Canada's Tech Leaders Urge for Clear Open Banking Roadmap

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Several technology leaders have written a letter to Canada’s finance minister, demanding a transparent roadmap for the implementation of a long-awaited open banking framework.

Enhancing Third-Party Financial Services

The plea comes after a three-year investigation into whether Canada should follow the UK’s example by making it easier for individuals to grant third-party financial service providers access to their banking data. Although the government has been progressing towards the creation of an open banking framework, the promised regulation has not been enacted as of the beginning of 2023, leading to increased frustration within the fintech sector.

Aligning with Global Standards

The letter, coordinated by the Council of Canadian Innovators (CCI) and signed by fintech leaders from companies like Borrowell, Koho, and Neo Financial, emphasizes the need for Canada to align with the European Union, the United States, and the UK’s open banking standards. The signatories warn about the increasing risks to Canadians the longer it takes to implement a secure, 21st century financial system.

Canadians for Open Banking Campaign

In response to the delay, the signatories have initiated a campaign, Canadians for Open Banking, aiming to expedite their cause. This follows a similar campaign, Choose More, launched by Fintechs Canada and companies such as Wealthsimple, EQ Bank, and Wise in early October to gather public support for government action on open banking and payments modernisation.

Public Awareness and Comfort with Data Sharing

A Deloitte survey conducted in June found that only 18% of respondents were familiar with the concept of open banking. This percentage increased among 18- to 34-year-olds, where 35% were familiar with the concept. The survey also revealed that only 35% of Canadians feel comfortable sharing their data online, a statistic expected to rise to 45% once the open banking framework is implemented.

A Call for Assurance

In their letter to Finance Minister Chrystia Freeland, the tech leaders asked for a reaffirmation of the promise to enact open banking. They requested a concrete roadmap for its implementation, citing business investments and strategies built around this election promise. They expressed the need for assurance that the promise will be fulfilled.