Department of Finance launches open banking consultation

Ottawa has officially launched its consultation on open banking, a framework which would allow consumers and businesses to permit third parties such as fintechs to access their financial data to provide innovative services.

The Department of Finance on Friday published a consultation paper outlining the pros and cons of open banking, and invited the public to submit their comments by Feb. 11.

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The federal government in its budget last February announced it planned to study the concept, which has already been implemented in the U.K. and the European Union.

The department said the focus of the open banking review will be financial transaction data, such as withdrawals and account balances, from federally-regulated banks.

In its consultation paper, the department says applications using an open banking framework could potentially allow users to review their monthly financial transactions over several years to determine spending patterns and savings goals.

It added that open banking offers consumers the potential to use their own information to gain new insights and improve Canadians' ability to manage financial services, but risks to privacy and cybersecurity must also be mitigated.

© The Outlook

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