Canada is in consultation stage - open banking

Banking Frontiers|February 2020

Canada is in consultation stage - open banking
Canada, though has a well-developed digital banking system is yet to formalize an open banking eco system:
Canadian banks are just getting responsive to open banking albeit initial mistrust over data privacy issues. Some of the leading banks in the country have taken up initiatives to study the opportunities the new system offers and have developed APIs that allow fintechs to access the systems and deliver new products. The department of finance of the country had set up an Advisory Committee on Open Banking to explore the potential and pitfalls of open banking for consumers. The committee had come out with a consultation document in early 2019, which identified the potential benefits and risks of open banking. It is now expected to undertake a wider stakeholder consultation, which is expected to lead to legislative action soon.

However, Canadian banks have not taken to open banking in a way that banks of other countries like Australia or Britain have adopted the system and made significant strides in developing standards and procedures ensuring security of the data and bringing in conveniences for the customers. Canada is placed at the 8th position in the EY Open Banking Opportunity Index, which measured the readiness of 10 different markets around the world to operate successfully in an open banking environment. The Index shows that most individual markets need to strike a better balance between implementing regulatory structures, building consumer trust and encouraging innovation.

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February 2020