong vote of confidence in Synctera's business model and its applicability to the Canadian market.
Synctera's journey began in the United States, a market known for its vast size and dynamic economic environment. The U.S. served as an ideal launchpad for Synctera, providing a robust ecosystem for financial innovation, access to capital, and a mature Fintech infrastructure. This initial phase in the U.S. allowed Synctera to refine its offerings, align with regulatory standards, and establish a strong foothold in the Fintech domain.
See: Embedded Finance: Banking Meets the Customer
The expansion into Canada represents a calculated move into a market that, while smaller than the U.S., is rapidly gaining recognition for its commitment to technological innovation and a progressive regulatory environment. Canada's unique financial landscape, characterized by a growing appetite for digital banking solutions and a supportive environment for startups, presents an ideal setting for Synctera's next growth phase.
What Synctera Brings to the Canadian Market
Synctera's end-to-end platform is set to revolutionize how Canadian Fintechs, banks, and developers approach financial innovation. Offering services such as bank accounts, card issuance, money movement, and lending solutions, Synctera aims to simplify the complexities of financial services, enabling businesses to focus on innovation and growth. Their compliance with FINTRAC regulations as a registered Money Service Business in Canada highlights its commitment to operating within the country's regulatory framework, ensuring trust and security for its partners and customers.
FFCON23 Panel: Beyond Digital Banking and Embedded Finance
Synctera's entry into Canada confirms a growing interest from global players in the Canadian market and is likely to spur further innovation, competition, and collaboration within the sector.
Comparing the US vs. Canadian Fintech Markets in 2023
| Factor | United States | Canada |
|---|---|---|
| Market Size | Larger market with a diverse and extensive customer base. | Smaller market size compared to the U.S., but still significant with a focus on innovation. |
| Financial Ecosystem | Mature financial infrastructure with a well-established FinTech ecosystem. | Growing FinTech ecosystem, with increasing opportunities for innovation. |
| Innovation Hub | Known globally as a center for technological and financial innovation. | Increasingly recognized for innovation, particularly in technology sectors. |
| Regulatory Environment | Complex but familiar regulatory landscape for U.S.-based companies. | Different regulatory environment, with unique challenges and opportunities. FINTRAC registration is a key aspect for financial services. |
| Access to Capital | Robust venture capital and investment scene, providing ample funding opportunities for startups. | Growing investment scene, though smaller in scale compared to the U.S., with increasing interest in tech and FinTech sectors. |
Outlook
This expansion, coupled with the substantial financial backing, positions Synctera to play a pivotal role in shaping the future of financial technology in Canada, signaling a new era of innovation and collaboration in the Canadian financial sector.
For Canadian startups and entrepreneurs, Synctera's platform offers a new avenue to bring their financial products to market faster and more efficiently.
See: VoPay Launches VoPay360 – Embedded Financial Technology
For banks, the partnership opportunities with Synctera could lead to enhanced digital offerings and improved customer experiences.
The National Crowdfunding & Fintech Association of Canada (NCFA Canada) welcomes Synctera's expansion as a positive development for the Canadian Fintech community. As we continue to monitor and support the growth of financial technology in Canada, Synctera's journey will undoubtedly be one to watch.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SG Launches First Digital Green Bond on Ethereum
Blockchain Bonds | Dec 6, 2023
Image courtesy of DALL.E
Societe Generale launches the first digital green bond on a public blockchain, marking a significant step in sustainable finance
Societe Generale, a major French bank, has issued its inaugural digital green bond on the Ethereum public blockchain. This move represents a significant advancement in the integration of blockchain technology in sustainable finance. The bond, valued at EUR 10 million with a three-year maturity, is aimed at financing green activities and demonstrates enhanced transparency and efficiency in financial transactions.
See: Societe Generale: Lists First Security Tokens Utilizing Blockchain on Luxembourg Stock Exchange
- The bond is issued as a Security Token on the Ethereum blockchain, enhancing transparency and traceability, particularly for ESG (Environmental, Social, and Governance) data.
- Proceeds from the bond are dedicated to financing or refinancing eligible green activities, aligning with Societe Generale's commitment to sustainable and positive impact financing.
- The bond's smart contract provides 24/7 open access to data on its carbon footprint transparency, allowing issuers and investors to monitor the environmental impact of their securities.
- Societe Generale is the first big bank to launch a stablecoin introducing an option for on-chain settlement of securities using EUR CoinVertible, a digital asset, complementing traditional cash settlement solutions.
- This issuance is a step towards using blockchain as a data repository and certification tool for ESG data on a global scale, potentially transforming how sustainable investments are tracked and managed.
Why It's Important
This innovative approach could pave the way for more widespread adoption of blockchain in ESG-focused financial products, offering a new level of transparency and accountability in sustainable finance.
Dig deeper. Here are some other articles you may be interested in:
OMFIF / EY Report: Blockchain for Public Finance – Capital Markets and Beyond
This report by OMFIF and EY, published on Sep 27, 2022, discusses how a public finance management system focused on transparency and seamless data sharing can lead to more effective and efficient policy-making. It emphasizes the importance of ensuring funds reach their intended recipients and are used for their intended purpose.
Empowering Investors with Fractional Bond Options
The article explores the emerging concept of fractional bonds, highlighting platforms like BondbloX, which simplify bond investing by allowing electronic tracking and trading of bonds, akin to stocks.
Catastrophe Bonds: Killer Use Case for Digital Asset Adoption?
Published on Nov 5, 2022, by InsurTech Insights, this article discusses Bermuda's role as an innovator in insurance and digital assets, focusing on the use of staked tokens as collateral in the insurance industry.
Harnessing Decentralized Finance to Combat Climate Change: A New Era of Sustainable Finance
This article discusses the role of decentralized finance (DeFi) in addressing climate change. It highlights how DeFi can revolutionize climate change solutions through innovative financial models that promote sustainability and create new investment opportunities for a greener future.
Sustainable finance linked bonds and loans in the capital markets
The article explores the growing interest in sustainable finance, accelerated by the COVID-19 pandemic. It covers various market offerings like green bonds, social bonds, and sustainability-linked bonds and loans, discussing their role in addressing environmental and social challenges.
Creating Sustainable Wealth Through Digital Finance
This piece delves into the convergence of sustainable finance, digital finance, and the democratization of capital markets. It emphasizes the opportunity to use digital finance to foster a greener economy, considering environmental, social, and governance (ESG) factors in investment decisions.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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How Permissioned DeFi Will Transform Global Payments
DeFi Payments | Nov 27, 2023
Image from Fireblocks and BCG Analytics
How Permissioned DeFi is revolutionizing cross-border payments with efficient, cost effective, secure and regulatory compliant transactions
The challenges of both traditional and permissionless DeFi for payments: Traditional cross-border payment systems are often slow, expensive, and lack transparency. Permissionless DeFi, while offering advantages such as near-instant transfers and better traceability, falls short in terms of anti-money laundering (AML) and Know Your Customer (KYC) functions, making it vulnerable to fraud and erroneous payments. These shortcomings have hindered its widespread adoption by financial institutions.
See: JPMorgan’s New Programmable Payments in Blockchain
Best of Both Worlds with Permissioned DeFi
Permissioned DeFi solves these concerns by integrating the best of both worlds: the efficiency of DeFi and the necessary compliance controls. This model involves several key steps and 8 key participants, ensuring a secure, compliant, and efficient process for cross-border transactions. Here's the step-by-step process below:
Step 1. KYC Process and Whitelisting: Institutions undergo a platform-level KYC process conducted by whitelisters, who approve users and add their digital wallets to the allowed list. Institutions can act as whitelisters or appoint third parties for this role.
Step 2. Initiating the Transaction: Once KYC-approved, a sender (individual, business, or institution) can initiate a cross-border fiat money transfer.
Step 3. On-Ramp Instruction to OOSP: The sender’s fiat balance is debited by an On- and Off-Ramp Service Provider (OOSP), and the sender’s digital wallet is credited with a token of equivalent value.
Step 4. Token Types: The model can use various tokens, like bank-issued stablecoins or central bank digital currencies (CBDCs), representing the transaction’s main payment format.
See: Insights Into Canada’s Evolving Payments Landscape
Step 5. Wrapping the Token: The token received in the digital wallet is wrapped by a service provider for interoperability across blockchains. The wrapping process involves locking the initial token in a smart contract and minting an equivalent amount of the wrapped token.
Step 6. Smart Contract and AMM: A smart contract deployed on the permissioned DeFi protocol handles the transfer of the wrapped token. An Automated Market Maker (AMM) provides a liquidity pool to facilitate trades and ensure near-instant settlement.
Step 7. Unwrapping and Off-Ramping: Receivers can unwrap the received token on another blockchain network.If fiat currency is preferred, an off-ramp step converts the token back to fiat, crediting it to the receiver’s bank account.
Cost Advantage
The use of permissioned decentralized finance (DeFi) with cross-border payments is estimated to be 80% cheaper than a traditional global payment transaction.
Let's compare the two payment methods by cost category in the table below which clearly illustrates the cost-effectiveness of permissioned DeFi in cross-border payments, highlighting the potential for significant savings for both payment service providers and end customers.
| Cost Category | Traditional Payments | Permissioned DeFi-Based Payments |
|---|---|---|
| Operational & IT Costs | $6.40 (80% of total) | $0.05 to $0.09 |
| Compliance Costs | $1.20 to $1.60 (15%-20% of total) | Assumed same as traditional: $1.20 to $1.60 |
| Total Cost per Transaction | $8.00 | $1.25 to $1.69 |
- There's a significant reduction in operational and IT costs in the permissioned DeFi model, dropping from $6.40 to a mere $0.05 to $0.09 per transaction.
- These costs are assumed to remain the same in both models, ranging from $1.20 to $1.60 per transaction. This assumption is based on the premise that the regulatory and compliance requirements are similar across both platforms.
- The overall cost per transaction in traditional payments is $8.00, whereas in the permissioned DeFi-based model, it ranges from $1.25 to $1.69. This represents a substantial cost reduction of approximately 80% in the permissioned DeFi model compared to traditional payment methods.
See: Bank-Issued Deposit Tokens Emerge and JP Morgan Sees Them Going DeFi
Conclusion
Permissioned DeFi is poised to redefine the landscape of cross-border payments with an efficient, cost-effective and secure solution that is compliant with regulatory standards. By addressing the limitations of both traditional payment systems and permissionless DeFi, this innovative model opens up new possibilities for global financial transactions, making them more accessible, transparent, and efficient.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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OECD 2023: Key Insights on Open Finance Policies
Open Finance Report | Nov 23, 2023
'Open Finance' is at the forefront of financial innovation, promising to redefine how we interact with financial data.
The recent OECD report on "Open Finance Policy Considerations" offers a comprehensive analysis of this paradigm shift, highlighting its potential benefits, inherent risks, and the critical considerations for successful implementation.
What is Open Finance
Open Finance extends the principles of Open Banking with broader access to and sharing of financial data beyond mere payment information. This expansion paves the way for improved financial products and services, fostering an environment of customer empowerment, innovation, and heightened competition. The consumer, now at the center, gains unprecedented control and choice over their financial data, enabling personalized financial solutions tailored to individual needs.
With Great Data Comes Great Responsibility
The OECD report underscores significant concerns regarding security and privacy in Open Finance. A notable percentage of respondents in a European Commission survey expressed apprehensions about the risks associated with granting service providers access to their data. This highlights a crucial aspect of Open Finance – the need for robust consent mechanisms and transparent data sharing practices.
See: 3 examples of what open finance can do right now
The success of Open Finance hinges on user uptake, which in turn is dependent on the trust consumers place in these new frameworks. Aligning with the G20/OECD High-Level Principles on Financial Consumer Protection, Open Finance must ensure adequate consumer protection and trust-building measures. Moreover, achieving interoperability across sectors and geographies is vital for the seamless exchange and utilization of financial data.
Policy Considerations
- Embracing technology neutrality ensures that the same rules apply across the board, irrespective of the technological means.
- The implementation of comprehensive privacy and data protection safeguards is non-negotiable, as these are the bedrock of consumer trust and the overall efficacy of Open Finance systems.
- Clear role definitions, in line with data protection regulations, are essential to maintain clarity and accountability within the ecosystem.
See: Open data for finance as an emerging source of GDP growth
Conclusion
The report emphasizes the need for careful consideration of various factors in implementing Open Finance, including customer trust, data protection, interoperability, and policy frameworks that support innovation while safeguarding consumer interests.
Download the 48 page PDF report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Feds Promise Open Banking Laws in 2024 and to Broaden Access to Payments Canada
Open Banking | Nov 23, 2023
Image: Unsplash/Viktor Forgacs
In this weeks Fall Economic Statement the federal government announced plans to introduce open banking laws in 2024, and to expand Payments Canada membership eligibility.
See: Bill C-365: Paving the Way for Open Banking in Canada?
Open Banking Legislation Coming 2024
- The Canadian government has announced plans to introduce open banking legislation in Budget 2024.
- Open Banking will enable consumers to securely share their financial data with trusted third-party providers, unlocking a new era of personalized financial services.
- The legislation aims to enhance consumer control over financial data, promote competition, and foster the development of innovative financial solutions, marking a significant shift towards a more consumer-centric financial landscape in Canada.
Payments Canada to Expand Membership
- Another key announcement affecting fintech is the expansion of Payments Canada eligibility. This change will allow companies beyond the traditional big banks to participate in Payments Canada who are leading the development of a new Real-Time Rail payment system, such as payment service providers supervised by the Bank of Canada and local credit unions.
See: Insights Into Canada’s Evolving Payments Landscape
- This expansion is expected to drive down transaction costs and accelerate the transition to faster, more secure payment systems, significantly enhancing the efficiency and inclusivity of Canada's financial infrastructure.
Believe It When You See It?
Checkout the statements for yourself: See Section 2.1: Making Life More Affordable
Together, these initiatives will reshape how Canadians interact with their finances, offering more choices, better services, and a stronger, more resilient financial system for the future.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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