Open Banking Concept

Creating an Open Banking Framework for Canada
An Open Banking
Framework for Canada
Framework Overview
The following provides considerations on the design choices of a Canadian
Open Banking framework, considering the choices and outcomes observed
in other jurisdictions, and consideration for Canada’s unique context.
Which accounts should be included?
What functions are covered (e.g., deposits,
lending, wealth)?
Including different functions would enable a different scope
of use-cases for third party providers:
clearly defined in order to prevent confusion around which
institutions are in scope and which are not.
Are online accounts in scope? Are offline
accounts in scope?
Deposits and lending accounts: allow for most cash-flow
management use cases
Plus Wealth: allow for personal financial management
use cases
Plus Insurance: allow for total financial management use
cases
While increasing the breadth of accounts in scope enables
a broader suite of use cases, it places additional burden
on data generators to make data available to third parties;
specifically, certain forms of data (e.g., wealth, insurance) are
not fully digitized and would require expensive and timeconsuming
systems restructuring.
Other jurisdictions that have clearly defined an Open
Banking framework (i.e., the EU, UK, and Australia) have
all taken unique approaches. The UK and Australia have
taken an account-based approach, defining specific types
of accounts that are included. The EU defined the scope
on an activity basis (i.e., “all online payment accounts”),
which includes any type of payment account. Like the
UK and Australia, the EU’s definition includes chequing
accounts, credit cards, etc., but also may include other
comparable accounts such as online wallets (e.g., PayPal).
An activity-based approach has the benefit of more fairly
requiring participation from institutions but needs to be
When deciding between online and offline accounts, there
are two key considerations:
1. Scope of work: Having institutions make data
available that is not currently stored digitally available
would result in significant additional complexity (in
digitizing existing datasets and building brand new
digital processes to make new data available digitally);
this would increase the cost of implementation for
institutions and likely result in a longer timeline to
launch.
2. Scope of customers: As of 2016, ~90% of Canadians
have regular access to the Internet, and ~80% of
these users use some form of online banking (and
this number is projected to increase over time).
Furthermore, many of the use cases of Open Banking
would be delivered through digital means (e.g.,
websites, apps)
Developing a deeper understanding of how many
Canadians would be involuntarily excluded from Open
Banking if non-digital data is excluded from scope is crucial
to understanding if the additional complexity and cost to
financial institutions is justified.
6.