As consumers gain access to more digital financial services, the Canadian government is taking steps to establish regulations and standards to protect data privacy and security in the new era of consumer-driven finance.ISTOCK.COM
The federal government has taken another step towards establishing Canada’s open banking system, selecting an experienced fintech leader to lead development of a “made-in-Canada” regime.
The Department of Finance Canada has named Abraham Tachjian the open banking lead. Mr. Tachjian has extensive experience related to open banking in Canada and internationally, as well as expertise in digital banking and law.
In his role as director of digital banking at PwC Canada, Mr. Tachjian supported the work of the federal Advisory Committee on Open Banking. Before joining PwC, he helped found Mox Bank, a new digital bank in Hong Kong, and was director of digital banking at Standard Chartered Bank in Singapore, where he was responsible for the implementation of emerging technologies.
In this new position, Mr. Tachjian’s mandate is to engage with industry, regulators and consumer representatives to design and implement key pillars of Canada’s open banking system, based on the recommendations in the final report of the committee.
Open banking enables consumers and small businesses to share their financial data with a broader range of financial service providers through secure online channels, in order to access innovative, consumer-centric financial services.
Modernizing the financial services sector in wake of technology transformation
The federal government announced creation of the Advisory Committee on Open Banking in 2018. Its task was to review the merits of open banking for Canada, in response to the growth of financial technology services and the impetus to strengthen and modernize the Canadian financial services sector at a time of rapid digital transformation.
According to the government, the goal is to help the Canadian financial sector keep pace with the needs and expectations of consumers in the digital economy, while preserving the strengths of Canada’s banking system, which it describes as “recognized and admired around the world.”
Following consultations with a broad array of stakeholders, the committee released its final report on August 4, 2021. The report noted that more than four million Canadians were already accessing open-banking-style services, such as personal budget planners, robo-advisors and non-traditional lending. However, while surging technology advances have made these new services available, regulations and standards for protecting data privacy and ensuring Canadians have control over their own data have yet to be fully developed.
Consumer-driven finance, or open banking, is already part of Canadians’ lives. Many use digital services every day to manage their money, to budget for expenses, and to make investments.
— Chrystia Freeland, Deputy Prime Minister and Minister of Finance
The committee found that while some data sharing is already happening, the development of more secure infrastructure to use and move financial data would establish better protection for consumers and support other initiatives to strengthen data protection, such as Canada’s Digital Charter, consumer protection standards in the financial sector and cybersecurity.
“Consumer-driven finance, or open banking, is already part of Canadians’ lives. Many use digital services every day to manage their money, to budget for expenses, and to make investments,” Deputy Prime Minister and Minister of Finance Chrystia Freeland said at the time of the final report’s release. “Working towards a regulated, made-in-Canada system will make sure that we continue to enjoy a strong, stable, and innovative financial sector that is globally competitive, promotes consumer choice, prioritizes data privacy, and contributes to economic growth.”
As the open banking lead, Mr. Tachjian will engage stakeholders to develop an accreditation framework, a common set of rules and technical standards for an open banking system. He will also provide advice to the government for the future ongoing administration of Canada’s system of open banking.
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