The Canadian government is moving forward with legislation to establish the foundational elements of an Open Banking Framework. This legislation expands the mandate of the Financial Consumer Agency of Canada (FCAC) to oversee and enforce consumer-driven banking. The FCAC will define framework elements related to scope, system participation, integrity, national security, privacy, liability, and security. The first piece of legislation focuses on governance, scope, and technical standards, with additional elements to be legislated in fall 2024.

Within the framework, participants will share data upon consumer request, covering chequing, savings, investment, and lending products. Canada’s Open Banking Framework aims to include a single technical standard for data sharing, surpassing the scope proposed by the US Consumer Financial Protection Bureau (CFPB).

According to Pradnya Gugale, Senior Analyst at Quadrant Knowledge Solutions, ‘With the positive approach towards open banking, Canadian users will gain access to a broader range of financial services beyond traditional banking and will gain a unified view of all the financial data in a centralized place, thereby simplifying financial management, efficiently tracking balances and expenses, and conducting transactions seamlessly. This approach will also allow users to receive personalized recommendations and will enable Canadian banks to learn more about user behaviour and insights related to the best savings accounts, investment opportunities, loans, and more.’

Author: Pradnya Gugale, Senior Analyst at Quadrant Knowledge Solutions