Open banking in Canada: Are we moving fast enough? 

Avato November 23, 2022

At the 2022 Open Banking Expo Canada in Toronto, there was palpable excitement about the possibilities for open banking in Canada – along with definite frustration about how slowly things are unfolding here. This was among the biggest takeaways from the event, which saw a sold-out crowd gather to discuss the future of open banking in Canada.

Discussions throughout the day highlighted the many questions that remain as we move towards the target implementation date for open banking in Canada early next year. Here are some of the most frequent questions we heard.

Read and write?

In his opening remarks, Canada’s open banking lead, Abraham Tachjian, provided an overview of the progress to date and the work that lies ahead. Industry representatives expressed dismay when he described the government’s plan to launch open banking in Canada with read-only access in the first implementation.  

With numerous global implementations already underway, Canada has the benefit of following others and learning from their experience. The most compelling open banking use cases involve payments, which need write access. If Canada starts with read-only, will we fall further behind? 

How can open banking help consumers?

Speaking of use cases, there appeared to be a gap when it came to understanding the value of open banking applications. Canada’s banking system is unique, and use cases that have found success in other countries may not be accepted here – at least not right away.

When asked about the benefits of open banking, one panelist commented that open banking should be viewed as a tool. It CAN be used to save money and take greater control of your financial situation, but it’s not automatic. Consumers must embrace the technology to see the benefits.

Making open banking work in Canada is going to take a sizeable dose of innovation along with an open-minded approach to see the possibilities and envision a future where we do things differently for the benefit of everyone.

What do we do with old tech?

From a practical perspective, one of the biggest emerging challenges for open banking – and for financial institutions in general – is legacy applications. Faced with an aging technology stack, many IT teams are considering the staggering possibility that everything will need to be upgraded or replaced to allow for seamless data sharing. Many of these legacy applications are technically solid, though, and need not be tossed aside just yet. Finding ways to maximize and extend the value of legacy systems is critical to the economic viability of open banking. 

Although open banking has enormous business potential for banks and fintechs, it’s also important to keep the consumer in mind as we look towards implementation. Which uses cases will benefit the customer most? What will it take to make them work? What can we learn from early adopters of open banking about finding a balance between compliance, data protection, and innovation? 

There are no easy answers, but it was obvious at the 2022 Open Banking Expo that Canada has the best and brightest minds working out the way forward. It was encouraging to see banks, fintechs, and government representatives come together to move open banking forward in Canada. The question is, can we take notes from other jurisdictions to accelerate our implementation? 

Avato

Software Integration Costs: 5 Ways to Save

August 8, 2022
READ MORE
Darren Stevens

Open Banking Needs These 3 Things to Become Reality

June 14, 2022
READ MORE
Avato

The Great Integration Myth: Why This Common Solution Doesn’t Work

June 1, 2022
READ MORE
Avato

Building a Foundation for Innovation in Core Banking

May 2, 2019
READ MORE
Darren Stevens

Musings from Interface Summit 2019 in Vancouver

October 4, 2019
READ MORE