Further to our previous post which introduces the concept of open banking and how Canada is approaching it, the Department of Finance, through its Advisory Committee on Open Banking (the Committee), has completed its initial review (the First Phase Review) which focused on: (i) the ways in which open banking would provide meaningful benefits and improve outcomes; (ii) how risks should be managed to ensure confidence in the system; and (iii) how the government should approach implementing open banking. The Committee has now released its findings following the First Phase Review. Its key findings, recommendations and proposed next steps are detailed below.

Key findings:

Following the First Phase Review, the key findings of the Committee are as follows:

  • Open banking should be rebranded as "consumer-directed finance" which more accurately captures what it is.
  • Consumer-directed finance has the potential to deliver meaningful and broader benefits to Canadians over the current "screen scraping" environment.
  • Recognition that consumer-directed finance could amplify risks to meeting privacy and security objectives. However, there was a unanimous agreement that risks could be managed via an accreditation system.
  • Majority of stakeholders view the government as an enabler that will allow innovation to flourish.


The Committee recommended that Canada should move forward to enable consumer-directed finance, although within the following important parameters:

  • Consumer-directed finance should be focused on enabling consumer choice and meaningful control.
  • Consumer-directed finance should give consumers confidence and engender trust. It should be secure, and should respect and enhance privacy. It should also provide a clear consumer accountability mechanism to ensure liability rests with the appropriate party.
  • Innovation should guide the development of consumer-directed finance, founded on a safe, secure and standardized data-sharing mechanism.

Next steps:

For the next phase of its review, the Committee will focus on data security in financial services. In spring this year, the Committee will work with stakeholders across Canada with respect to potential solutions and standards to enhance data protection in the financial sector. This will likely include the need to examine certain issues, such as governance, consumer control of personal data, privacy, fraud and security. It is expected that the results of the findings will be delivered to the Minister of Finance by December 2020.

We will continue to update our readers with further developments. In the interim, do not hesitate to contact the author should you have any questions.

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