Overview
The concept of open banking is emerging internationally as the
potential future of the banking industry, and this trend is
beginning to gain traction in Canada as well. The idea behind open
banking is to allow the free exchange of consumer data, processes
and other information between providers of financial services. This
would include not only large financial institutions, but also
smaller players and new entrants into the market. Consumers would
have the ability to opt-in to open banking initiatives by
authorizing their financial service providers to share their
consumer data with third parties through digital channels.
In practice, open banking not only allows financial service
providers to read and use the consumer data, but may extend to
other applications such as the ability to initiate certain actions,
on a customer’s behalf (i.e. making payments), or to allow
for portability between providers.1
