Opportunities in Open Banking

Prepared by FDATA North America

Foreword The Financial Data and Technology Association (“FDATA”), headquartered in Edinburgh, Scotland, is the leading global trade association advocating for open banking.

FDATA was formed in the United Kingdom during the negotiations to add account data access to the Second Payments Services Directive (“PSD2”) in 2013. In addition to working with European Union policymakers, 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.

Having helped UK regulators to shape the agenda that led to the formation of UK Open Banking Implementation Entity (“OBIE”), FDATA was asked to serve on the Entity’s Steering Group and played a significant role in helping OBIE in the drive for high-quality standards and in ensuring that regulators and policymakers have been kept fully involved in addressing the most challenging areas.

FDATA North America was founded in early 2018 by several firms whose technology-based products and services allow consumers and small businesses to improve their financial wellbeing. The group counts innovative leaders such as Cardlytics, Envestnet Yodlee, Flinks, Intuit, Kabbage, Lendified, Moven, Morningstsar, MX, Onist, Questrade, Quicken Loans, Quovo, Plaid, and others, as its members. FDATA North America’s members provide approximately 3.5 million Canadians, or roughly 15 per cent of Canada’s adult population, with aggregation-based tools to better manage their finances.

Opportunities in Open Banking

Table of Contents Foreword ...... 1 Executive Summary ...... 2 Chapter 1: What is Open Banking? ...... 5 Understanding financial data ...... 8 Shifting the competitive landscape ...... 8 Overview of banking in Canada ...... 9 Chapter 2: Benefits of Open Banking ...... 13 For individual consumers ...... 14 For businesses ...... 16 For FinTech & innovators ...... 17 For banks ...... 18 For regulators ...... 19 Chapter 3: Consent & Consumer Protection ...... 20 Clear & understandable consent ...... 21 Designing a liability model ...... 23 Chapter 4: Data, Technology & Open Banking ...... 25 Today’s data sharing practices ...... 25 Next generation of data sharing ...... 26 Standardizing technical requirements ...... 27 Managing historical data ...... 28 Chapter 5: Effective Policy & Oversight ...... 29 Glossary ...... 31

• • • 2:CHAPTER • • • • 1 CHAPTER ExecutiveSummary Opportunities inOpen Banking

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wering customer chose, ensuring customer protection and enabling industry innovation tools like automation, artificial intelligence and predictive analytics predictive and intelligence artificial automation, like tools Regulators proprietarysolutions broader suite of products and services without the burden of building and maintaining Banks finances their understand and FinTechs and innovators wheremoney their and they when spend how, understanding manage financial and flow cash Businesses health financial improved and lower at prices products Consumers Value data Transaction data Customer :WHAT BENEFITS OF OPEN BANKING OF BENEFITS ing recognizes that consumer demand demand consumer that recognizes ing -

– added customer data added il emgn ter uies oe t gnrt nw eeu, rvd a provide revenue, new generate to model business their reimagine will

t IS OPEN BANKING? IS oday, it happens without

will will leverage technology and innovation to improve effectiveness through will be able able be will will receive better customer service, personalized and intuitive financial financial intuitive and personalized service, customer better receive will

ancial data in data ancial ,

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both individuals and businesses businesses and individuals both will will revolutionize how people and

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FDATA North America • • • • 1:CHAPTER SUMMARY driver talent. talent Canadian innovation, for retaining capital, catalyst greater attracting thereby a is framework an of implementation The value for c to attracted chall is talent technical Likewise, are capitalists participate. and readyfund to venture business good the a opportunity, is there If opportunity. Fin to key ar which capital, venture and Talent Opportunities inOpen Banking

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12

FDATA North America 15 innovators and There with compete otherbanks. to banking open of form some implement to forced more than half indicate they will be a while entrants, FinTechs market new other with compete to say adopting open banking is cr Two demand. to customer from pressure the feeling reluctant to access been provide have While banks bank. single a within even difficul legacy U customers. and vendors betweentechnology Banks choice. and improvecustomer service, to designed satisfaction is both individuals and businesses untouched. industry har and Recognizing creates data financial share and today systems control do own, that models business and opportunities to customers Empowering Chapter 2: Benefits ofO Opportunities inOpen Banking

Accenture( nfortunately, the complexity of of complexity the nfortunately,

are t to track customer journeys customer track to t ae been have 2017) Open Banking Survey Banking 2017) Open banking systems makes it it makes systems banking several key benefactors of open banking: banking: open of benefactors key several 15 -

thirds of U.S. banks banks U.S. of thirds , banks

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pen Banking pen .

FAITH REYNOLDS, UK OPEN BANKING IMPLEMENTATION ENTITY IMPLEMENTATION OPEN BANKING UK REYNOLDS, FAITH wrong. go things when help get and safely easily, Banking Open use can they that are ben Those convenient. more and quicker simpler, money managing of that can make the boring and anxiety advice, money “ From budgeting apps to personalised quotes and personalisedquotesand budgetingto From apps

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13

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15

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Unbanked andthePrecariously 17 andFeb. Commerce, 1 2018 16 players all for opportunities creates banking quickly will parties both start, to uncomfortable be may banks and FinTechs between relationships the While to able and intuitive providers investment, other and and FinTechs for ability the unlocking innovation tightly stimulates available only the previously within was that data entrants Empowering field playing market the FinTechs levels between banking Open For FinTech & innovators many Ca of outcomes a positive impact on the financial literacy and advice. improve and lower to access financially; struggle might availa a when predict of to ways identify range full the and habits financial their understand consumers will regime banking well A support prosperity. financial personal to tools and services to access of leads to poor fina exclusion Financial lenders. payday as such t resort providers, who, due to their lack of access to traditional Peoples Indigenous and households income are who range from bank Indigenous a Peoples in Canada is estimated to have not account. do Canadians million banking open benefit key another is inclusion Financial Opportunities inOpen Banking

Bowles, Paul, Keely Dempsey, and Trevor Shaw. 2010. Fringe Financial Institutions, the Institutions, Financial Fringe 2010. Shaw. Trevor and Dempsey, Keely Paul, Bowles, Opening

Remarks from Jerry Buckland, PhD to the Standing Committee on Banking Trade

- 18 regulated and standardized standardized and regulated

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to financial data and customers. This is is system financial This a in customers. particularly essential, and data financial to innovation FinTech to barriers the of one down breaks banking Open literacy. and fees transaction and leads to better customer service, lower costs which transparency, and choice consumer improves system FinTech robust a Having models new business sparking also is banking open However, services. financial pa or friction customer were are FinTechs Many access to with morepeople provide and considered never have lenders traditional that factors include can FinTechs techn data financial of view broader a taking By rate. interest higher a owners people many view on how to assess risk, which meant Historically, lending. tradi is example Another administration. assetsunder in billion fastest Canada to advising wealthy. Questrade the has on focused which been historically advice, investment insightful e less and easier it make income only certain a once bracket. in were people to FinTech available by that provided indicating services’, call FinTech the ‘democratization of financial w a to services to work together and deliver better financial 19 FinanceInnovation Lab, 2018 18

Questrade( ale, ; acc, ; tls K, reig Oe Bnig n Fnnil elh The Health, Financial and Banking Open Briefing: K., Styles, A; Laycock, N; Marloes, inl edr hv hd restrictive a had have lenders tional ology required to to required ology anhd ih h itn t remove to intent the with launched - https://www.quest , rwn oln broker online growing

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17

FDATA North America open sidelined 20 and requirements regulatory of burden do they because cost lower a at services can they downward N opportunity. threat greatest bank’s approach percent, on how banks depending erode ha banking Open For banks will which barriers regulatory improve access to talent and capital removing and investment. FinTech systems financial across duplication including certainty, concerns, essential. is Regulatory capital venture and talent to access Ensuring ecosystem. and FinTech strong data one to just is customers access enabling However, of number small by controlled is which Canada’s, like Opportunities inOpen Banking

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AccentureSurvey Banking (2017) Open

to smaller bank smaller to to as services tool management identity or FinTechs, such check credit parties consumer other to specialized own services their sell can Banks new way intuitive and recommend a in services and products proactively and desir and goals of understanding deeper a gain can Banks members curating these services on behalf of their FinTech of ‘marketplace’ a establish can Banks ain proprietary products ain hi customers’ their systems. partners and charge a fee for for fee a charge and partners

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FDATA North America remainprotected. parties all ensure govern participant to regulators enables banking Open and intelligence analytics predictive artificial automation, to innovation effectiveness improve and technology to However, leverage barriers innovation. have regulators and removing financial investment while fragmented a system oversee to way banking becomes ‘unbundled As demands. customer changing Like banks, regulators must For a by user financial end the to directly presented Starbucks or Uber under buried is processing transaction fate; this of a Payments relationship. party third back a becoming risk advantage strategic trusted key a as is which role advisors, financial a enjoy currently Banks c technology in to engage the developer willing be must banks speed, embrace several combining by development bank challenger ar banks benefit One partners. would FinTech in investment greater even spark would approach this Canada, In Opportunities inOpen Banking r egula third party third hr party third

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intelligence and predictive analytics predictive and intelligence effectiveness improve through to innovation by Regulators service customer leveraginginsights data better deliver and solutions building proprietary of maintaining burden the without bro a model to generate new revenue, provide Banks their finances understand innovators and manage spend, and revolutionize how people and businesses FinTechs wheremoney their they spend need into insight better gain management and financial and flow cash improve operations, financial streamline Businesses health financial improved prices lower at products financial pers service, Consumers banking fromopen benefit will industry services financial the in stakeholders All customer improve to choice and service,satisfaction designed is it businesses and individuals choi customer Empowering enabling banking open and hallmarks the are innovation industry protection customer customer Empowering s ader

by CHAPTER 2:CHAPTER SUMMARY will reimagine their business business their reimagine will

to

understanding how, when and and when how, understanding suite of products and services and products of suite

ols like automation, artificial artificial automation, like ols

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19

FDATA North America incremental an by approach. forfeited scale of efficiencies realize and benefit consumer greater deliver difference are there but banking, open of scope the within included been both have data transaction and Customer in discussed As t statements to bank receipts and with filled shoebox basic, most its At accountants. Many step critical first, The effective open banking ecosystem. next Ensuring banking. data their to right legal customer’s the of Assertion Chapter3: Consent &Consumer Protection Opportunities inOpen Banking (3) (2) (1)

aggregation of standardised, cleansed orreformatted cleansed data standardised, aggregationof custom a Value interest earned orcharged. and historical) data Transaction information, data Customer . Designing a liability model that protects consumers is foundational to an an to foundational is consumers protects that model liability a Designing .

Canadians Canadians currently take paper statements and financial information to their advisers and -

added added customer data

r icuig credit including er, Chapter One Chapter

financial history and payee and history financial

s between jurisdictions. jurisdictions. between s

clear, understan clear, to open banking open to provided directly to a bank, including contact or employment employment or contact including bank, a to directly provided icuig payments, including , , thereare three data: types of open banking banking open

that that banks or other data holders generate to gain insights about

crs vrfcto o icm ad se vlain or valuation, asset and income of verification scores,

is the assertion of the customer’s legal right to to right legal customer’s the of assertion the is

dable and revoca and dable

lists for bill payme bill for lists A ihrwl, rnfr, aacs (real balances transfers, withdrawals, allow

system that is more inclusive at the outset outset the at inclusive more is that system s

heir service pro customers to digitize the act of bringing a bringing of act the digitize to customers

ble consent to share data is the is data share to consent ble is the first critical step to open open to step critical first the is

nts. across customeracross accounts.

viders. viders.

their data. data. their - time and and time

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20

FDATA North America and consent: understandable clear and establishing wrong. regulated goes fully if something whole are consumers keep to providers mechanisms recourse establishing ensuring by consumers properly, Executed r the if bank; their with signed originally consumer the conditions and access provider other wrong. goes something if customer conse data with service providers C that are plainly understood so servi any require must banking open protected, are owners business step, next The Clear types. account now The UK public. the to are available that widely products those for conduct of dat transaction that T sets should also be considered outside the scope of open banking. commercial or customer the likely would considered engi reverse Value Opportunities inOpen Banking ecourse to ensure the consumer is protected. protected. is ecourseensure consumer the to he Australian government, in its onsumers onsumers and small businesses are already s • • • • third party third ce provider to obtain explicit consent by using disclosures disclosures using by consent explicit obtain to provider ce

considering considering - nt de csoe data customer added &

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understandable consent banking banking business as defined in its Banking Act, but only outside the scope the outside

re are no clear regulatory provisions that pro that provisions regulatory clear no are re represent a transfer of value from the data the from value of transfer a represent neered (or a FinTech) a (or

consent

agreements. For similar reasons, aggregated data data aggregated reasons, similar For agreements. experiences a security breach, there may not be not may there breach, security a experiences

n expansion an - out pn banking open sol icue rdcs eae t the to related products include should a to to a bank accou bank a to

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22

FDATA North America banking open include structureshould effective for model liability the of structure basic the design to the from Starting may have access Many therecustodianship: are of certainties two perspective, data financial than a from example, rather certainties, m the of possibilities it architects, whole. customers make wrong and goes something if responsible is party which mo liability the Fundamentally, t model, rather than trying to address it late in liability the from build participants substantially if easier is framework regulatory the and standards technology the well establishing buil stable, be a the is which orch model on liability foundation effective fair, A Designing a liability model Opportunities inOpen Banking he process. (2) (1) estrated open banking ecosystem banking open estrated (2) (1)

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the adequacy of the points above points the of adequacy the and Mechanisms audit insurance Adequate security testing penetration Ongoing exp internal Appropriate systems Securearchitecture and making fraudulent claims. fraudulent making banking participants from customers open regulated protect to system A FinTech, or any other technology technology other any or FinTech, odels odels and are often not regulated in has suitable capabilities to protect to capabilities suitable has if the if i s critical to an effective open open effective an to critical

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23

FDATA North America Opportunities inOpen Banking • • • • • •

The basic structure of the structure of basic The establish to Thereare key four principles goes wrong something if whole consumers appro are providers Executed properly, consumer the agentthe of Banks must respect the consent provided by the consumer that allows a FinTech to act as customers so understood are that plainly disclosures using obtain to provider service any require must banking open protected, step, next The accounts. share and use access, f The o o o 8. 7. 6. 5. o o o o

irst, critical step step critical irst,

fraudulent claims fraudulent cost and A system to protect authorized open banking liability participants from customers making allocate to methodology between firms reasonable and fair accurate, An loss a suffer fault no through if, whole customer the make to method A regulation. the party No financial institution should restrict a consumer’s ability to share dat seeking parties consent All revoke servicea time any at (and data) their using access to of Consumers should be able to explicit. and affirmative be must Consent th hold will Who opt to How terms); permitted(defined access is long How share (and to they are data What consenting

providers consent - open open banking

out, and out, priately regulated and that there are recourse mechanisms mechanisms recourse are there that and regulated priately

to open banking open to their data their

, is crucial. To ensure To crucial. is , absent a clear and objective risk factor risk objective and clear a absent e records (and for for erecords (and liability model for effective open banking ensures there is: banking effective for open model liability CHAPTER THREE: SUMMARY THREE: CHAPTER

held by the financial institutions with whom they have they whom with institutions financial the by held mitigates mitigates risks and protects consumers by should be appropriately regulated appropriately be should

amend amend their consent, including

is the assertion of the customer’s legal right legal customer’s the of assertion the is ing clear and understandable consent: understandable clear and ing what duration what

consumers and small and consumers

how it will be accessed);be will it how

)

are

completely aware completely of: –

which should be part of of part be should which

the right business owners are owners business

of their own, they own, their of explicit consent by consent explicit ensuring ensuring that to to

a with

‘opt to to make third third -

out’ out’

to to

24

FDATA North America considerations: of absence the In platform banking ‘ online their for credentials called process a through is data access accountan every of relief the We Today’s data sharing practices and acceptable efficient, more processes these made accessible. merely have technology and data in is the modern equivalent of processes that have existed in financial services for years The has the potential to modern the is banking Open Chapter 4: Data, Technology & Opportunities inOpen Banking impersonate

• •

have underlying underlying need to share financial data has existed for generations. Ultimately,

(or if the service provider makes a mistake). It may also compromise fraud protection. servicethe fraud compromise makes if provider may(or It mistake). a also a credentials the if liable being customer in result credentials login providing by conditions and terms the Violating accounts customer of andconditions terms the violate may scraping Screen sever with relationships third of variety a use consumers most since account the to and there is no comprehensive list accounts. time than rather credentials, login provide Customers does scraping Screen

moved on on moved

’

the user to extract the desired data. extract userthe data. to desired the

The The most common way to revoke this access is to change the account password, other from

transform transform option printouts of transaction data and shoeboxes stuffed with receipts, to to receipts, with stuffed shoeboxes and data transaction of printouts

n t. t. o s al financial institutions. financial al , screen scraping scraping screen , Today, the most frequent way FinTechs and other third other and FinTechs way frequent most the Today, t allow customers to control the scope and duration of access access of andduration scope the tocontrol t allowcustomers - day process of sharing of process day

how we manage ourhow we manage financials, for the better. screen available available to consumers

Open Banking

scraping

has has and and

been

then then . The FinTech records a customer’s login login customer’s a records FinTech The re leaked or stolen from the provider provider the from stolen or leaked re

effe

use paper statements; however, it however, statements; paper ctive. However, there are several are there However, ctive. -

s or permission or of of which providers have access

- thes

party tools and have banking banking have and tools party dtis o log to details e

to a to - bound access to to access bound third party third

open open banking

–

advance

-

in and and in parties parties

may

s

25

FDATA North America Interface Program Application The next evolution of data sharing will utilize Next generation erode value consumer which innovation stifle efficiency, eradicate Long leveragenegotiate). to the (nor contracts those into visibility much FinTechs. various in’ ‘plug with that services aggregation sign banks for typically are FinTechs rely on ba open jurisdictions of absence scraping screen to addition In reliabl operating event fall a of provision the APIs for environment banking open provide to the process covered account types over a period the for scraping screen balance of sunsetting appropriately all across jurisdictions regulators that will recommended APIs to migrating standards, banking open of absence the and scraping screen of proliferation the Given Opportunities inOpen Banking • -

term, bilateral agreements threaten to to threaten agreements bilateral term, re to invest in substantial repair work to may FinTechs break, or could change password. could consumer their the change systems or change, banking online that risk the to exposed are FinTechs resource intensiveFinTechs for be can scraping Screen h oe banking open the - accessaccount the oee, iTcs do FinTechs However,

consumers does does not hinder the urgent need ,

f

inancial institutions and and institutions inancial , y. bilateral bilateral agreements

and drive up costs costs up drive and -

profit agreements that that agreements profit hl pretn the perfecting while of data sharing . It will It .

FinTechs, or with with or FinTechs, restrict

ih t with - ak pin n the in option back nki tak

. This will ensure

ng), also also . .

APIs are not not are APIs tm. It time. e

he

competition s

ad n the in (and

provide for provide benefits of of benefits

(API n some in not If things things If

– . These s

) all of of all have have

–

i a s - ,

related to screen relatedto scraping: APIs users. its of location geo proprietary soluti own their maintain and build provides map functionality without having to which API, Maps Google use services Many to uses Uber example, For fun In layman’s terms, over Internetthe remotea application communicate in an easy and secure way with interact. APIs sh components software different how for tools and buildin protocols routines, of set

rcs cei cr payments card credit process ctionality and data from one another. another. fromone data and ctionality - • • • location APIs on phones phones on APIs location

on effectively mitigate the challenges challenges the mitigate effectively g software applications that specify specify that applications software g FinTechs get FinTechs protect consumer standards R permissions limited time others and FinTechs grant can Consumers time spent reactively fixing reactively timespent fixing data financial to access ; on the flip side, Google Maps uses uses Maps Google side, flip the on ; egulators can can egulators allow allow a software application to

with liability provisions liability with APIs allow apps to borrow

more stable, consistent consistent stable, more - bound access with with access bound establish an API from API an ion

to to , with less less with ,

tra access technical technical securely

k the ck PayPal .

ould

for

.

26

FDATA North America across learning facilitating include: benefits the jurisdictions, to perspective. addition implementation an and technology a both from standards, technical estab in value tremendous is There Standardizing technical requirements newproducts API Open lines. service or products specialized efficiency. third operational Partner enhancing and the within used are APIs. of types three are There Opportunities inOpen Banking s are accessible by developers to build build to developers by accessible are s • •

party on connecting service connecting on based FinTechs and banks selecting of burden customer the Eliminating customers their serviceall to complete a offer can providers other and certain creating risks reducing by participants market all and customers Protecting APIs

are between a bank and specific .

partners,

bank ty that FinTechs and and FinTechs that ty often to enable enable to often , reducing friction friction reducing ,

Private

lishing APIs

In In

• • • • • • •

the development process development the simplifying and consistency creating by innovation to barriers Reducing of progresses) process standard market the adjusting providing simplifying (and by compliance for guidelines consistent clarity Creating assess to riskinsurers enabl and model liability trace loss to ability breaches the Simplifying participate to firms smaller for easier it Making up resources inplumbing rat innovation, customer facing in investment Enabling requirements audit and testing meet to efficient more cos security Reducing costs maintenance and operational building, Reducing m , ak , ing

assess fault and allocate allocate and fault assess

t air o sals a establish to easier it

ts by making it it making by ts her than tying tying than her threats

ing a time as s

cyber cyber - 27

FDATA North America and regulators objectives both marketparticipants for overarching clarity creates and principles required participants technical flexibil be assert to to needs place There requirements. great a not is action of course best the that reason to stands establis it held, tightly so overs effective providing of capable environment and entity implementation an both without possible not is Standardization Opportunities inOpen Banking • • • • •

ight. ight. ity agreements) bilateral and scraping screen (over data sharing of method preferred a as environment standards technical establishing in value tremendous is There erodevalue consumer inn stifle competition, B access with good control for security and operational risk; however, there are limitations: practi when scraping, Screen log to these use details then platform, banking online their for credentials record to customer’s a login FinTech a thro shared primarily is data Today, accessible and processes more acceptable efficient, services years for financial Ult ig ehia sadrs ol be would standards technical hing . ilateral agreements lack visibility and threaten to eradicatethreaten efficiency,restrictto marketand agreements ilateral visibility lack

for regulators and and regulators for Establishing a clear statement of of statement clear a Establishing imately, open banking is the is banking imately,open

o o o Because the Canadian market is is market Canadian the Because

to solve problems and and problems solve to

Screen scraping can be resourcebe can Screenscraping customeraccounts m Screenscraping access does Screenscraping .

.

Of course, the course, Of ovation, reduce competit ovation,

open banking banking open a ay

regulatory C – at financial institutions financial at

adjust HAPTER -

be perceivedbe to advances in data and technology have merely technology made these and data in advances in on behalf of the user to extract userthe data to desired the of behalf on in not ced by responsible parti responsible by ced enough modern equivalent of processes that have existed in in have existed processes that of equivalent modern

allow customers to control the scope and duration of of duration and scope the control customers to allow law law

as as

ugh screen scraping and screenand ugh scraping FOUR

- intensive :SUMMARY regulatoryobligations. which they are required to hold it by existing transfer data only for the same period during approach regulators have det hol on data burden excessive an put would period open An required. be may that data historical of amount the consider to need regulators data, transaction of case the In hi stores who There Managing historical data viola ion and and ion te the terms and conditions of of teconditions terms the and

m

ust also be also ust

es, is a viable mechanism for data data for mechanism viable a is es,

ders increase would oblige data holders to to holders data oblige would storical data storical .

privateAPI

In many jurisdictions, jurisdictions, many In that enable an API an enable that ermined that a pragmatic

costs costs clear standards around around standards clear

–

and for how long. long. how for and

s all of which which of all , which which ,

requires requires - - ended ended based based

and and

28

FDATA North America oversightmust: Such consumers’consent. their with parties third with shared be orcannot can data select what cannot institutions include a should parties orotherthird FinTechs between and data consumers of sharing the Facilitating privacy,and transparency, ownership, safety, data as interestssuch consumer ensuring of objectives outcomes,over with of time,aremeasuring that aligned consistent a provide also can entity re mind, experiencein squarely empoweredconsumer the is to, with which securitymeasures and market for participants, and standardization, perspectives offertheir regarding can policies, stakeholders all which activities appropriate an that UKbenefits fromthe the show lessons banking, open implementing to approaches have taken different countries different While t with parties third with shared be cannot between data of market sharing the entering the Facilitating activities. such and consumers support to investment including appropriate An value for consumers substantial add will banking open Ultimately, considerations. regulatory and policy arejourney, therebanking open its on embarksmarket Canadian the As Chapter 5: Effective Policy &Oversight 4. 3. 2. 1.

measurescyber mitigate to security threats Ensure f the regulations Ensure Ensure E nsure consumers are the owners of their data are their consumers nsure ownersthe of . ppropriate oversight for fintechs entering the market and assurances that financial financial enteringmarket the that assurances fintechs and oversightfor ppropriate

The introduction of an implementation en implementation an of introduction The

inancial system inancial

regulator financial system stability. system stability. financial

adherence to Canadian electronic privacy law, as well as standards and additional clear consent agreements and the ability to revoke to consent agreementssuch clearability the consent and FinTechs or other or FinTechs pn banking open and assurances and y oversight and standardization, including investment to support such such support to investment including standardization, yoversightand –

but only

are prop are

solve areas of disagreement among different stakeholders. This This stakeholders. areasdisagreement solve different of among rmwr require framework third parties third

ortional to the risk the risk the to ortional if if

that regulated effectively. regulated

heir consum

financia

open banking framework banking receives open from should l institution l

s tity can establish a level playing field in in field levelplaying a establish can tity

regulatory oversight and standardization, standardization, and oversight regulatory ers in

clude a clude ’

consent third party third

s cannot select what data can or can data what select cannot s ppropriate oversight for fintechs fintechs for oversight ppropriate . Such oversightmust Such .

poses to consumers and and consumers to poses

several :

key 29

FDATA North America • • • • that: steps taking Canada’s federal government

financial system stability financial inte consumer ensuring tim over outcomes, of measuring consistent Include the environmen the ben the with Canadians provide to need urgent types account covered for scraping screen of sunsetting balanced Ensure ensure oversight to Ensure th institution online their through for provide D efine the s the efine o o o

pen , where appropriate, Establish Act (“PIPEDA”) Documents Electronic and Protection Information P that rovision rovision of information on Canadian obligations such as complying with the Personal b anking APIs are not operating reliably APIs operating are anking not consumers to access through open banking any data th data any banking open through access to consumers

cope of account types that will be included in Canada’s Canada’s in included be will that types account of cope the rough othermeans rough

t for APIs for t ing eitain rcs i cer o new for clear is process registration

. Thisincludes: a federaldirectorya of

or mobile or

et sc a dt onrhp transparency ownership, data as such rests

must must play a proactive role in a new financial system framework by providing

new market entrants bank ;

ing for the provision of a fall a of provision the for

experience

r egistere

efits of of efits register with and are d pro s, or that they receive from their their from receive they that or s, e, that are aligned with objectives of of objectives with aligned are that e,

entrants viders o pen

- b back option in the event that that event the in option back anking , including an an including , at they at that does not hinder the hinder not does that open banking open ,

approved approved by an

, while while

safety, privacy and and privacy safety, are abl are also also appropriately appropriately e to access to e

perfecting regim financial financial entity entity e

to to 30

FDATA North America APIthe mo bank’s (or the website powering facing log to credentials those using then and credentials scraping Screen c and of needs banking Open customers. fo FinTechs and other financial services providers from being identi the about information (KYC): Customer Your Know Internetthe interact should over application remote a components with way secure and easy an in communicate to application software software different how specify that applications Application Glossary r money r -

laundering or other criminal activities criminal other or laundering . Program Interface (API): Interface Program

: onsent by customersby onsent

T he structured sharing of data between financial service providers, based on the on based providers, service financial between data of sharing structured he :

I b n anking, screen scraping scraping screen anking, A p A t y of of y roces . their their

A s by which banks collect, verify and continuously monitor monitor continuously and verify collect, banks which by s

set of routines, protocols and tool and protocols routines, of set utmr. h ojcie f Y i t peet banks, prevent to is KYC of objective The customers. . KYC also KYC . usually involves collecting a user’s banking banking user’s a collecting involves usually bile app) bile - in and retrieve data from a bank’s customer bank’s a from data retrieve and in used .

helps firms better understand their their understand better firms helps , intentionally intentionally or unintentionally s for building software building for s APIs . lo a allow - ,

31

FDATA North America