https://finledger.com/2021/08/09/canada-sets-open-banking-target-for-2023/ Skip to content FinLedger-Logo_final * Twitter * LinkedIn * Newsletters * [ ] open search bar close search bar * open menu [ ] search site * FinLedger Mini-Con * BankTech * Proptech * InsurTech * Payments * Dealmaking Newsletters BankTechFintech Canada calls screen scraping 'unsecure,' sets Open Banking target for 2023 August 9, 2021, 11:09 am By Joe Burns Share On * Click to share on Twitter (Opens in new window) * Click to share on Facebook (Opens in new window) * Click to share on LinkedIn (Opens in new window) * Click to email this to a friend (Opens in new window) * Canada's Advisory Committee on Open Banking has handed in its three year investigation on the country's potential for open banking, setting a tentative opening phase date of January 2023, according to a press release. The report, submitted to Deputy Prime Minister and Minister of Finance Chrystia Freeland last week, states that while four million Canadians currently access open banking services, the screen scraping-based services are currently "unsecure, inefficient, unregulated, and an unreliable method of data sharing." "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," Freeland said, following the report. As a result, the committee stated that the country's open banking must be broad enough to provide useful, competitive and consumer-friendly financial services to citizens and include government and industry collaboration to create a roadmap for the country. The committee also set a tentative data for the plan's initial phase, stating a system including common rules, accreditation framework and technical specifications should be ready by January 2023. The plan also suggested the government appoints an open banking lead, with the hope that it would bring industry players together to further the plan's development. "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," Freeland stated in the release. The Advisory Committee on Open Banking was created in 2018 in response to the growth of fintech services and in an effort to strengthen and modernize the country's financial services. The final report includes information from two-phases of consultation with stakeholders, subject matter experts, public opinion research and review of existing international open banking. As stated in the release, while a sizable number of Canadian's currently use open banking-style services, these platforms rely on screen scraping technology to aggregate data and are not seen as secure or reliable. These weaknesses are highlighted by API-based connected banking platform Plaid's recent class action lawsuit. The lawsuit, which settled today for $58 million, found that the fintech powerhouse used consumers' banking login credentials to gather and distribute financial data without prior consent. Nearly 98 million people were affected, according to the settlement, showing the extent of API usage and the nonsecure, less-than-legal processes that the Canadian government is hoping to eliminate by developing its own framework. A large number of open banking platforms and technology has been developed and adopted in recent years, with large amounts of resources being devoted to the issue in both the private and public sectors. A recent report by Allied Market Research found the global open banking market is projected to reach $43.15 billion by 2026, six-fold the $7.3 billion it was valued in 2018. As open banking frameworks are adopted by countries around the globe, led by the UK, EU, and Brazil, a number of groundbreaking deals continue to be announced. Visa's $2 billion acquisition of Tink is the most prominent, but funding rounds like Yapily's recent $51 million Series B and Zeller's A$50 million Series A show the rising speed and value of open banking worldwide. 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