Canada’s government has paved the way for an open banking regime in the country by the beginning of 2023.
This week, the deputy prime minister Chrystia Freeland welcomed the final report from the advisory committee on Open Banking, the cumulation of a three year investigation into whether the country should follow the UK in making it easier for people to let third party financial services providers access their banking data.
More than four million Canadians are currently accessing open banking-style services – such as personal budget planners, robo-advisors, and non-traditional lending – via screen scraping.
But, the committee and government argue that this is an “unsecure, inefficient, unregulated, and an unreliable method of data sharing”.
The final report says that the scope of open banking must be broad enough to provide Canadians with access to a wide range of useful, competitive, and consumer-friendly financial services.
The initial phase should be ready by January 2023, with the government and industry collaborating on the roadmap, says the report. The system must have common rules, an accreditation framework and technical specifications.
The government should appoint an open banking lead to bring the industry together to move ahead with the plans, says the report.
Says Freeland: “Consumer-driven finance, or open banking, is already part of Canadians’ lives. Many use digital services every day to manage their money, to budget for expenses, and to make investments.
“Working towards a regulated, made-in-Canada system will make sure that we continue to enjoy a strong, stable, and innovative financial sector that is globally competitive, promotes consumer choice, prioritizes data privacy, and contributes to economic growth.”