Who Owns Your Banking Data?
Ivey Business Journal
Canada’s Department of Finance recently began consultations on open banking—a global trend enacted last year in Britain and the European Union and soon rolling out in Australia. Under open banking, you would be able to authorize apps developed by fintech companies to access your bank account in order to provide services you want, such as reporting, budgeting, or forecasting. The issues that need to be addressed to make open banking work for Canadians include scope, security, stages, and literacy. Data security (and privacy) is the #1 issue, and Canada eventually needs to establish both data protection standards and a code of consumer data rights to get the most out of the digital economy. Canada’s proposal does not include a digital identity system to replace physical documents (such as a passport or identity card). The country should adopt two standards to increase security: mandating standardized APIs that third-party developers can use to build banking apps, and mandating PCI DSS-compliance for fintech firms operating in payments. Canada should roll out open banking in stages, and it should be accompanied by a major effort to raise financial literacy—consumers need to be informed and protected.
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