(Toronto) Increasingly frustrated members of Canada’s fintech sector are calling on the federal government to move forward with promised plans to give consumers more control over their financial data.
Dozens of industry leaders sent a letter to Finance Minister Chrystia Freeland on Thursday saying Canada is falling behind as a growing number of countries move toward open banking systems designed to increase competition.
“Open banking in Canada is long overdue,” noted Nicholas Schiavo, director of federal affairs at the Canadian Council of Innovators, and one of the letter’s signatories.
This kind of system, which already exists in the United Kingdom and the European Union and which is advancing in the United States, promises to give Canadians the ability to choose who has access to their financial data. It would also allow consumers to move their information seamlessly from one account to another, similar to how one might move dental records when changing dentists.
Proponents of such systems say that by opening up access to data, consumers can securely link everything from budgeting apps to credit scores to their banking information.
Millions of Canadians already use services that rely on sharing such data, but these rely on “screenshotting”, which requires them to share their login information, an insecure and unsecured process. unregulated.
The open banking option promises to increase competition in Canada’s concentrated banking sector and reduce fees, Schiavo argued.
“Every day that we delay the implementation of a modern and secure financial system, we are effectively imposing a tax on Canadian businesses and Canadians themselves, who are paying more for an outdated system. »
Lori Weir, chief executive of Four Eyes Financial and also a signatory to the open letter, said she hoped to see progress in the system this year.
“I certainly support anything we can do to move things forward more quickly. »
She added that, just like with health data, the ability to consolidate financial data in one place would help create better financial choices.
“It’s when you bring that data together and you’re able to analyze it and produce feedback, that people are a little bit better able to make decisions. »
The open letter follows the launch in October of a campaign by a group of major fintech companies aimed at urging Canadians to pressure the government to move forward with its commitments. The Liberal government notably said, in a 2021 election promise, that it would implement an open banking system no later than the beginning of 2023.
The federal government appointed Abraham Tachjian to head the open banking project in March 2022. He has since led numerous working groups, but it remains unclear when a system might launch.
Meanwhile, the United States announced in October that it was moving forward with plans to accelerate the transition to open banking.
The U.S. Consumer Financial Protection Bureau said the proposed rules would prevent banks from “hoarding” a person’s data, increase competition and improve financial services.
“We are proposing a rule to give consumers the power to move away from poor service and choose financial institutions that offer the best products and prices,” Bureau Director Rohit Choprs had explained in a press release.
The United Kingdom has operated open banking since 2018, the same year Canada established an advisory committee on the possibility.
