Open banking could make managing your money easier. Credit: iStock/sturti

"Imagine downloading the latest app that could analyze your credit card payments and recommend ways in which you could save on interest, or an app that would seek out investment opportunities tailored specifically to your risk tolerances, income goals, and personal values," says Samantha Gale of Canadian Mortgage Brokers Association-BC. "Imagine having a full picture of where your business wasted money last year, or a recap of your best financial decisions to date. These are the kinds of innovations that open banking technology is poised to deliver."

Intrigued? Though not yet allowed in Canada, open banking may be in our future.

"Until recently, Canada's banking industry seemed like an unlikely candidate to be among the vanguard, and many were surprised when the Department of Finance recently took an important step forward by launching a public consultation on the merits of open banking," says Gale.

Open banking has many challenges, among them privacy and regulatory requirements that control the data held by banking institutions. It's currently unclear who owns a client's financial data, whether that data can be commoditized and sold, how a client could opt-in or opt-out of data sharing, and who would be at fault if records were compromised.

Do the benefits outweigh the privacy risks? According to Gale, open banking's advocates are focused on services to consumers: "Clearly open banking has the potential to empower small business by providing more automation of their banking systems. More specifically, fintech tools can better track cash flow and provide better and more efficient payment systems, affordability calculators, sales tax support services, payroll management, inventory control, and myriad other financial services."

Download Spring 2019

Read more about the challenges and benefits of open banking and the role of real estate professionals in the financial sector in Gale’s “Open Banking in Canada?” in the Spring 2019 edition of Input. Download Spring 2019

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