Finance announces second phase of open-banking consultations

The federal government is embarking on the second phase of its consultation on open banking, which will focus on data security.

Finance Minister Bill Morneau announced that the federal Advisory Committee on Open Banking, which undertook an initial review of open banking, will now focus on data security in financial services in a follow-up review.

Starting in the spring, the committee will consult on potential solutions and standards for enhancing data protection in the financial sector.

The consultation will consider issues such as governance, control of personal data, privacy and security. It will provide its recommendations to Morneau later this year.

It its initial consultation, the committee found that while some data sharing is already happening, more secure infrastructure would provide better protection for consumers and enhance standards in the financial sector.

“Over the coming months, the advisory committee will work with stakeholders across Canada to deliver advice on potential solutions that provide secure channels for consumers to use these new services,” the Department of Finance said.

The government has been considering open banking — which would enable greater competition in the financial sector by facilitating data sharing between traditional financial firms and innovative fintechs — since the 2018 federal budget.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.