In a letter sent last week to Finance Minister Chrystia Freeland, Fintechs Canada outlined the sector’s views on how the government should make progress on open banking. The sector is hopeful the government will provide an update on what the government will do next in the fall economic statement on November 21.
“The time is now for the federal government to decide what steps it will take to give Canadians more access to affordable financial services, while protecting their privacy and financial security,” the letter reads. “With the consultations and the report of Canada’s open banking lead, Abraham Tachjian, now complete, the federal government is well prepared to commit to a specific and detailed course of action.”
The federal government committed to establishing a system to put Canadians in control of their financial information, letting them securely and efficiently share it to access financial services. Canada’s open banking lead was supposed to convene industry to do this by the beginning of 2023, but his contract was recently extended to the end of the year.
Last month, the U.S. Consumer Financial Protection Bureau, a consumer protection agency, took an important step to put Americans in control of their financial information. It published a rule that would compel financial institutions to let their customers share certain financial information with other organizations.
This move has been understood by some as a move away from market-driven open banking, where market players get to determine who gets access to which data, and under which conditions, regardless of what consumers may want. Before the CFPB rule, open banking in the United States was being managed by a bank-owned consortium called Akoya.
According to Fintechs Canada, this is an opportunity for Canada to catch up the rest of the world and make the financial sector work harder for Canadians.
“We recognize progress will be incremental, which is why we believe the first step should be releasing a policy statement, based on Tachjian’s report,” reads Fintechs Canada’s letter. “To make sure this signal to industry is credible, the federal government should also announce that it will begin the next phase of work, which will include establishing an open banking framework and an independent oversight body.”
Fintechs Canada believes the federal government has a role to play in policymaking and overseeing policy administration.
In particular, the industry association has argued that the government needs to establish a policy framework that sets the rules of data-sharing in the financial sector. What’s more, the association also believes the federal government needs to establish an independent oversight body to make sure all participants, whether federally regulated or not, are complying with the rules.
Fintechs Canada has spent time with policymakers, elected officials, and the industry to advise on the different ways these things can be accomplished.
To see the letter, click here.