Why Canada Needs Open Banking
What is Open Banking?
Open banking is a global movement to empower consumers with control over their financial data. This control gives consumers freedom to share their personal data with third-party companies that can then use that data to provide alternative financial services that make it easier for consumers to move, manage and control their money. This will in turn provide them with greater choice, control and personalized financial services. The concept of open banking is also referenced as Consumer Directed Finance (CDF) in Canada, a suggestion made by the Department of Finance after the first public consultation in January 2019.
On August 4th, 2021, Canada’s Department of Finance Advisory Committee on Open Banking issued its final recommendations report on establishing the path forward for Open Banking in Canada. This report is an important step forward for Canada, providing the much needed roadmap and certainty to push Open Banking forward and enabling a future that will see Canadians and small business owners own their financial data, as well as allow Fintechs and Financial incumbents to build innovative and personalized products and services.