Open Banking Concept

Creating an Open Banking Framework for Canada
Introduction
What is Open Banking?
Open Banking is a global movement that promotes customers’ right to share their financial
information with third parties.
While many global jurisdictions have legislated Open Banking policies, Open Banking is
broader than just policy - rather, it is part of a broader movement of customer, technological,
and regulatory shifts that facilitate customers regaining control of their own data and for that
data to be easily portable between institutions.
Driving Forces of the Open Banking Movement
The rise of the fourth industrial revolution has been marked
by the emergence of companies that monetize customer
data to deliver value. Businesses, governments, and
customers are embracing the idea that customer data has
inherent value, and that customers should have ultimate
control over usage of their data. As a result, the concept of
customer ownership and control of their data, as well as
data portability, has become a key pillar of modern privacy
principles.
In the financial services industry (which generates and
processes a vast amount of personal data) various data
sharing practices – from Extract Transform Load to APIs -
have emerged over the past two decades to meet growing
customer demand for better interoperability and visibility.
Over the past few years, regional efforts to create a
harmonized approach to enable data sharing while
addressing security, privacy and interoperability challenges
have resulted in both regulatory actions and industry-driven
collaborations in various jurisdictions around the world –
efforts that Canada can learn from.
This paper aims to discuss the key choices
that define an Open Banking framework and
their downstream implications, independent
of whether the framework is driven by a
policy or by the market participants.
Emergence of the Data Economy
Over the last few decades, advancements in technology
have made data significantly more accessible, while
driving down the cost of their acquisition and processing.
Concurrently, organizations have realized the importance
of using data to both improve operations and strengthen
relationships with customers. This has bolstered the value
that market participants assign to data, ultimately spurring
innovation that enables businesses and customers to
benefit from its inherent value.
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