Ottawa to study merits of ‘open banking’ model
OTTAWA Ottawa is going to study the merits of introducing “open banking,” which allows consumers’ financial data to be shared between banks and other financial services providers, to see if it should be introduced in Canada.
It has already been adopted by jurisdictions including the United Kingdom and Australia, and is touted as a catalyst to the development of financial technology, or fintech.
In Tuesday’s budget, the government said open banking has the potential to increase innovation and competition in the banking sector. But it also gives rise to concerns over privacy and data security, so a final decision has not been made.
“Recognizing … potential benefits, the government proposes to undertake a review of the merits of open banking in order to assess whether open banking would deliver positive results for Canadians with the highest regards for consumer privacy, data security, and financial stability,” the budget document said.
According to the document, open banking through secure data sharing platforms “enables financial service providers to offer more tailored products and services, on a more competitive and innovative basis.”
At the same time, it has the potential to make it easier for consumers to move and manage their money, and to make informed decisions by providing greater transparency on the products and services offered.