Late last month, Canada’s prolonged road to open banking hit a new milestone: the federal government’s Bill C-69 received royal assent, officially enshrining the implementation of a consumer-driven banking framework into law.
Open banking—which will allow Canadians to control and share their financial data with third-party providers and ultimately benefit from a wider range of financial services—has yet to fully launch in Canada. As the financial services ecosystem eagerly awaits its arrival, many startups, scale-ups, and financial institutions of all sizes across the country have spent the last six years getting ready.
“The next 12-18 months are crucial for Canada.”
Saba Shariff,
Symcor
At the heart of the open banking conversation is data, and how it can be used to foster greater competition and innovation in financial services. For Canada to meet this objective, it’s crucial that companies providing or receiving this data meet regulatory, technical, security, and operational guidelines.
This is where Symcor is focused. As a data intermediary, Symcor facilitates secure and efficient data sharing between banks and third-party providers. Its COR.CONNECT platform, designed for both data providers like banks and data recipients like FinTech companies, enables the secure exchange of user-permissioned data.
As Canada inches closer to this new framework, BetaKit sat down with Saba Shariff, Chief Strategy, Product, and Innovation Officer for Symcor, about the state of open banking in Canada, and the role data intermediaries can play in this environment.
The following Q&A has been edited for brevity and clarity.
We seem to be getting closer to open banking here in Canada. What are some of the latest developments with open banking that are exciting to you?
The fact that Canada finally has its own set of open banking laws excites me, as this was a necessary first step.
What also excites me is that Canada will have a made-in-Canada, hybrid open banking solution. That’s what we want and what will ultimately benefit consumers.
It’s also encouraging to see the industry in motion already. Whether it’s enabling secure data access through bilaterals or trying to put standards forward for consideration by the government as they pick a technical standard. And then you have organizations like Symcor, knowing that open banking is coming, offering out-of-the-box solutions that can help organizations get ready and enable data exchange more securely than today.
What are the risks people face in the absence of open banking?
It’s estimated that anywhere between six to nine million Canadians are essentially sharing their credentials—their usernames, their passwords—with third parties, because the only method to get access to this data at any scale today is through screen-scraping. You can imagine, with fraud on the rise, that the risks associated with that are significant and can’t be ignored.
One study from the Canadian Bankers Association found that 87 percent of Canadians trust their banks to house and store their personal information. In a different study, 74 percent of Canadians said that they have refused to share their personal information with a business or organization because of privacy concerns.
Without a common open banking system ensuring proper consent and controlled data usage, data can potentially be compromised. It can be used for purposes that it shouldn’t be used for, which we know is certainly not what Canadians want.
Proponents of open banking champion its potential to enhance competition and collaboration in financial services. Is this the future you envision for open banking?
When you hear the words “competition” and “collaboration,” you may think that they’re contradictory, but for us, they’re actually two sides of the same coin. So let’s unpack them.
When it comes to competition, first and foremost, Symcor is a proponent and a big believer that competition will lead to powerful use cases, financial innovation, and countless benefits for consumers.
Symcor is a data intermediary that helps organizations get ready for open banking, and we are open to the right authorized entities, based on the government’s accreditation criteria, having access to that data. We really believe that’s important.
You’re not going to scale open banking with only one or two players involved, so data being available in a much more secure and efficient way will ultimately drive greater competition, and that will bring forth innovative use cases.
The other side is collaboration. When we look at other jurisdictions where open banking has been implemented, the “getting ready” step for open banking hasn’t really been a collaborative effort. Instead, it’s been driven down by laws and regulations, forced timelines, very strict standards, and when it’s a compliance initiative, that typically is not the best way to handle it. There’s no competitive advantage to being more compliant than the next organization. That’s why organizations working together to get ready for open banking in a collaborative way will ultimately help us scale this much faster, better, and more cost effectively.
What are the challenges that both banks and FinTech companies face as they prepare for open banking?
For data providers, it’s hard to make sense of all the information that’s out there when you must build your APIs according to standards that may not yet be fully determined. Lots of companies are still trying to figure out questions like: What are the rules? To whom can you provide this data? What are the liability applications? What happens if something goes wrong?
If you’re doing this on your own, you also have to figure this out on your own, which takes significant time and effort. From our experience, it can take anywhere from 18 to 24 months for an organization to get ready. This is where we feel the process can be streamlined and optimized by leveraging data exchange intermediaries like Symcor.
For data recipients, it’s about evolving from what they do today, which is leveraging aggregators and screen scraping to access data, to getting that data in a much more streamlined and secure way.
FinTech companies face a lot of issues today without open banking, and we hear from many who are concerned that they can’t bring innovative products to market because the data is not available in a consistent, safe, and scalable manner.
How is Symcor preparing for open banking?
For over 25 years Symcor has been a trusted technology provider of payment, security and data services. With our COR.CONNECT platform, we are supporting open banking readiness through secure and streamlined access for both data providers and recipients.
So, if you’re a FinTech company or a financial institution, our platform minimizes the operational and technical work effort required to enable and leverage open banking data in a cost-effective and secure manner.
We also built our solution with Privacy by Design as a core principle. This ensures that we’re always operating within the bounds of not only regulations, but what the consumer expects of their providers from a consent and privacy perspective.
At the end of the day, we help organizations avoid the time, the cost, and the risk of going it alone with open banking, so that participants can focus on what they do best, which is servicing their customers and bringing those innovative products to market.
With draft legislations already presented, how long do we have before open banking is fully functional in Canada?
The next 12-18 months are crucial for Canada. We’ll see quite a bit of progress, because some guidelines have been provided by the government, although they themselves indicate that full implementation will ideally take place by the end of 2025.
Organizations like Symcor and other industry participants are working together to support and help accelerate that made-in-Canada, hybrid solution.
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If you are a bank, FinTech company, or simply want to learn more, connect with Symcor on how to embark on your open banking journey. Get in touch: Symcor.ca.
All images courtesy Symcor.