–This article includes additional resources on Open Banking and an explanatory video.
The Department of Finance Canada recently released a consultation paper on the merits of open banking. The release of the paper and the launch of public consultations marks the next step in the Government’s review of open banking, following the appointment of the Advisory Committee on Open Banking in September 2018.
Open banking has the potential to offer a secure way for Canadian consumers—including small businesses—to consent to sharing their financial transaction data with financial service providers, allowing them to benefit from a broader range of financial products and services. This could better serve consumers and grow businesses and markets, contributing to the growth of the Canadian economy.
Through its consultations, the Government seeks to learn more about Canadians’ views on open banking, specifically:
- Would open banking provide meaningful benefits to and improve outcomes for Canadians? In what ways?
- In order for Canadians to feel confident in an open banking system, how should risks related to consumer protection, privacy, cyber security and financial stability be managed?
- If you are of the view that Canada should move forward with implementing an open banking system, what role and steps are appropriate for the federal government to take in the implementation of open banking?
Upon conclusion of this consultation, the Committee will deliver a report assessing the merits of open banking for Canada, with a strong focus on protecting consumer privacy, ensuring the security of financial transactions and maintaining the stability of the financial sector. The Committee will consider implementation opportunities and challenges later in the year.
Interested individuals and organizations are invited to review the consultation paper at the link below and submit their views by February 11, 2019, via email to fin.OBBO.firstname.lastname@example.org or to:
The Advisory Committee to the Open Banking Review/Financial Institutions Division
The Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario, K1A 0G5
- Open banking empowers consumers (including small businesses) to share their financial data with a broader range of financial service providers through secure online channels, in order to access new, innovative, consumer-centric financial services.
- In open banking,
- Consumers can opt in to securely share their financial transaction data with financial technology companies (fintechs) and other financial service providers, with the ability to opt out at any time.
- Fintechs and other financial service providers can use that data to develop innovative products and services that are more tailored to consumer needs and preferences, leading to a more globally competitive sector.
- For consumers and small businesses, open banking offers the potential to use their own information to better understand and manage their finances. This could include applications that compare financial products, the ability to change accounts more easily, and financial services customized to individual needs.
- The Advisory Committee on Open Banking was established by the Minister of Finance on September 26, 2018.
- In Budget 2018, the Government announced a review of the merits of open banking in order to assess whether open banking would deliver positive results for Canadians.
- Consultation Document: A Review into the Merits of Open Banking
- Open Banking Report – Consumer Summary
SPN NOTE: From Wikimedia extracted Jan 12, 2018: “Support for the concept is not unanimous. Mick McAteer, of the UK Financial Inclusion Centre, thinks that only the tech-savvy will benefit. He says that open banking is “a daft idea,” which will lead to more financial exclusion for those on low incomes. He says it is naïve of regulators to expect consumers to own their data and be able to get better deals from banks, and points out the danger of consumers being exploited, either by businesses offering new types of expensive payday loan, or misuse of data and personal information that people have revealed in places such as social media.”
More information on Open Banking is available here:
- What is Open Banking and Why Does it Matter? – The Financial Brand
- Open Banking – Investopedia
- From Open Banking (UK) is the following video: