Open banking to launch in Canada

Introduction

Open banking has been given the long-awaited tick of approval in Canada, after experiencing a year of delays. However, the recommendation from the advisory committee to the Canadian government to implement the initial phase of open banking will become a reality by 2023. The announcement has been warmly welcomed by banks, credit unions, and fintech companies. Open banking could not come soon enough for the four million Canadians who are sharing their financial data through screen-scraping to gain access to innovative financial services.

Due to the ongoing discussion surrounding open banking, Backbase Canada offered thought leadership to explain how it could drive a more inclusive financial marketplace for all Canadians at the Digital Marketing Financial Services conference (DMFS). The DMFS was attended by senior executives in digital transformation, innovation, and technology across all the major banks and credit unions.

Randy Johal, our Customer Strategy Officer at Backbase Canada, observes that the vast majority – around 90% – of online banking experiences still offer the same types of accounts and haven’t updated their tools in years. Which is why customers are now demanding better.

That’s where Backbase comes in: integrating applications to provide faster payments, and with better visibility of balances, which allows the customer control of their finances. This move towards a more engaging and seamless experience could be the catalyst for further innovation within financial institutions.

In order to achieve this, the conversation around open banking needs to shift its focus from technology stacks and how we will build a platform to support a holistic view of the customer. In the words of Sam Vassa, CEO PaymentEvolution – a cloud-based payroll provider in Ontario, “the solution lies with insourcing young talent and outsourcing tech.”

The first phase of open banking is limited to low risk, read-only activities such as allowing third-party service providers to receive consumer financial data, but not edit the data on the bank’s servers. However, this allows a unique opportunity for financial institutions to develop their own customer experience, often called ‘mashups’. An example of a mashup is UberEats, because the platform orchestrates value with the customer, which is at the forefront of the experience. They do this by seamlessly integrating restaurants and drivers to provide a delightful experience from the oven to your door.

During the DMFS conference, Randy asked the audience to think about what their mashups could be and presented ideas. Most of the mashups had an ability to inform and educate the customer at a critical life stage or event, while also offering a financial and social impact on the community they live in.

During this important time for Canadian financial institutions, Backbase Canada continues to build a strong profile. Moving forward, Backbase encourages all banks to accelerate their digital transformation agenda to focus on the customer experience. Our one platform vision – connecting third parties and orchestrating value – is key to enabling clients to create a truly engaging digital experience. In turn, it will drive financial institutions market differentiation in an increasingly competitive landscape.