The government of Canada to weigh the risks and benefits of open banking system

Finally it seems the usually conservative Canadian government is inclined into a review of the advantages of incorporating an open banking system allowing users to have their financial information shared.

The Finance department broke the silence and came in the open air six months after giving a lead that expressed its willingness to go by the footsteps of the United Kingdom in embracing an open banking system.

The government speculated that this new way of handling banking transactions would assist service providers to strive for enhanced competence. This has an additional advantage of empowering consumers by enabling them to have more control over their money by increasing accessibility and operability of their financial assets.

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It was refreshing to notice that the government recognizes the negative issues that come with embracing open banking systems. It acknowledged the threat to consumer’s privacy and financial stability which led to an assurance of keeping the system as secure as possible for the best possible consumer experience.

A good example is the expected wave of concerns that came out of the Canadian Bankers Association regarding the vulnerabilities related to privacy and financial stability. It was clear that the association was eager to have answers towards how contagion and reputational issues associated with third parties access could be addressed.

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Much as there is this perpetual concern from the association, it seems there is an overall positive attitude relating to the relatively new trend. The association has expressed the willingness to team up with the government on overcoming the risks associated with embracing the open banking system.

The Canadian government has so far made its commitment to guard against the risks by making it clear in the budget that it is bound to incorporate some changes in its legislature to ensure that retail payments are kept in check. Additionally, it seems the Canadian government is also inclined to orchestrate a review of the Canadian payments act aimed at making sure that payments Canada is able to provide oversight of its systems in a soundly manner.

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