Canada Archives - Financial Data and Technology Association (FDATA)

August 3, 2023by rebecca rebecca No Comments

FDATA North America Submits Comments to Canada’s Standing Committee on Finance Pre-2024 Budget Consultations

August 3, 2023, Washington, DC – The Financial Data and Technology Association (FDATA) of North America submitted comments to Canada’s Standing Committee on Finance (FINA) as part of its pre-budget consultations in advance of the 2024 budget. Our submission stressed that Canada needs to remain diligent in its pursuit of an open banking framework which will provide Canadians much needed relief in banking fees and other expenses, that Canada must recognize that other countries are rapidly implementing their own open banking regimes, and remain keenly aware that every day that passes without open banking development risks leaving Canadians further behind their international counterparts and competitors.

Our letter also expressed disappointment with the lack of progress on the open banking file, and called on the government to:

Include language in Budget 2024 to implement the recommendations that Open Banking Lead Abraham Tachjian will provide in his forthcoming final report and rapidly implement Canada’s open banking system, including funding for the development of a neutral, transparent, and nimble governance function;
Include language in Budget 2024 outlining the government’s approach to open finance, the next logical step after open banking, and the framework needed to truly unlock market innovation and competition to benefit Canadian consumers and businesses; and
Amend the Canadian Payments Act to enable Payments Canada to expand its membership to include federally regulated payment service providers, providing access to its forthcoming real-time payment system.

In the submission, we also asserted that any open banking governance entity in Canada must be neutral (i.e. not controlled by any particular stakeholder(s) with commercial interests in the ecosystem), transparent (i.e. it invites and considers stakeholder input and subjects its decisions to an open, publicly visible process), and nimble (i.e. capable of making binding decisions relatively quickly and without undue bureaucracy), with all stakeholders in the open banking system agreeing to comply with the decisions and determinations made by the open banking governance entity as a condition of being active in the market.

A full copy of the submission is available here.

September 30, 2022by rebecca rebecca No Comments

FDATA North America Highlights Importance of API Standards and Monitoring

September 29, 2022, Washington, DC -As both Canada and the United States continue to move towards open banking via APIs, it is essential that minimum API standards be set to ensure that consumers and SMEs have uninterrupted access to their financial data.

To this end, FDATA has developed four principles that will be critical to the design of a well-implemented API environment in North America. These principles cover data scope, reliability standards, fallback options, and the necessity of establishing a neutral monitoring agency. These principles can be found here, and below:

Any non-proprietary data available to an end user through a data provider’s online customer portal or paper statement must also be required to be made available in any API a data provider implements in an open banking environment. At present, data providers unilaterally determine which data elements their customers can and cannot share with third parties. In a true open banking environment, the customer – not their financial services provider – is empowered to make this decision. Within the PSD2 framework in Europe, this has led to services being withdrawn as API functionality did not keep pace with pre-existing technologies.

Any APIs built by data providers to facilitate data sharing in an open banking environment must, at a minimum, be as reliable as that data provider’s customer-facing online portal. Regulatory agencies in both Canada and the United States have understandably set prescriptive requirements regarding the uptime of online customer-facing portals at financial institutions to ensure that consumers and SMEs have continual access to their data. This same standard must apply in any open banking environment.

To the extent data requested by a customer is not available through an API connection, a fallback option must be permitted to be used to access the requested data. The legal customer data right upon which an open banking environment is built cannot be ignored if a data element requested by a customer is not available through a data provider’s API or if that API is down or unresponsive. Screen scraping must be maintained as a fallback option that may be used to access any data not included in or available from a data provider’s API.

A neutral entity must be responsible for regularly monitoring the robustness, reliability, and usability of data providers’ APIs in an open banking environment. A neutral entity should be tasked with the responsibility for regularly measuring and reporting, among other metrics: the uptime of all open banking providers’ APIs; whether all of the data available to the end user on the data provider’s online customer portal and/or paper statement is available through the API; the responsiveness of the API; whether the API is constructed in such a manner that it introduces unnecessary friction in the customer’s data connectivity journey. These measurements should be the basis upon which a fallback option is permitted. Ideally, these metrics would be made publicly available to facilitate the ability of end users to identify the effectiveness of their financial provider’s data sharing capabilities. Such an entity should come from outside of the sector itself in order to not be perceived as having their own fiduciary interest in the metrics delivered.

Issues related to API robustness, reliability, and user experience have stunted the growth of open banking use cases in multiple markets across the globe that have moved more quickly than North America toward implementing legally binding customer financial data rights. It has been evident from experiences in Europe, the United Kingdom and Australia that well-defined standards without equally well-defined systems to measure them in a way that all parties can agree to leads to increased friction and a technical overhead placed on the regulator which they may not be well-positioned to adjudicate. Ensuring at the outset minimum API requirements for any open banking data providers, as well as a neutral monitoring entity to measure the quality and reliability of those APIs, will prevent Canada and the United States from experiencing similar issues as we begin our own North American open banking journey.

September 26, 2022by rebecca rebecca No Comments

FDATA North America Submits Comments to Canada’s Standing Committee on Finance Pre-2023 Budget Consultations

September 26, 2022, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to Canada’s Standing Committee on Finance (FINA) as part of its pre-budget consultations in advance of the 2023 budget.

In its comments, FDATA North America called on the government to:

Include language in Budget 2023 asserting the importance of governance in an open banking framework, and that any open banking governance entity must be neutral, transparent, and nimble;
Allocate sufficient and sustained funding in Budget 2023 towards the implementation of an open banking framework and governance entity; and
Include language in Budget 2023 outlining its approach to Open Finance, the next logical step after Open Banking, and the framework needed to truly unlock market innovation and competition to benefit Canadian consumers and businesses. This includes an amendment to the Canadian Payments Act to grant federally regulated payment service providers access to Payment Canada’s forthcoming real-time retail payment system and make them eligible for membership in Payments Canada.

In the submission, FDATA NA also asserted that any open banking governance entity in Canada must be neutral (i.e. not controlled by any particular stakeholder(s) with commercial interests in the ecosystem), transparent (i.e. it invites and considers stakeholder input and subjects its decisions to an open, publicly visible process), and nimble (i.e. capable of making binding decisions relatively quickly and without undue bureaucracy), with all stakeholders in the open banking system agreeing to comply with the decisions and determinations made by the open banking governance entity as a condition of being active in the market.

A full copy of the submission is available below:

FDATA North America 2023 Pre-Budget Consultations

February 22, 2022by rebecca rebecca No Comments

FDATA North America Submits Comments to Canada’s Department of Finance in Response to 2022 Budget Consultation

February 22, 2022, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to the Canadian Department of Finance, Finance Minister Chrystia Freeland and Associate Minister Boissonnault as part of the Canadian government’s 2022 Pre-Budget consultation.

With the resumption of Parliament, and Budget 2022 planning well underway, our letter urged the Department to fully implement all phases of the Advisory Committee on Open Banking’s recommendations, which lay out a thoughtful, well-researched approach to building a “made in Canada” open finance system that puts consumers and small businesses at the center of a more competitive financial marketplace.

Our letter also clarified that the first step to achieving this important goal, and to provide market stakeholders with a legally binding policy framework under which such a regime can be delivered, is to appoint an Open Banking Lead, which should be responsible for working with industry and government stakeholders to create the policy and governance standards under which open finance can be delivered in early 2023.

We also called on the government to begin work on the Advisory Committee’s second phase, which must include write access – a critical component of account creation and account switching capabilities – as well as modernization of the Canadian Payments Act to ensure payments service providers, including credit unions and fintechs, have access to the critical Payments Canada system. As we say in the letter, these are thorny issues which require much consideration and engagement and will take time to get right.

FDATA Finance Canada Budget 2022 submission

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States, and Mexico with aggregation-based tools to better manage their finances.

Members include air (Alliance for Innovative Regulation), APImetrics, Basis Theory, Betterment, BillGo, Codat, Direct ID, Envestnet Yodlee, Equitable Bank, Experian, Finansystech, Fiserv, Flinks, Interac, Intuit, Inverite, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Rocket Mortgage, SaltEdge, Trustly, ValidiFI, Vaultree, VoPay, Wealthica, Xero, and others.

February 7, 2022by rebecca rebecca No Comments

FDATA North America Submits Comments to OSFI’s Consultation on Technology and Cyber Risk Management

February 7, 2022, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to the Office of the Superintendent of Financial Institutions (OSFI) as part of its public consultation on Draft Guidance B-13: Technology and Cyber Risk Management.

Throughout the response, FDATA North America discussed the interplay between B-13 and the development of open banking in Canada, particularly that the harmonization of efforts between the Department of Finance’s open banking work and OSFI’s approach to third-party cybersecurity risk will be essential. FDATA North America’s Executive Director Steve Boms noted that as OSFI develops its technology guidelines for third-party technology partners to banks, “we respectfully offer that significant consideration has already been undertaken on this issue by the Department of Finance, and stakeholders would benefit from some form of public documentation that clearly distinguishes OSFI’s authority and responsibilities with regards to third-party financial technology providers from those of the Department of Finance as it works to implement a Canadian open banking system.” Boms noted that publicly clarifying how these two projects will interact will provide clear direction to the marketplace about how third-party providers can continue to offer their valuable financial services and products in an innovative, competitive marketplace.

Additionally, FDATA North America touched on the importance of clarification from OSFI that providers with whom consumers engage directly, without any intervention from their federally regulated financial institution (FRFI), do not fall under the B-13 framework. Thus, the goal of the consultation should be to ensure that FRFIs third-party risk management requirements mirror their ability to oversee entities with whom they have direct relationships, and not to overburden FRFIs with system-wide oversight that instead “should fall to a collaborative regulatory effort including Finance Canada’s open banking accreditation regime.”

Boms concluded by noting that in order to facilitate enhanced market competition and customer choice, “it is imperative that OSFI with the Department of Finance to harmonize regulatory expectations of customer-selected financial providers as open banking takes hold in Canada.”

FDATA North America Submission to OSFI’s B-13 Consultation on Technology and Cyber Risk Management

November 10, 2021by rebecca rebecca No Comments

FDATA North America Joins Industry Trade Groups in Letter to Department of Finance on Implementation of Recommendations from the Advisory Committee on Open Banking Report

November 10, 2021, Washington, DC – Last week, the Financial Data and Technology Association (FDATA) of North America, along with the Paytechs of Canada Association and the Canadian Lenders Association (CLA), sent a joint letter to Finance Minister Chrystia Freeland requesting that the Department adopt the phase one and two recommendations of the Advisory Committee on Open Banking report and urging its public support for the same.

In the letter, the groups, whose organizations represent nearly 250 financial technology companies, emphasize the importance of swift implementation of the recommendations to ensure Canada remains competitive in the global market. Countries around the world, from the United Kingdom and New Zealand to Australia and the United States, have seen marked improvements in financial access and inclusion through open finance products delivered by technology-based financial services providers. “By contrast, Canadian consumers or small businesses have no legally binding right to their own financial data, which stifles competition and innovation in the financial services marketplace,” the groups state.

Additionally, the groups state that a delay of implementation of the Advisory Committee’s recommendations open the door for some of Canada’s large financial institutions to dismiss the government’s intention to deliver open finance in line with the report’s recommendations, which undermine the certainty around the commitments.

“It is critically important that the government confirm to financial institutions, financial technology companies, and Canadian consumers and small businesses its intention to implement an open finance regime in line with all of the Advisory Committee’s recommendations,” the groups state. Specifically, they point to the appointment of an open banking lead “as soon as possible,” creating a legally binding financial data right, and beginning work on the Advisory Committee’s second phase, “which must include payment initiation and account creation capabilities, as well as a formal governance entity.”

September 14, 2021by rebecca rebecca No Comments

Member Spotlight: Interac

In 1984, Canada’s top financial institutions came together to create Interac Association, a cooperative venture dedicated to giving Canadians broader access to their money through a single shared network. Twelve years later, eight of the founding institutions created Acxsys Corporation, a new entity that would develop new business partnerships and services for financial transfer, online payments, and international services.

To better fund innovation and reduce certain business, operating and legal complexities, the two entities reorganized in 2018 to form Interac Corp. Today, Interac is one of the most trusted financial service brands in Canada, operating an economical, world-class debit payments system with broad-based acceptance, reliability, security, and efficiency, helping more than 30 million Canadians families and businesses feel more in control of their money.

The Interac team are natural collaborators. They know that the benefits of co-operation outweigh the risks of fragmentation. The diversity of thought that exists when companies (and even competitors) come together produces better outcomes and solutions. Interac is a proud member of FDATA North America and is actively working with industry and government colleagues across the ecosystem to explore open banking solutions for Canadians.

The financial services company’s Innovation Lab and New Ventures team has a mandate to look ahead at the company’s three plus year horizon for new innovations. They research, develop strategies and pilot new solutions before taking them to market.

A foundational requirement of emerging solutions is to build consumer trust. Canadians need to trust that new technology is not only secure, but that it will provide meaningful benefits in their lives. A recent Interac survey found being in control of their financial data is important to 90 per cent of respondents, and more than half said a new financial data sharing option will “greatly benefit” Canadian consumers.

At Interac, leaders share in this optimism for open banking to support consumer needs and they are committed to collaborating with financial institutions and fintech companies and serving as a bridge for the ecosystem. The team sees great promise for Canada’s future open banking framework to enable the development of data-driven products and services that will increase access to affordable solutions tackling pressing personal and business needs such as debt reduction, benefits processing, financial planning, and the provision of faster loans.

Oscar Roque, VP, Strategy and Emerging Solutions at Interac, sees an opportunity to form a minimum viable ecosystem (MVE) for open banking, grounded in a clear, easy, and transparent consent experience. “Our collective participation in building an MVE will set the stage for data portability and empower Canadians to take control of their data – all for the betterment of our society.”

September 3, 2021by rebecca rebecca No Comments

FDATA North America Submits Comments to Ontario’s Privacy Protection Engagement Consultation

September 3, 2021, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to Ontario’s consultation on efforts to strengthen and modernize privacy protections in the province.

In its comments, FDATA North America called on the Ontario government to include a legally binding financial data access and portability right in any forthcoming data protection legislation or regulation. Executive Director Steve Boms pointed to other countries around the world who have provided legally binding data access, privacy, and portability regimes for their citizens and pointed to existing statutory and regulatory protections that work towards achieving this goal. “Ontario, and Canada more broadly, must support the rights of individuals to access and transfer their financial data, through data portability, to keep pace with other international standards that consider this right to be a key feature of a modern privacy regime,” Boms noted.

In order to build an ecosystem in which Ontarians’ financial data is protected while providing for the right to benefit from data access and data portability rights, Boms highlighted the importance of competition and adequate protections for data privacy and security in a data-driven financial services ecosystem. Doing so will deliver lower costs, better services, and better outcomes for consumers’ and small business’ financial outcomes, he stated. Boms noted that approximately four million Canadians already utilize at least one financial technology application which relies on consumer consent and enables them to control which providers they allow to access their data, how their data is being used, and when access to their data is revoked.

Boms concluded by noting that while the federal government moves forward slowly, Ontario can – and should – provide for stronger financial data access rights for its residents more quickly.

FDATA North America Submission to Ontario Government on its Privacy Protection Engagement Consultation

Members include air (Alliance for Innovative Regulation), APImetrics, Basis Theory, Betterment, BillGo, Codat, Direct ID, Envestnet Yodlee, Equitable Bank, Experian, Fiserv, Flinks, Interac, Intuit, Inverite, Kabbage, Marble, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, SaltEdge, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.

August 18, 2021by rebecca rebecca No Comments

FDATA North America Submits Comments to Alberta’s Privacy Protection Engagement Consultation

August 18, 2021, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to Alberta’s consultation on efforts to strengthen and modernize privacy protections in the province.

In its comments, FDATA North America called on the Alberta government to include a legally binding financial data access and portability right as it considers how best to promulgate data privacy standards in the province. FDATA North America Executive Director Steve Boms noted that a holistic and evidence-based approach should be taken “that recognizes the importance of data access and portability for consumers and small businesses across the province” while taking into account the realities of modern technology and digital business.

In order to build an ecosystem in which Albertans’ financial data is protected while providing for the right to benefit from data access and data portability rights, Boms highlighted the importance of competition and adequate protections for data privacy and security in a data-driven financial services ecosystem. Doing so will deliver lower costs, better services, and better outcomes for consumers’ and small business’ financial outcomes, he stated. Boms noted that approximately four million Canadians already utilize at least one financial technology application which relies on consumer consent and enables them to control which providers they allow to access their data, how their data is being used, and when access to their data is revoked.

Boms concluded by noting that while the federal government moves forward slowly, Alberta can – and should – provide for stronger financial data access rights for its residents more quickly.

FDATA North America Submission to Alberta Government on its Privacy Protection Engagement Consultation

August 3, 2021by rebecca rebecca No Comments

FDATA North America Submits Comments to Canada’s Standing Committee on Finance Pre-2022 Budget Consultations

August 3, 2021, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to Canada’s Standing Committee on Finance (FINA) as part of its pre-budget consultations in advance of the 2022 budget.

In its comments, FDATA North America called on the government to fully embrace a digital-first future for its financial sector as well as a consumer-centric model for its privacy arena, and pointed to a customer-directed finance (CDF) environment as a cornerstone of this future system. This new legal framework will “improve access to financial services, ensure a more level regulatory system for financial service providers, improve competitiveness, and foster innovation, all of which will contribute to health and sustained macroeconomic growth.”

To achieve a modernized open finance system that mitigates risks and protects consumers and small businesses by ensuring that providers’ privacy protections meet regulatory standards, that customer privacy is assured regardless of whether their chosen service provider is a financial institution or non-bank fintech, and recourse mechanisms to make consumers affected by a data breach whole, FDATA North America suggests that the government should include language in Budget 2022:

implementing a CDF regime that include clear definitions of consumer and small business financial data rights, scope, and portability; and
to enshrine a new CDF Implementation Entity (IE) tasked with the design and implementation of open finance in Canada.

Without this framework, Canada will remain in a financial status quo where consumers and other end users lack control of their personal information and cannot benefit from financial innovation. By delaying this approach, FDATA North America argues that Canada risks falling further behind as a world leader in digital innovation and misses an opportunity to provide cutting-edge financial services to its consumers and small businesses.

FDATA North America Submission for the Pre-Budget Consultations in Advance of the Upcoming Federal Budget