Open Banking Implementation
Date: March 2nd, 2023 | Toronto, Canada
Length: 45 Minutes
Speakers:
Introduction:
Very few banks and financial institutions in Canada can claim to have an open banking system. Over 65% do not yet have an open data strategy in place. Open banking has been a hot topic for many years due to its benefits but financial institutions are yet to acknowledge them and take action. What was once seen as a threat to their market position is increasingly being viewed as an unprecedented commercial opportunity.
Open banking can open a variety of new channels for financial institutions to be financially viable during this economic crisis. The adoption of Open Banking in Canada is expected to generate an additional $6 billion in revenue by 2023.
Watch this 45-minute panel to understand what are the latest regulations and the current framework of Open Banking in Canada. As well as to understand how by integrating with third-party providers through APIs, your company can offer services such as personal finance management, account aggregation, payment initiation, and much more. Thus allowing you to offer better and more comprehensive financial services to your customers, all from a single place.
Key Takeaways:
- As the open banking steering committee and working groups continue their groundwork to create an open banking framework in Canada, the larger financial services community is already implementing processes to integrate open banking for businesses and ultimately for consumers.
- Although many were hoping for the launch of the first phase of open banking in January 2023, as initially promised in the final report of the advisory committee on open banking, now Canadian FIs expect the first phase to be launched later this year.
- In addition to the open banking steering committee, other groups are also working to advance Canada’s open banking framework. One such group is the CIO Strategy Council. In November 2022, the council published its national standard for consumer-directed finance. The standard includes provisions on design and experience principles, authentication, authorization, consent, and data portability.
- With an Open Culture and an Open Mindset, IT leaders will be able to enable the true implementation of Open Banking through technology.
- Open Banking is already being implemented by the big banks but they are doing it internally, that’s why the financial services industry needed the government to create the standards that will push everyone to share information. Banks believe that the information belongs to them, but it’s really the customers who own it.
- The main challenges to the implementation of Open Banking in Canada are process, competition, and security.
- Non-bank companies have the opportunity to not only connect with banks, but also with other industries in which their customers are engaged, so they can offer them better services. They don’t need to compete, they need to partner.
- For companies operating in Canada and the USA, a different strategy must be implemented as there are two different regulatory frameworks and two different segments of customers.
- The value FIs can get from sharing data is greater than keeping it private. The value exists, the customer has the appetite, and the industry just needs to make it a priority,
- If you wait for regulations you will be left behind the 8 ball when they come, start today, by listening to your customer, and solving their needs.
- Financial institutions that adopt Open Banking can see a 20-30% increase in revenue, a 10-15% reduction in costs, and a 15-20% increase in customer satisfaction. These figures highlight the tangible benefits of Open Banking, making it a smart investment for any Canadian financial institution looking to grow and stay competitive in today’s market.
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