Banks warn on client data control

3RD-PARTY ACCESS

DOUG ALEXANDER TORONTO • Canada’s banking industry has issued a warning to government about giving Canadians more control of their own banking data: proceed with caution.

The federal Finance department is weighing the merits of making it easier for consumers to share their banking data, as part of a regular review of legislation governing banks.

The so-called open banking model — which is being implemented in the United Kingdom and Europe — could open up the door to fintech firms and tech giants such as Alphabet Inc.’s Google and Facebook Inc. to offer financial services.

In its submission for the review, the Canadian Bankers Association warned the government needs to assess carefully the security and financial stability risks associated with granting thirdparty access to the data.

“Banks in Canada have always been regarded as trusted custodians of their customers’ highly sensitive personal and confidential information,” the group said Monday in its submission to the Finance department.

“Any initiative that could undermine this trust would be very problematic for Canadian consumers, financial market participants and the broader economy.”

In a consultation paper published in August, the federal Finance department said open banking has the potential to increase competition and encourage innovation.

The Canadian Bankers Association, which represents more than 60 lenders in the country, also provided