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Fintech firms in Canada have launched a new campaign to raise awareness of the concept of open banking and to urge the government to move forward.
The campaign follows a survey by the Financial Consumer Agency of Canada, which found in June that awareness and interest in open banking is very low. At the time, only 9 percent of Canadians had heard of open banking and 52 percent of the people said they would not participate in an open banking system.
The purpose of the new campaign called Choose More is education and mobilization, Alex Vronces, executive director at Fintechs Canada, told Vixio.
They want to raise awareness "of how the financial sector is letting Canadians down and of what solutions our government has consulted on and put forward to change that", he added.
The campaign's website lists a number of “myths” they seek to debunk. For instance, they stress that open banking is not yet available in Canada and that the government has yet to deliver on a set of rules and regulations to allow this model to “fully and securely” exist in Canada.
As reported by Vixio, financial data sharing in Canada is currently governed by bilateral data access agreements between banks and third parties. However, third parties often have little choice but to sign these agreements with the terms and conditions set by the banks.
Canada is lagging in payments modernisation
Although millions of Canadians are already sharing their financial data with third parties, they “aren’t being given secure and convenient ways to do it, or, worse yet, are being prevented from sharing their financial data at all”, the campaign website states.
It also points out that Canada is “far behind” the rest of the world on fast payments and, in fact, is “one of the only advanced economies” to not have a real-time payment system.
"While our global counterparts are making their financial sectors work harder for their customers, Canadians are still waiting for their government to do the same," Vronces wrote on LinkedIn.
"We know there are many Canadians who want to speak up, and so the campaign is also about giving Canadians an easy way to let their government know how it can help make life better," Vronces told Vixio.
“It's time to reform our financial system and prioritise Canadians' needs,” the fintech organisation said, calling on Canadians to join the initiative and “demand more from your MP and government”.
“One voice won't make a difference but thousands will,” Fintechs Canada wrote.
The association’s members include large fintech and payment firms such as Block, Fiserv, Stripe, Visa and Wise.
The announcement has received a warm reception from experts and industry participants.
The campaign “most definitely shines quite a stark spotlight on the cause of open banking in Canada”, Lauren Jones, director of market development at the Open Banking Exchange, told Vixio.
“Tying this into the broader lack of progress in Canada across a number of key financial programs, including payments modernisation, is helpful,” she added.
Government timelines remain unclear
The campaign comes amid increasing frustration in the industry related to delays in Canada’s payment modernisation efforts.
The government announced a review of open banking in 2018, with initial plans to launch the first phase of the framework in January 2023.
To support the initiative, Ottawa introduced privacy legislative reforms necessary to enable third-party data sharing and, in March 2022, appointed Abraham Tachjian as open banking lead.
However, Tachjian’s mandate was due to expire at the end of September and several industry players were disturbed by the government’s silence on future timelines and plans on how to proceed with the implementation.
Although Tachjian announced on October 3, days after the supposed end of his mandate, that he would continue in his role until the end of the year, there is still no word from the government on the next steps.
In addition to the open banking framework, there have been delays in other components of Canada’s ambitious payment modernisation efforts which the government committed to in 2016.
This included plans to build an instant payment network called Real-Time Rail (RTR) by 2022, but the project was put on hold indefinitely in June after three delays.
According to Jones, the campaign would be “absolutely correct” to say that, when compared with their international peers, the pace of change is “extremely slow” in Canada.
“The story they are trying to tell is that Canada is falling behind on a global scale; falling behind on open banking, falling behind on instant payments, leading to a potential decline in investment opportunities,” she explained.
“Whether this attempt to rattle the gates of the Department of Finance in Ottawa is successful remains to be seen,” Jones added.
