A long-promised revolution in the banking sector is about to come to Canada. But when it comes you may not notice it.
These changes will give Canadian consumers and businesses more control over their financial data. Such as who is sharing data, known as open banking.
The federal government promised in next month’s budget to create the legal framework for the system to come to Canada.
Helen Child, founder of Open Banking Excellence, which is working on the system, says it’s like having a more inclusive, more open society.
Open banking will allow consumers to share their banking details with other institutions. The most common use is budgeting or access to money management apps and companies that allow customers to keep different bank accounts and credit cards in one place.
Other uses include easy payments, automated accounting and business finance management. One of the biggest growth areas is credit assessment. Under open banking, lenders can directly access a person’s banking data, allowing them to see more than just a credit score. Consumers can also use it to build a credit score. As a result, financial inclusion will increase, said Child. According to him, it is the democratization of data.
