Open Banking in Canada: The Time is Now
There have been many conversations recently about Open Banking. For those who aren’t aware, Open Banking provides a secure way for consumers to control and share their financial data with third-party providers and ultimately benefit from a greater range of innovative financial services. According to the Berlin-based Open Banking Project, almost 100 countries have either adopted or are considering adopting some form of Open Banking this year. While this is undoubtedly the way of the future, here at home, Canadians are still waiting. A diverse chorus of voices have been advocating for action and notably, implementation of a hybrid, made-in-Canada solution, as per the latest report from the Government of Canada’s Advisory Committee on Open Banking.
“Hybrid” is key to the success of Open Banking in Canada. “As we have seen in other markets, an ‘either-or’ approach comes with downsides,” says Saba Shariff, Senior Vice President, Chief Strategy, Innovation & Product Officer at Symcor. “For example, early implementations in Europe and Australia demonstrated that overly stringent rules can slow innovation and adoption. Similarly, the U.S. experience revealed that market-appropriate standards are needed to avoid fragmented and costly implementations and user experiences,” she continued.
For Open Banking to succeed in Canada, three things need to happen:
First, learn from other markets while creating a system that works for Canada. While it is true that we are behind our peers, being a later adopter has provided the benefit of learning from other jurisdictions. In Switzerland, for example, coordination by market participants (financial institutions and fintechs) accelerated local Open Banking adoption, and implementation was aligned with necessary business and technical principles. Here in Canada, stakeholders have made strides on this first step by joining FDX to create the FDX Canada Working Group, which establishes technical standards based on holistic input from industry participants. With important foundational work in place, Canada is well positioned to accelerate progress on Open Banking.
Second, focus on delivering a competitive, secure and trusted Open Banking ecosystem that empowers Canadians. Done right, Open Banking will enable Canadians to take advantage of innovative financial services while keeping their data and privacy safe and secure. It will also give them the power of choice and convenience to compare and select products and solutions based on their unique and evolving needs. In turn, this will lead to innovative competitive offerings, lower costs and fees and improved customer experiences. This rests on the ability to create and communicate a safe and secure model that Canadians will trust.
Senior Vice President, Chief Strategy, Innovation & Product Officer, Symcor
Third, we need to move with pace. Canada has the advantage of having learned from numerous international examples in addition to years of consultation to support the implementation of an ideal Open Banking system, specific to Canada’s unique needs. We can harness the innovation of the Canadian financial sector while leveraging a government-led, rules-based approach to ensure equal market participation. There is growing consensus on common technical requirements, market participants have been heard, and privacy standards are understood. It is an opportune time to take action.
“The goal of Open Banking is to meet consumer needs by creating an inclusive and sustainable ecosystem without barriers to entry, where innovation can thrive,” says Shariff. “At Symcor, we are excited about supporting organizations and ultimately consumers to reap the rewards of Open Banking, from increased competition to more personalized, secure, convenient and inclusive financial services. Open Banking has the potential to bolster the Canadian economy at a time when there is a vital need.”
Symcor, a trusted Canadian business process solutions provider, is helping its clients accelerate Open Banking readiness by providing a secure and scalable technical platform that delivers streamlined access to a trusted network of data recipients and data providers. With over 25 years of industry-wide expertise in enabling secure data exchanges, Symcor supports Canada’s Open Banking framework by operating with a balance of agility and security, factors which are critical to an inclusive Open Banking system that works for all Canadians.
Advertising feature produced by Randall Anthony Communications. The Globe’s editorial department was not involved.