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MOF: Consumer-directed finance: the future of financial services

Department of Finance Canada | Release | Jan 31, 2020

API consumer directed finance - MOF:  Consumer-directed finance: the future of financial servicesIntroduction

Budget 2018 announced the Government's review into the merits of open banking and, as a first step in this process, the Minister of Finance appointed an Advisory Committee on Open Banking, to guide the review. The Advisory Committee is supported by a Secretariat within the Department of Finance.

The Advisory Committee was tasked with considering whether open banking would provide meaningful benefits to Canadians and to deliver a report assessing the potential merits of open banking for Canada, with the highest regard for consumer privacy, security and financial stability.

This report represents the findings and recommendations of the Committee following engagement with Canadians and stakeholders on open banking – a term this report will replace with consumer-directed finance. Over a hundred written submissions were received in response to the consultation paper, "A Review into the Merits of Open Banking," which was released in January 2019. Through the course of the review, the Committee and the Department of Finance have engaged, both through public roundtables and bilaterally, with hundreds of stakeholders.

See:  Open Banking In Canada: Navigating The Future Of Money


The Committee recommends that the Government move forward to enable consumer-directed finance. It is an opportunity to position Canada's financial sector to compete effectively in the data and digitally powered world, and to do so in a way that puts consumers first.

There is no going back. A significant amount of data sharing is already undertaken in the market through inefficient technological workarounds that present liability and security risks for all.

Unlocking consumer-directed finance will not be straightforward. There are a number of complex policy questions to be answered; collaboration with provinces and territories that is required, and a need for multi-sector engagement and leadership from all partners. Government should acknowledge that this is a journey and take the first steps.

There remains only the question of how to move forward. In that effort, we recommend the following principles guide the Government's approach to consumer-directed finance:

  1. Consumer-directed finance should be focused on enabling consumer choice and meaningful control. Consumers, including small businesses, should be able to securely direct and control the use of their data in ways that benefit them.
  2. Consumer-directed finance should give consumers confidence and engender trust. It should be secure; respect and enhance privacy; and, be an improvement over the status quo. If something goes wrong, there must be a clear and straightforward accountability mechanism for consumers and a means to ensure that liability rests with the appropriate party.
  3. Innovation should guide the development of consumer-directed finance, founded on a safe, secure and standardized data-sharing mechanism. While privacy and cyber security concerns are real and must be addressed, equal weight must be given to ensuring the growth of a vibrant financial ecosystem and technological innovation.


In considering a process to enable to consumer-directed finance, we recommend the following:

  1. There is a role for government to play in catalyzing the move towards consumer-directed finance and a role for industry to deliver leading-edge technical solutions given its expertise and innovation capacity. Regardless of the approach taken by government it should set a clear timeline for moving forward, prioritize consumer interests and the development of an ecosystem that is accessible to a broad range of stakeholders.
  2. Consumer-directed finance should serve as a blueprint for the Government to enable enhanced data choice and control for Canadians across all sectors of the economy. To that end, it should be done in consultation with regulators across sectors and in alignment with other related initiatives including payments modernization, updates to privacy frameworks, consideration of digital identity and the Department of Innovation, Science and Economic Development's digital and data initiatives.
  3. Canada has the opportunity to take advantage of the experience of other jurisdictions that have enabled consumer-directed finance. While recognizing the unique Canadian context, Canada should draw considerably on the experience of these existing models – to both benefit from successful elements and avoid pitfalls. Canada's approach must also provide for interoperability with international systems.
  4. Striking a balance between the imperative to act identified by many stakeholders and the need to mitigate risks is critical. The Government should consider developing a policy framework, in collaboration with stakeholders, which delivers on the above principles.

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