Following delay, federal government to reopen virtual consultations on open banking

Canada’s Department of Finance has reopened its consultations on open banking with industry stakeholders, according to an email shared by Canadian Senator Colin Deacon on Twitter Tuesday.

The consultations, which are part of a broader government review on open banking, were postponed in the Spring due to restrictions on public gatherings put in place to curb the spread of COVID-19. The decision was bemoaned by several members of Canada’s FinTech ecosystem.

In his tweet, Deacon said he was pleased the federal government has prioritized the consultations.

According to Deacon’s tweet, which included an email sent by Finance Canada to stakeholders, the reopened consultations will comprise five virtual sessions through November and December. Price Waterhouse Cooper will be the facilitator of the consultations, according to the email.

“There is a need for federal leadership on the open banking file and the only way to achieve that is through the minister’s office,” Deacon told BetaKit. “The restarting of consultations indicates that this is now a priority which is phenomenal news.”

The federal government’s open banking review, which was first introduced in Budget 2018, is aimed to assess whether open banking would deliver positive results for Canadians. The open banking advisory committee’s mandate is set to be executed in two phases: assessing the merits of open banking, and assessing open banking implementation considerations. The review entered its second phase at the end of January.

This phase is focused on determining how regulators and the financial sector can mitigate data security and privacy risks associated with open banking. The second phase will be conducted with industry stakeholders to address potential solutions and standards to enhance data protection in the financial sector, by reviewing governance, consumer control of personal data, privacy, and security.

The earlier consultations were conducted through the Department of Finance under the leadership of Finance Minister Bill Morneau. They will now be conducted under Chrystia Freeland, who replaced Bill Morneau as Canada’s minister of finance in August in the wake of the WE Charity scandal.

The general premise behind open banking revolves around FinTech developers leveraging open APIs to create increased financial transparency for customers. Canada lags behind much of the world in developing an open banking standard. An EY analysis from 2019 found the country trails peers specifically in terms of regulatory environment and adoption potential.

RELATED: Lagging regulation, consumer trust inhibiting FinTech adoption in Canada

This year, Canada’s FinTech community experienced several setbacks, particularly in mobilizing the government to prioritize innovation. In addition to delaying the open banking consultations, the federal government rejected a number of proposals for FinTech organizations to help distribute COVID-19 relief to businesses.

Unlike Canada, the United States and the United Kingdom, in addition to several other countries, used FinTech firms to help distribute government aid during the pandemic. The rejections led to many members of the FinTech community calling on the government to justify its decision.

In his tweet, Deacon said he was pleased the federal government has prioritized the consultations. CEO of Borrowell Andrew Graham, who publicly criticized the delay earlier this year, told BetaKit he was also pleased the consultations had reopened.

Image source Pixabay.

Isabelle Kirkwood

Isabelle Kirkwood

Writer, globetrotter, drone pilot & David Attenborough enthusiast