Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Join Open Banking Advocates to Demand Canada Unlock Financial Stagnation
Open Banking in Canada | Oct 3, 2023
Coalition of advocates for open banking in Canada Launch 'Choose More' Campaign to Ignite
In a bold stride towards financial liberation and innovation, the "Choose More" campaign has been launched, spearheaded by a coalition of pioneering Canadian FinTech companies. This initiative emerges amidst the palpable delays and challenges that have entwined the open banking initiative in Canada, casting a spotlight on the urgent need for a robust, user-centric financial system.
Open banking, a system that provides a user-friendly and secure way for consumers to share their financial data with third-party developers, has been embraced by numerous countries to foster innovation and competition among financial service providers. However, Canada lags behind in implementing a formal open banking system, despite its potential to revolutionize the financial landscape.
Open Banking in Canada is At Risk
A recent article highlights the ongoing delays and challenges faced by the open banking initiative in Canada. A coalition of prominent Canadian FinTech companies, including Wealthsimple, EQ Bank, and Wise, launched the "Choose More" campaign to expedite the federal government's progress on open banking and payment modernization. This campaign underscores the potential benefits of open banking, such as reducing banking fees, enabling Canadians to utilize their rental history to build credit, and providing more choices and competitive pricing for consumers and small businesses.
See: NCFA Open Banking Current State in Canada with Senator Colin Deacon and Mahi Sall
Despite the apparent standstill, Abraham Tachjian, Canada’s open banking lead, has extended his tenure until the end of 2023, signaling a commitment to advancing this initiative but next steps for implementing a formal open banking system have not been announced. Canada remains the only G7 country without a formal open banking system or real-time payments.
Here's a break-down:
- 2018: Canada initiates exploration into the concept of open banking, marking the inception of discussions and considerations regarding the implementation of a new financial system.
- July 2021: A briefing note detailing the subsequent steps to advance open banking in Canada is delivered to the Minister of Finance, offering insights and recommendations for the journey ahead.
- August 2021: The federal government’s advisory committee releases a report, providing a blueprint for open banking in Canada, despite experiencing several delays.
- Early 2023: The federal government reneges on its election commitment to roll out an initial version of open banking, signaling a deviation from the proposed timeline.
- Mar 2023: The federal budget of 2023 omits updates or mentions of open banking, sparking concerns and dissatisfaction among FinTech executives and stakeholders.
- Summer 2023: Abraham Tachjian, the lead for open banking, has his timeline for delivering final recommendations to the finance ministry postponed until summer 2023, indicating further delays in the process.
- Oct 3, 2023: Abraham Tachjian announces the extension of his term as the leader of Canada’s open banking initiative until the end of 2023, ensuring continuity in leadership amidst the ongoing developments.
- Oct 3, 2023: A coalition of FinTech companies launches the "Choose More" campaign, advocating for the expedited implementation of open banking and payment modernization to address the ongoing delays and to promote a more efficient financial system in Canada.
Unproductive Canada Cannot Afford More Delays
The delay in implementing open banking and payment modernization has several implications for Canadians and the financial industry. Small and medium businesses, which are already grappling with stagnating sales and delayed payments from customers, could benefit significantly from reforms like open banking. Such reforms have been shown to lower fees, expedite money movement, and enhance access to capital in other global markets.
Moreover, the lack of a formal open banking system and real-time payments infrastructure puts Canada at a competitive disadvantage on the global stage, potentially stifling innovation and limiting options for consumers and businesses alike.
Choose More For Your Future! A Call to Action
The "Choose More For Your Future" campaign, accessible at choosemoreforyourfuture.com, advocates for an upgrade in Canada’s financial system, emphasizing that Canadians deserve banking that allows them to retain more of their money. The campaign highlights several issues with the current financial system, such as costly fees, slow payments, lack of choice, and a failure to innovate, pointing out that while Canadians grapple with high inflation and soaring costs, banks continue to reap substantial profits from fees.
Key Points from the Campaign:
- Sky-High Fees: Canadians pay substantial amounts in fees throughout their lifetimes, and Canadian businesses lose between $3-6.5 billion annually due to fees.
- Home Ownership: 63% of Canadians have relinquished their dream of home ownership due to financial constraints.
- Broken Promises: The campaign underscores that Ottawa is lagging in fulfilling its promise to reduce banking fees by providing Canadians with more options. While global counterparts are innovating and modernizing banking, Canadians continue to await a financial system that ensures they control their data.
- The Solution: The campaign advocates for Open Banking, which allows individuals to control their data, and payments modernization, which offers quicker and more cost-effective options for transferring money. However, Canada is trailing behind the global community in these aspects.
- Benefits of Open Banking: The campaign outlines several benefits of open banking, such as utilizing rental history to enhance credit scores, reducing fees for small businesses, economic growth, managing multiple accounts in one place, and providing more choices and lower fees for consumers.
Catalyze Change - Demand More From Your MPs and Government
The campaign calls for collective action, urging Canadians to join and demand more from their MPs and government, emphasizing that while one voice may not make a significant impact, thousands can. You can join the movement and make your voice heard by visiting Choose More For Your Future. Demand a more equitable, innovative, and consumer-friendly financial system that aligns with the digital age.
The journey towards open banking in Canada has been fraught with delays and challenges. However, the collective action of FinTech companies and the public can catalyze change and pave the way for a financial system that is in tune with the needs and demands of modern consumers and businesses. It is imperative for Canadians to advocate for a future where they have more control, options, and benefits from their financial data.
Choose More --> Now
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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