Open Banking Initiative Canada (OBIC) has published Canada’s ﬁrst Open Banking Manifesto. OBIC is a non-proﬁt organization gathering great minds in ﬁnance, technology and regulations and in partnership with organizations such as CIO Strategy Council to promote and drive the development of open banking in Canada.
“Being the focal point for Consumer-Directed Finance in Canada, we here at OBIC believe that Open Banking can help all Canadians in their ﬁnancial livelihood, especially the 48% of us that are $200 or less away from insolvency at the end of each month,” Christian Clapton, Co-Director of OBIC, said in a press release.
Open banking is a movement that provides third-party financial service providers open access to consumer banking, transaction and other financial data from banks and non-bank financial institutions using APIs. The global progress towards Open Banking is moving quickly in other jurisdictions, including the UK, Australia, New Zealand, Brazil, Singapore, and Hong Kong. The U.S. is also making preparations to implement its own framework.
OBIC designed the manifesto to highlight how Canada is at risk of falling behind these markets and decoupling from this international sector as a part of the integrated global ﬁnancial system.
Open banking enables a networking of account and data across institutions for use by consumers, financial institutions, and third-party service providers — instead of a centralized banking system. Advocates say that open banking gives consumers greater ownership over their financial data and is the gateway for financial services innovation by allowing for greater market competition.
According to the OBIC’s Open Banking Manifesto: An open banking framework will enhance product development, security and fraud prevention, and personalization and customization while maintaining the systemic stability and safety widely recognized as critical cornerstones of the Canadian banking system – leading to beneﬁts and opportunities for all stakeholder groups in the ecosystem.
Read more about the Open Banking Manifesto here.
Another item in the open banking discussions is the role of prepaid in accelerating the movement. This is largely because of prepaid’s cost-effective, low-regulatory burden that enables nimble, relevant offerings. For comparison, prepaid acts as the backbone of the banking-as-service advancements as the movement toward open banking strengthens.
As prepaid cements itself as a key component of the digital payments market — while enabling regulatory-friendly payment solutions that spark greater partnerships between fintechs and banks — this platform should continue to be part of the discussions.