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FDATA North America Submits Comments to Canada’s Department of Finance Pre-Budget Consultations 2024

Contact: Laine Williams, (202) 897-4757, [email protected] 

February 9, 2024 Washington, DC – The Financial Data and Technology Association of North America (FDATA) submitted comments to Canada’s Department of Finance as part of its pre-budget consultations in advance of Budget 2024. Our submission emphasized the necessity for Canada to build upon the inclusion of consumer-driven banking (CDB) in the 2023 Fall Economic Statement, moving towards a fully realized Canadian open finance framework. The letter underscored the significance of CDB as a foundational step towards financial empowerment for consumers and small and medium-sized enterprises (SMEs), fostering a more innovative and competitive financial services marketplace in Canada.

Our letter urged the Canadian government to:

  • Legislate a CDB Framework: Introduce specific language in Budget 2024 to legislate the CDB framework, empowering consumers and small- and medium-sized enterprises (SMEs) with secure access to their financial data, thus ensuring Canada remains competitive in the global financial ecosystem.
  • Establish a Robust Governance Entity: Allocate funding for the creation of a new, neutral, and transparent governance entity to oversee the CDB framework. This body should be capable of making quick, binding decisions and be accountable for its actions, ensuring the framework’s success and longevity, and should be tasked with framework management, API auditing, accreditor oversight, technical standards oversight, liability apportionment, and dispute resolution.
  • Outline a Vision for Open Finance: Beyond CDB, Budget 2024 should detail the government’s approach to open finance, the next evolution in financial services, which promises to unlock unprecedented market innovation and competition for the benefit of Canadian consumers and SMEs.

In the submission, we also asserted that any CDB 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), nimble (i.e. capable of making binding decisions relatively quickly and without undue bureaucracy), and accountable (i.e. explain its decisions and actions and be subject to judicial oversight and administrative law processes) with all stakeholders in the 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.

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FDATA North America February Newsletter

FDATA North America Monthly Newsletter for February 2024

Welcome to FDATA North America’s monthly newsletter! These regular dispatches will share developments from our organization and our 30+ member companies, all of which are promoting financial access and inclusion with open finance use cases. We also include a list of upcoming industry events, and coverage of any market developments that impact fintech innovators. Know someone who’d like to receive these monthly updates? Send them here to sign up.

Member News & Activity

API Metrics published a blog post sharing the top three API trends for 2024, focus on API Discovery, API Validation, and API Conformance. These trends emphasize the importance of discovering and monitoring all APIs for security and efficiency, ensuring APIs meet specific requirements and performance standards, and verifying that APIs conform to their intended use and governance rules.

Basis Theory published a blog post discussing chargebacks, explaining them as bank-initiated reversals of charges in response to consumer complaints, such as fraud or disputes over refunds. The post emphasizes the importance of clear communication, effective customer service, and robust fraud protection measures in payment systems to minimize chargebacks.

Betterment posted a press release announcing the launch of “Betterment at Work,” allowing small business employers to match their employees’ student loan payments with 401(k) contributions. This industry-first solution, aligned with the Secure Act 2.0 legislation, aims to aid workers burdened by student debt in enhancing their retirement readiness by enabling them to save for retirement while paying off their loans.

Codat posted a blog detailing its Bank Feeds API, which now supports platforms like NetSuite, QuickBooks, Sage, Xero, and FreeAgent, simplifying the integration process for corporate card and cross-border payment providers.

Envestnet Yodlee’s Head of Governance, Risk & Compliance Lisa Novier, remarked on the remarkable acceleration of open banking at the Money2020 conference, highlighting an increase of over 140% in their open banking volume from 2022 to 2023. During the event, she also delved into their strategy for educating data providers and discussed the advantages of expanding the Consumer Financial Protection Bureau ruling for both financial institutions and consumers.

EQ Bank published a press release highlighting its “Second Chance” campaign, which challenges Canadians to expect more from their checking accounts, particularly in light of a new survey revealing low awareness about interest earnings and dissatisfaction with financial incentives from banks.

Experian posted a press release announcing its new integration with Dark Matter Technologies, enabling the majority of U.S. mortgage lenders to instantly access verified income and employment information through Experian Verify, integrated with Dark Matter’s Empower loan origination system and Exchange service network.

Financsystech was mentioned in an article on Prensa, discussing the trends of 2022 in Open Finance and Open Insurance, where CEO and Co-founder Danillo Branco, a pioneer in building an Open Source Open Finance as a Service Platform, contributed to the debate on digital transformation and service provision in these sectors.

Flinks published a blog exploring the benefits of Open Banking for commercial banking, highlighting how this innovation is transforming the Canadian financial landscape by offering more efficient, secure, and accessible services to businesses and reshaping operations in an increasingly digital world.

GoCardless was mentioned in “The State of Open Banking: Six Years After PSD2” article in the Fintech Times, where Tom Burton, the Director of External Affairs and Public Policy, discussed the evolution and challenges of open banking payments technology. He emphasized that for open banking to become a primary alternative to card payments, it needs to achieve ubiquity through comprehensive bank coverage, excellent user experience, and integration into digital wallets.

MX published a blog proclaiming 2024 as the year of financial data intelligence, predicting significant growth and success for financial institutions and fintechs that effectively harness and leverage vast amounts of transaction and customer data.

Portabl published a blog titled “Portabl x Mastercard: Start Path Open Banking 2024,” announcing their participation in the Mastercard Start Path Open Banking Program as the first reusable identity platform. This collaboration aims to leverage Portabl’s reusable KYC and verifiable credentials to enhance financial access and consumer choice, by integrating identity with payments within Mastercard’s global network.

Trustly held a webinar titled “Embedded Finance vs Open Banking: What’s the better build for your customers?”, where they explored the significant market potentials of open banking and embedded finance, projected to reach $164.8 billion and $6.5 trillion respectively in the coming years.

Events and Submission Deadlines

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Moneyhub’s Sam Seaton on Open Wishes for the New Year

I have two special requests for the New Year:

I would love to see more institutions, government sectors, and private entities embracing the principles of Open Data, making datasets publicly available in machine-readable format.

Equally important is helping people to become more aware of the value of their own data and how useful it is when used in an Open Data environment.

It is so important to remember the power of Open Data lies in its use, so the ultimate wish would be to see more innovative applications of Open Data in solving real-world problems and enhancing people’s lives.

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FDATA’s Ghela Boskovich on Open Wishes for the New Year

My wishes for 2024 hastening an open data sharing economy are centred around two things:

1) Enhancing trust in the system by ensuring permissioned data sharing and consent best practice principles are adopted by each and every government, industry, sector and scheme. Without a robust consent and authentication framework, trust in the system cannot exist. Consumers need to trust their data is safe and secure before even considering sharing it; without trust, adoption is doomed. Consent and permission is the key to unlocking data sharing.

2) Getting governments to accelerate opening up their own data sets, leading by example in those jurisdictions that have active data sharing legislation in play or being developed. If they want specific industry sectors to participate in those wider schemes, governments can easily incentivise that by cracking open government held data. It also increases outside investment in creating the necessary frameworks to enable safe, secure data sharing across sectors.

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FDATA’s Walter Pereira on Open Wishes for the New Year

In 2024, I believe that some countries in the region will still face technical challenges and issues related to the financing and maintenance of data-sharing infrastructures.

However, Brazil, with its advanced implementation and exploration of investment and insurance data, and the regulatory advancements in Chile, could position both countries as regional and global benchmarks.

The primary challenge for Brazil, in my opinion, may revolve around the monetization of the data collected by institutions, whether they are major banks or third-party providers (TPPs). As for Chile, the key challenge might be the implementation of a technical and governance model that enables the emergence of new use cases.

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FDATA’s Jamie Leach on Open Wishes for the New Year

Open Data has always been and will always be about placing “The Right Data, into the Hands, at the Right Time, Changing the World.”

As we see some regions around the world maturing their regimes whilst others come online, my wish is to see the proverbial “Carrot and Stick” approach be sidelined, with the spotlight placed firmly on “Value Realisation” by the consumer. I hope to see an increase in Collaborative Data Initiatives leading to Greater Consumer Engagement with the realisation that access and control through privacy-focused data channelling into fit-for-purpose Use-Cases can change lives/livelihoods. Success for Open Data is when the user no longer focuses on the puppet strings or rails as the Industry refers to them; and, is not burdened by how it works, but rather the user experience that Open Data allows. Will it increase Data Literacy? It should. Will it provide enhanced consumer experiences and create greater internal efficiencies for the Data suppliers? Quite possibly. Will we see a greater focus on Tech being built with Privacy-by-Design? Definitely.

2024 will see the continued adoption of Open Data practices; some mandatory, some voluntary; ALL will benefit consumers in the long run. 2024 will also be the year that increased focus on the burden of participation must be considered. If we prevent sections of the Industry from participating, we will scuttle Open Data before we even start. 2024 will also be the year of closing the loop between data sharing and action initiation. Without this final piece of the puzzle, the incentives for consumers to adopt Open Data for “part of their requirements” just don’t make sense. If it doesn’t satisfy their entire needs, why change from the antiquated but familiar practices that already exist?!

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FDATA’s Steve Boms on Open Wishes for the New Year

As we usher in the new year, members of FDATA North America are poised with great anticipation for the advancements in open banking and open finance, both regionally and globally. With significant strides made in the United States and Canada, there’s a collective optimism about shaping a more consumer-focused financial landscape.

In the United States, the attention is riveted on the Consumer Financial Protection Bureau’s proposed rule under Section 1033 of the Dodd-Frank Act. FDATA NA members view this as a pivotal shift towards a mandatory regulatory framework in open banking. The hope is that this change will catalyze a financial ecosystem that champions innovation, competitiveness, and inclusivity, breaking free from the traditional dominance of large institutions. The expectation is a financial marketplace that is not only dynamic but also more attuned to the needs and rights of consumers.

The recent developments in Canada, particularly the anticipated enactment of the Fall Economic Statement Implementation Act, 2023, also resonate positively with FDATA NA members. This move is seen as a foundational step towards a structured, mandatory open finance regime. Members anticipate that these measures will significantly advance Canada’s open banking framework, fostering an environment ripe for innovative financial solutions tailored to consumer needs.

Overall, FDATA NA members are hopeful that these regulatory evolutions in the U.S. and Canada will lead to a broader global transition towards secure, efficient, and consumer-driven open banking and finance systems. As we step into this new year, there’s an air of expectancy for transformative changes that could redefine the interaction between consumers and financial services on a global scale.

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FDATA North America January Newsletter

FDATA North America Monthly Newsletter for January 2024

Welcome to FDATA North America’s monthly newsletter! These regular dispatches will share developments from our organization and our 30+ member companies, all of which are promoting financial access and inclusion with open finance use cases. We also include a list of upcoming industry events, and coverage of any market developments that impact fintech innovators. Know someone who’d like to receive these monthly updates? Send them here to sign up.

FDATA North America News

FDATA NA Comment Letter Submitted on CFPB’s Section 1033 NPRM. On December 27, 2023, FDATA NA filed a comment letter in response to the Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Rulemaking (NPRM) on personal financial data rights, which will implement Section 1033 of the Dodd-Frank Act. FDATA views this rulemaking as a crucial step forward for U.S. competitiveness in a global economy in which many other countries have already developed and implemented open finance regimes. In its comment letter, FDATA underscored areas for potential improvements in the final rule that will more effectively align the rule with the vision the CFPB presented when announcing its pursuit of this rulemaking. FDATA released a statement on its submission of the comment letter, which can be found here.

Member News & Activity

API Metrics published a blog post providing comments to the CFPB’s Personal Financial Data Rights rulemaking, emphasizing the need for real-time compliance monitoring, scalability testing, standardization and compliance verification, and improved performance and uptime metrics in open banking. They stated that these measures are crucial for enhancing the security, efficiency, and consumer experience in the financial data services ecosystem.

Basis Theory published a blog post discussing the concept and importance of frictionless payments in both physical and digital retail environments. It highlighted the benefits and challenges of implementing such systems, emphasizing their growing relevance in the evolving e-commerce landscape and the increasing use of mobile technologies.

Envestnet Yodlee hosted a webinar entitled “The Opportunities and Challenges of Open Banking in Wealth Management.” During the webinar, they provided insights into how firms can leverage the right infrastructure to gain a competitive edge through enhanced data utilization, improved customer experiences, and increased loyalty, while also addressing U.S. open banking regulations and exploring innovative use cases.

Experian issued a press release announcing they integrated NeuroID’s behavioral analytics into its fraud prevention solutions, including CrossCore® and Precise ID®, to enhance protection against fraud rings and AI-enabled bots.

Fiserv published a press release discussing the rise of embedded finance and its integration into various business sectors, emphasizing how it enhances customer experiences and financial services.

Flinks posted a blog highlighting the transformative impact of transactional data on lending operations, detailing how it enhances understanding of borrowing behaviors and informs credit decision-making.

GoCardless was featured in an Open Banking Expo Unplugged podcast to discuss the key themes and trends set to define Open Banking payments in 2024. During the podcast, Siamac Rezaiezadeh, Vice President of product marketing and insights at GoCardless, took stock of the progress made in 2023, as Open Banking payments took off.

Intuit published a press release announcing their global QuickBooks brand campaign, “Business Differently,” which highlighted the innovative ways small businesses and solopreneurs work towards success.

Morningstar announced it unveiled Direct Web Services, a suite of APIs designed to enhance digital platforms with sophisticated investment data, research, and calculations.

Ozone API published a blog entitled “5 Observations from Supporting the Major Global Open Banking Standards,” which explored the fragmented yet interoperable landscape of global open banking standards and highlighted their mission to assist banks and financial institutions in leveraging these standards for regulatory compliance and revenue generation.

Plaid was featured in a PR Newswire article announcing a significant data-access agreement between it and TD Bank Group, facilitating secure and convenient financial data sharing for TD customers across North America.

Questrade was featured in a Yahoo Finance article announcing that it has been ranked #1 for providing the best mobile experience among Canadian self-directed online brokerages, as per Surviscor’s 2023 Mobile Brokerage Experience Review.

Trustly published a press release highlighting the transformative impact of Open Banking APIs in improving business processes for financial institutions. The release emphasized how these APIs facilitate secure and automated data exchange, driving efficiency, and innovation in the banking sector, and details Trustly’s role in enhancing customer experiences and operational capabilities.

Xero announced it partnered with Flinks to connect more Canadian and U.S. small businesses to their banking data, offering secure access to over 20 direct bank connections and enhancing the accuracy of banking transactions for Xero’s customers.

Events and Submission Deadlines

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FDATA North America: Comment Letter Submitted on CFPB’s Section 1033 NPRM

Contact: Laine Williams, (202) 897-4757, [email protected] 

December 27, 2023 Washington, DC – The Financial Data and Technology Association of North America (FDATA), a trade association representing more than 30 financial technology companies and consumer-permissioned data access platforms in Canada and the United States, today filed a comment letter in response to the Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Rulemaking (NPRM) on personal financial data rights, which will implement Section 1033 of the Dodd-Frank Act.

Steve Boms, Executive Director of FDATA, released the following statement:

“We are pleased to comment on the CFPB’s proposed personal financial data rights rulemaking, which once implemented, will create a legally binding consumer financial data right in the United States. Under this open finance regime, consumers will have the right to access and securely share their financial data electronically with third-party providers of financial tools, products, and services, heralding an era of improved competition and greater consumer control in the U.S. financial services marketplace. Beyond the obvious benefits to consumers, FDATA views this rulemaking as a crucial step forward for U.S. competitiveness in a global economy in which many other countries have already developed and implemented open finance regimes.

Our comments to the CFPB underscore areas for potential improvements in the final rule. We believe these changes will more effectively align the rule with the vision the CFPB presented when announcing its pursuit of this rulemaking, as well as with the open finance regimes implemented by other jurisdictions globally. FDATA looks forward to continued engagement with the CFPB as it works to finalize this pivotal rule in 2024.”

A FDATA member company released the following statement alongside the submission of FDATA’s comment letter.

Brian Costello, Head of Data Aggregation Strategy and Governance at Morningstar Wealth, a member of FDATA, stated:

“Morningstar Wealth actively champions the interests of both investors and the professionals who serve them as the U.S. Open Banking landscape transitions from a commercially managed ecosystem to a regulated financial data right for consumers. The CFPB’s Notice of Proposed Rule Making underscores the Bureau’s strong commitment to addressing this pivotal issue, which holds significant implications for millions of Americans. FDATA’s response letter draws upon the collective expertise of its diverse membership of responsible innovators to provide practical guidance and recommendations essential for the seamless adoption and execution of the final rule. As long-standing members of FDATA, we are pleased to contribute our perspective and experience to this response.”

Click here to read FDATA’s full comment letter.

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FDATA North America December Newsletter

FDATA North America Newsletter December 2023

Welcome to FDATA North America’s monthly newsletter! These regular dispatches will share developments from our organization and our 30+ member companies, all of which are promoting financial access and inclusion with open finance use cases. We also include a list of upcoming industry events, and coverage of any market developments that impact fintech innovators. Know someone who’d like to receive these monthly updates? Send them here to sign up.

FDATA North America News

FDATA NA Statement On Canada’s FES Implementing Consumer-Driven Finance. On November 21, 2023, the Canadian Government released its 2023 Fall Economic Statement, which included a comprehensive framework for consumer-driven finance and open finance directives. The Canadian Government’s implementation plan includes a data portability right for financial institutions and fintechs, a third-party accreditation regime with audits and a public registry, an overseeing government-led entity, a single technical standard deemed fit for purpose, and a liability framework for consumer harm in cases of data misuse or fraudulent account access. FDATA released a statement on the inclusion of consumer-driven finance in the FES, which can be found here.

Member News & Activity

API Metrics announced it launched a free service level agreement (“SLA”) monitoring feature for popular API suppliers like Amazon Web Services, Azure, and Google Cloud, aimed at helping application owners track API performance and automatically request service credits for issues. This new capability allows easy integration and monitoring without coding, providing insights into API quality for both technical and business users.

Basis Theory published a blog post emphasizing the importance of continuously enhancing payment performance for businesses, highlighting strategies such as diversifying Payment Service Providers, employing tokenization for data management, and optimizing transactions through automated processing and specific payment method routing.

Envestnet Yodlee published a blog post detailing the expansion of Australia’s Consumer Data Right (“CDR”) into open finance, emphasizing the inclusion of non-bank lending in the statutory data sharing regime from November 2024. This development highlights significant steps for non-bank lenders to become compliant data holders under new CDR rules.

Experian announced it expanded its digital verification service, Work Report™, by partnering with Datagraphic, enabling employees using Epay to consent to digital payroll information sharing for identity verification. This integration now covers 82% of UK employees, significantly streamlining financial processes like mortgage and car finance applications.

Fiserv published its consumer survey, “Expectations & Experiences: AI and Payments Innovation,” highlighting the increasing role of conversational and generative AI in personal finance management, with consumers using these technologies for various financial insights. The survey revealed the growing opportunities and challenges for AI in banking, emphasizing the need for financial service providers to adapt to evolving consumer preferences.

Flinks announced that the Large Credit Union Coalition (“LCUC”) in Canada has chosen Caspian One as their preferred partner to create a customized Open Banking platform, tailored to the Canadian credit union system.

Intuit announced new e-commerce innovations for QuickBooks Online, designed to aid small businesses in managing their inventory across multiple sales channels from a single platform.

Method posted a blog on how their partnership with Budge enabled the launch of a financial management solution for millennials struggling with personal debt and savings. Budge’s platform, supported by Method’s technology, offers tailored financial advice and seamless integration of users’ debt accounts.

MX was featured in a B FinTec Buzz article announcing their new open finance product innovations, including advanced data-driven insights, budgeting tools, and a mobile banking SDK to enhance financial health and enable customized mobile banking app development.

Plaid was featured in a Alkami Technology press release announcing their partnership to provide financial institutions direct API access to Plaid via the Financial Data Exchange Aligned (“FDX”) API Core Exchange.

Questrade published a press release welcoming the Canadian Government’s Fall Economic Statement, which outlines steps towards establishing Canada’s open finance framework in Budget 2024.

Trustly published a blog outlining five key use cases of Open Banking for merchants. These use cases include providing instant payouts for quick consumer refunds, verifying account information efficiently, enhancing “Know Your Customer” (“KYC”) processes through bank-grade data, preventing payment fraud with secure ACH transactions, and modernizing subscription payments with stable bank account alternatives.

Xero was featured in a Open Banking Expo article for unveiling two new payment features aimed at aiding UK small businesses with cash flow management. These features, including a bill payments tool powered by Open Banking, enable businesses to efficiently handle bills directly within Xero, marking Xero as the first major small business cloud accounting software in the UK to offer such Open Banking-enabled functionalities.

Events and Submission Deadlines

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