Finance Canada Announces Second Phase of Open Banking Virtual Consultations Dates

Finance CanadaMinister’s Advisory Committee on Open Banking | Kirsten Fraser | Nov 4, 2020

bank 300x207 - Finance Canada Announces Second Phase of Open Banking Virtual Consultations DatesThe Committee has developed a set of proposals which, taken together, outline a model for a hybrid Canadian approach to enable a system of open banking. They believe that Canada requires an approach to open banking that incorporates elements from other jurisdictions and harnesses the benefits of both industry and government led models, but charts its own path.

Accordingly, outlined in the following documents is a proposal to deliver to Canadian consumers secure, efficient, consumer-permissioned data mobility, with clear expected outcomes for consumers.

See: Bank Shot: Canada may be a laggard, but these B.C. fintechs are ready for open banking

The Committee is now ready to receive concrete input on these proposals with a view to determining whether our approach appropriately reflects what is required for the Canadian market or, as appropriate, adjust our course.

Moving forward, two factors remain front of mind for the Committee. The first: that open banking is part of a broader conversation about the use, control and protection of Canadians’ data and any system must be approached as a guide for the future application of these principles to other sectors. The second: that the time to act is now.

Open banking has an integral role to play in post-pandemic economic recovery and to delay its implementation will result in considerable risks to consumers, the sector and the Canadian economy. With this in mind, the Committee thanks stakeholders for their patience and looks forward to further engagement on this timely and important issue.

See: Global Risk Institute Report: Discussing Open Banking Regulation for Canada

Open banking allows consumers to take advantage of new, data-driven financial services by transferring their data held at banks to third parties. These new services represent an innovative and growing market, and can help Canadians better manage their finances.

The Committee’s vision for an open banking system in Canada is to improve consumer welfare and advance economic development. These include ensuring consumer data is protected, that they are in control of their data, and for consumers to have reliable, consistent access to services. At the same time, an open banking system should advance economic development by increasing overall growth in the financial sector, promoting innovation, and allowing third party financial service providers to enter the field.

See: C.D. Howe Institute Report: Open Banking Holds Promise, Risks for Consumers

The Committee’s proposed hybrid model also makes proposals with regard to the scope of an open banking system, who can participate, what types of data are involved, and what types of functionality or financial products should be scoped in.

Consumer transaction data held at federally regulated banks is the core scope. Small businesses should be given similar rights to consumers to move and share
their data within the open banking ecosystem. Additionally, proprietary data should always remain proprietary, and excluded from any requirement to share data.

 

View the Original Stakeholder Committee Letter--> here

 

View the Executive Summary --> here

 

 


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