The Ministry of Finance estimates that one in four Canadians uses an app to manage their personal finances. Through a screenshot, these applications download a consumer’s financial data. Since all financial institutions allow their customers to upload their personal information, the consumer can monitor the development of his entire financial situation, even if he relies on several different financial service providers. However, the screenshot requires you to provide your username and password every time you want to update your financial information, potentially opening the door to fraud.

Open Banking allows you to share your banking details with the fintech companies of your choice. This is done through secure online services, whether using your computer, mobile phone or tablet.

When you use a financial app with Open Banking, your bank securely shares your financial information with that app on your behalf. You are not required to provide your online banking ID and password to access the App’s products and services. This protects you in the event of an unauthorized transaction, data leak or fraud. Your personal financial information is always up to date when you participate in an open financial system.

Desirable as the Finance Minister’s initiative is, it is incomplete because it excludes savings and credit unions, insurers, stock brokers and all other financial institutions. These institutions already allow their customers to upload their financial data to an application of their choice using the screenshot with username and password. Canadians need an open financial system, not an open banking system. All financial institutions based in the country should be able to participate, as many of their customers have expressed their interest by already using an application to manage their entire financial portfolio.

The management of an open financial system cannot be entrusted to one government agency if we want the participation of all Canadian financial institutions. Why not take inspiration from the example of the United Kingdom, which has entrusted the management of its open financial system to private companies? The board should consist of representatives from all participating financial institutions, without giving control to any particular group. A model would be the Interac system, which works very well and has been able to adapt to the evolution of technology and the needs of consumers since its launch.

I welcome the Canadian Finance Minister’s initiative. However, I hope she will quickly consult provincial finance ministers to reach a consensus that will allow Canadians to benefit from an open financial system as quickly as possible.