Thoughts on Open Banking

2023-07-27- Andrew Escobar

Thoughts on Open Banking

With yesterday’s Cabinet shuffle now behind us, I have been thinking about open banking — what has changed, what has not, and what comes next.

1. There is no longer an Associate Minister of Finance.

When Cabinet took shape after the 2021 election, I was encouraged to see the Prime Minister appoint an Associate Minister of Finance. The government was still navigating the pandemic and economic challenges; it made sense to share this portfolio’s responsibilities. The Associate Minister was given a clear mandate to meet the government’s campaign promises:

Advance our commitments to launch a made-in-Canada model of open banking by early 2023 and to modernize Canada’s payments technology to deliver faster and lower cost options to securely and conveniently transfer funds.

In retrospect, “early 2023” was overly optimistic, but the appointment of Associate Minister Randy Boissonnault was a net benefit to open banking. He has been a vocal champion and his office has remained engaged on the file. It’s tough to have lost an Associate Minister. But it will be much more difficult if we ultimately lose the mandate…

2. There is no longer a mandate within Cabinet (for now).

The Minister of Finance’s office has not said if Minister Chrystia Freeland will take over the mandates for open banking and payment modernization. The Department of Finance Canada simply points to future mandate letters.

I wouldn’t read into that.

We’re waiting on Ministerial mandate letters for clarity. (After the last shuffle in 2021, The Prime Minister’s Office took about seven weeks to share them. Let’s hope we’re not waiting that long in 2023, but give them some time.) Open banking was a campaign promise. It should remain within the mandate of the “economic front bench” of this government.

Yes, the obvious bet would be with the Deputy Prime Minister and Minister of Finance, Chrystia Freeland. But what about the less obvious choice? I would suggest that the Minister of Innovation, Science and Industry, François-Philippe Champagne, is in an excellent position to advance the launch of open banking in 2024:

  1. The Consumer Privacy Protection Act (Bill C-27) and its data mobility framework is arguably the legislative foundation of open banking.
  2. The success of open banking requires a joint and perhaps sustained effort by Finance and ISED.
  3. ISED has the departmental experience required to spin up a fit-for-purpose governance entity that can support open banking.

One thing is clear though. If “open banking” is omitted entirely for Ministerial mandate letters, it would speak volumes.

3. There is still an Open Banking Lead.

It is easy to forget that we have a clear roadmap and that we’ve made real progress towards implementation. We now need to see that progress more concretely.

The Open Banking Lead, Abraham A. Tachjian, is due to submit a final report to the Deputy Minister of Finance. I am optimistic that it will present a clear framework for the government to adopt, and also make a strong case for government taking an active role in the system. It is my hope — and the fintech industry’s hope — that Minister Freeland will make this report public without delay.

4. There is still no open banking in Canada.

January 2023 has come and gone; so too will September 2023.

Let’s make 2023 the year we (finally) pass the Consumer Privacy Protection Act and legislate a foundation upon which to build open banking.

Let’s make (early) 2024 the year we launch secure, standardized, and inclusive open banking — and enable better financial outcomes for all Canadian.