Creating an open banking framework for Canada
Considerations and implications of key design choices
To reap the benefits of open banking without exposing consumers—and the financial system as a whole—to undue risk, stakeholders must carefully consider how to design an open banking framework for Canada. This paper explores how.
Around the world, there is growing recognition of the right consumers have to control their personal data. This has spurred government and market-driven open banking movements in many jurisdictions; Canada is currently undergoing the public consultation process led by the Department of Finance. Open banking has the promise to enable more competitive and innovative financial solutions for consumers; however, to realize its full potential, the framework must balance the value to the consumer with mitigation of risks.
To meet this objective, we must clarify the scope of the model; the extent to which governance and technical standards will be centralized; and how to properly allocate cost and liability across the ecosystem.
As this paper explains, we are currently at a critical inflection point—one that requires us to find the balance between upholding customers’ rights to control their own data while preserving the stability of our financial system. To help key stakeholders make informed choices, we review both the Canadian context and the decisions made in other jurisdictions, and consider how we can collaboratively lay the foundation for a more competitive financial services industry while simultaneously establishing a blueprint for a truly digital, data-driven economy.