The time for unhappy compromise is over. What if the federal government showed some courage and decisively picked a side?
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: Time for the Government to Decide – ‘Who Decides What for Whom’?
The Mox | Alex Vronces | Oct 25, 2022
The time for unhappy compromise is over. What if the federal government showed some courage and decisively picked a side?
- As Canada tiptoes to open banking, the question that belies the saying—who decides what for whom?—is looming over the federal government. Canada’s open banking lead, Abraham Tachjian, is mostly working with banks and fintech companies to develop a rulebook that would dictate how Canadians can port their financial information from their banks to other organizations of their choosing.
- Industry stakeholders are fighting over the pen to write Canada’s rulebook. But who takes over the rulebook, and decides what for whom, when the rulebook is finally written?
See: NCFA Open Banking Governance with Senator Colin Deacon and Mahi Sall
- When the federal government started consulting on open banking a few years ago, it stood up an advisory committee that produced a final report last year. The final report has dozens of recommendations, a few of which are about governance. Ultimately, the advisory committee sees a role for a “fit-for-purpose” entity, established by the federal government, that would “manage the on-going administration of the [open banking] system” once Tachjian’s work is done.
Big banks want the government to do less.
- That government is best which governs least. And how can you blame them for believing it?
- As they should, Canada’s big banks like to remind us how great they are. The Canadian Bankers Association wrote to the government that “Canada has a long history as a global leader in developing industry solutions to help meet broad public policy objectives, through highly consultative and collaborative relationships between financial institutions and regulators.”
Many of Canada’s fintech companies think the government needs to be more involved.
- That government is best which governs best.
- The status quo—the government which has governed least—has neither supported fintech companies nor the Canadians who want their services. Sometimes, big banks prevent fintech companies from accessing the financial information of their customers, even though their customers want the fintech companies to have it. This keeps Canadians away from the financial services they chose. It also doesn’t give Canadians a secure and efficient way to share financial information. The only way is for Canadians to give fintech companies permission to do what’s called screen scraping.
So what do Canada’s facts and circumstances call for?
I can’t help but recall a letter from David Skok, the Logic’s CEO and editor-in-chief:
“There are major institutional players—including Canada’s big banks, insurance and credit-card companies—seeking to maintain their market share, and there are startups and credit unions—some even propped up by the big players—looking to steal market share. At some point, the country needs to define what kind of innovation it wants to support: will it be incumbents trying to transform their businesses, or will it be the little guys seeking to disrupt them? Trying to please everyone pleases no one.”
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