All eyes on the federal government as Canadians anticipate an open banking system by 2023

Discussions around an open banking system in Canada that would offer consumers control over their banking data continues to develop behind the scenes despite much of our attention being on the pandemic as of lately.

A report by a federal advisory committee on the prospects for such a banking scheme was released publicly in early August, calling on the federal government to launch a nationwide program by January 2023. However, there was no mention of open banking in the 2021 federal budget.

Read: Federal government releases final report on open banking.

“January 2023 is not that far off, given that there are a lot of puzzle pieces that still need to be put in place,” said senior associate Ronak Shah when asked about his insight on the security and liability risks of an open banking regime in Canada by National Magazine.

“The problem is the government’s ranking of priorities. In November, C-11 was looking like a top priority for the federal government, but it just didn’t get the push it required. It should have gone to committee for debate before the House shut down. So it’s quite clear that the government will have to push hard on this when the Commons comes back.

“It’s a complicated policy space. The marketplace is ready for this. Canadians are ready. They’re just waiting on government to take the next steps,” he added.

Noting that the federal government is several steps behind the fintech sector and is playing catch-up on open banking, Ronak said that this “means that some elements of the system we ultimately get may be in place already.”

APIs—application programming interfaces—are software platforms that allow fintechs to securely access client data held by banks. Some banks have started working on relationships with fintechs that include “custom-made” APIs.

He continued by explaining that banks have been “working on the functionality of data transfers because they know this is something important to their clients.”

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