Financial Data Exchange (FDX), a United States-based non-profit organization dedicated to developing an industry standard for financial data sharing, has officially launched in Canada.
According to FDX, 31 organizations leading the country’s financial services ecosystem have joined on to take part in the organization’s mission.
“The launch of FDX Canada proves the success of this industry-led initiative to bring leading organizations…around a common financial data sharing standard.”
The companies joining as “initial members” of the FDX Canada Working Group include Bank of Montreal, Capital One, CIBC, Desjardins, FinTech Growth Syndicate, Flinks, Interac Corp., Koho, Plaid, and Visa, as well as a number of major banks, among others.
“The launch of FDX Canada proves the success of this industry-led initiative to bring leading organizations in the Canadian financial services ecosystem together around a common financial data sharing standard that will protect consumers and business and simplify their banking experiences,” said Don Cardinal, managing director of FDX.
FDX is working to develop a “secure and interoperable” international API standard for consumer data sharing. By joining, the above organizations have agreed to align around the FDX API. FDX released the fourth version of its API in March.
The FDX noted that the Canada Working Group is open to Canadian financial industry participants involved in secure, consumer-directed finance. The group will work within FDX to help ensure that “uniquely Canadian market requirements are accurately reflected in the development and maintenance of the FDX API standard.”
“We’re inviting all participants in Canada’s financial services ecosystem to join us and are thankful for those members that have helped us launch here,” said Cardinal.
According to FDX, its API can help strengthen consumer control and permissioning of data and allows for users within “the consumer-directed financial data ecosystem” to be securely authenticated without the sharing or storing of their login credentials with third parties. It claimed that through broad adoption of the API, the flow of user-permissioned data between financial institutions, financial data aggregators, FinTechs, payment networks, consumer groups, and financial industry groups can become more secure and reliable.
The Government of Canada is currently undertaking its own consultation on open banking. The review entered its second phase at the end of January, which is focused on determining how regulators and the financial sector can mitigate data security and privacy risks associated with open banking.
However, in April it was revealed that the Department of Finance had delayed its consultation on open banking until the “Fall at the earliest.”
The general premise behind open banking revolves around FinTech developers leveraging open APIs to create better financial transparency for customers. The broader objective of open banking is to promote a more competitive and innovative financial ecosystem, with proponents claiming it allows FinTech companies to augment their offerings and customer engagement, and create new channels for digital revenue.
Launched in 2018, FDX has initially focused on the US and Canada, but noted that many FDX members are global organizations and it is “now engaging with other standards bodies to collaborate on innovation, interoperability, and implementation of best practices.”