Voice of the Industry

Open Banking in Canada: consumer awareness must be at the forefront

Thursday 27 January 2022 09:07 CET | Editor: Alin Popa | Voice of the industry

Open Banking is about to reshape Canada’s financial services landscape. Before we reap its many benefits, it is up to us to help consumers and businesses get comfortable with this new industry shift

The Canadian government finally carved out a path ahead last year. In 2023 we will usher in the start of an Open Banking environment. And while many in the finance industry have had the benefits of Open Banking swirling in their minds for quite some time, compared to the rest of the world, the concept is new for North Americans. And that is why in 2022, education needs to be at the core of the discussion. Our role must be to help consumers and businesses navigate this new world. Canadians need to understand the concepts and the benefits. And only then will we ensure the success of this new financial ecosystem.

These last two years of the pandemic have launched us straight into a digital transformation stratosphere. We saw changes in consumer and business behaviours that would have taken months, if not years, happen overnight. The abrupt and immediate need for contactless transactions set the stage for a payment revolution in Canada. With Open Banking at the helm, it is up to us in the industry to lead the charge. Executed successfully, Open Banking brings equality to the industry. We can expect to see a realignment of the financial landscape and improvement in the lives of Canadians. Micro, small, and medium-sized businesses can expect to reap the most benefits.


What to watch for in 2022 

January 2023 will see Canada operationalize the Open Banking system. The lead-up should be where the most significant strides happen, where a foundation is set. Until now, Canada and the US have been slow on the uptake of Open Finance. Steve Boms (Executive Director, FData) said it best, ‘Canada has sat on the bench and watched as many of the world’s largest economies raced toward implementing a well-regulated, modern Open Finance regime.’

Now it is Canada’s turn. Armed with an ability to learn from those that have come before. Shift the thinking. Consumer education will be a pivotal force. In 2022, banks, fintechs, government, and industry players can set the path. Leading forward with trust, transparency, and ease. We need to provide the tools to consumers to become financially savvy. Basing Open Banking on the customer journey puts Canadians in the driver's seat when it comes to their money and data. 

The innovations we see in the payments industry put the customer first. Plaid's Albert Malikov says, ‘Open Banking payments revolution is beginning, expect adoption to grow and penetrate new segments.’

Canada’s Open Banking Vision 

Open Banking done right will improve the economic outcomes across the country. Consumers will access financial services in a secure, efficient, and consumer-centric fashion for the first time.

When Canadian consumers gain more control of their data, innovation will flourish across industries, and financial inclusion will become a reality. An estimated 10% to 20% of Canadians are either unbanked or underbanked. We improve upon what already exists with the ability to offer new and tailored services. We expand the potential to serve those our current system fails.

The determined key outcomes place Canada on the right track.

  • Consumers’ data must be protected.

  • Consumers hold the control when it comes to their data.

  • Consumers have the ability and can rely on access to a range of valuable and consumer-friendly financial services.

  • Consumers have recourse when issues arise.

  • Consumers benefit from consistent consumer protection and market conduct standard.

  • Financial inclusion should be considered in the design of an Open Banking system.

Open Banking Benefits All

We are simply at the precipice. More than four million Canadians are already accessing Open Banking-style services. The myriad Open Banking benefits run wide, and the potential is unlimited. 

Running a business is about to become less complicated. Improved platform applications will streamline accounting processes. From onboarding to reconciliation, companies will save on time and money. Expect significant transformation in the lending industry. Across the board, faster decisions on loans, auto financing and mortgages will get money into the hands of those that need it when they need it. This, in turn, can deliver a continuous boost to keeping the Canadian economy moving. 

Open benefits for consumers:

  • Enhanced Knowledge - Increased financial literacy across generations.

  • Customer experience - Providers can make transactions easier and deliver data-driven financial insight. 

  • Convenience - More convenient ways to help manage multiple financial accounts and services.

  • Personalization - Consumers can receive tailored or targeted offers based on their needs.

  • Accessibility - The ability to access financial services consumers may not have otherwise had. 

Open Banking benefits for enterprises
  • Multi Banking – Faster decision-making allows businesses to protect their finances.

  • Everything under one roof – Access to account information in one place delivers a holistic view of the consumer’s financial state.

  • Risk assessment – Assessing risk and providing credit becomes faster and more precise. Quick and seamless consented access to vital financial data is a game-changer.

  • Personalization – Tailored offers based on actionable reports. The data around income, recurring expenses, balances, and subscriptions means targeted advice.

  • KYC – The power of connectivity and access to relevant data allows TPPs to confirm their customers’ identities. No more asking an endless amount of questions during onboarding.

  • Save time and frustration –  Safe and seamless digital services reduce the red tape.

Recognized worldwide for its ability to uphold financial safety and stability, Canada has an excellent opportunity to ensure a system that delivers ultimate value to customers. By incorporating the objectives of Open Banking into the financial services landscape alongside government and industry collaboration, Canada can achieve the desired balance of innovation and competition while preserving the system's resilience. 

About Hamed Arbabi

CEO and Founder of VoPay, Hamed Arbabi has successfully built multiple startups and leveraged his knowledge of business expansion to develop them into successful, disruptive organisations. With over 15 years of executive-level experience in spearheading comprehensive strategies and business developments, Hamed has a proven track record of the global payment industry.


About VoPay

VoPay’s Payment-as-a-Service platform is revolutionising the future of payments by creating robust payment, collection and verification solutions specifically designed for each industry. By integrating a single API, businesses can instantly connect to all major payment rails securely and leverage data-rich information for better decision making.

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Keywords: Open Banking, Open Finance, digital banking, financial inclusion, data sharing
Categories: Banking & Fintech
Countries: Canada
This article is part of category

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