Abraham Tachjian is the man Ottawa has hired to develop an open banking system that is expected to roll out in 2023. As the clock ticks, industry players give him an ear on how to get the job done; Canada’s open banking czar is feeling the heat.
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[...]
Opinion: Canada’s Open Banking Governance Challenge
Canada Today | Claire Clarkson | Oct 21, 2022
Abraham Tachjian is the man Ottawa has hired to develop an open banking system that is expected to roll out in 2023. As the clock ticks, industry players give him an ear on how to get the job done; Canada’s open banking czar is feeling the heat.
- Open banking is a system that would allow consumers and small businesses to securely exchange their financial data between financial service providers such as banks and accredited fintechs. Also known as consumer-centric finance, it heralds the promise of giving Canadians more control over their finances while making it easier for them to switch lenders, open accounts and use new digital tools to manage their money.
- Governance a priority: Banks, credit unions and fintechs often have conflicting ideas about how to achieve these goals. But interestingly, there’s one issue they all seem to agree on these days: Tachjian-san needs to re-order his to-do list and bring governance to the top. Governance is about ensuring accountability and public trust in the coming open banking system.
- Mr. Tachjian’s governance challenge is to create an organization that oversees, implements and governs open banking across the country. Importantly, this entity is independent and accountable to the Canadian government and must provide consumers and small businesses with recourse should anything go wrong.
- Establishing a governance framework is usually the first step in creating a new organization or system. But this is Canada, folks. Our country is characterized by doing things in the wrong order and making short work of good governance. (Just look at how flawed governance caused the current crisis at Hockey Canada.)
Watch Video: NCFA Open Banking Governance with Senator Colin Deacon and Mahi Sall
Abraham Tachijian, Canada's Open Banking Lead
While policy work on the future of the system’s ongoing management and governance has been ongoing internally throughout this process, we have reached a point where we will shift our focus. Once we have addressed these key issues, we will liaise again with the working groups and convene additional steering group meetings as needed.
- Governance model in isolation from the four working committees: But it’s still problematic that some secret group of people in some backroom hatched the governance for open banking. This lack of transparency is worrying. Certainly, governance is a complex issue given the “diverging interests” of the various industry participants in an open banking system. But it was a mistake to continue working on the governance model in isolation from the four working groups. The governance model should have been established from the start to inform their work.
Governance should never be reverse engineered. Mr. Tachjian and the Ministry of Finance urgently need to bring this discussion to the fore. Otherwise, Canada risks putting the cart before the horse for open banking.
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