In a letter to the Minister of Finance Chrystia Freeland, Open Finance Network Canada (OFNC) has called on her department to prioritise a Canadian consumer-driven banking framework that places the country’s small businesses “at the forefront”.
The not-for-profit organisation outlined three “key” consumer-driven banking use cases for small businesses and cited “notable examples” of countries that have “embraced” Open Banking in a way that is conducive to small businesses, including the UK, Brazil and Australia.
“We are writing to you today to emphasize the opportunity that Consumer-Driven Banking represents for small businesses across Canada and to urge your office to prioritize the development of a legislative framework to make it a reality,” the OFNC wrote.
In the letter, the OFNC cited data from Innovation, Science and Economic Development Canada which showed that, in 2020, Canadian SMEs accounted for 99.8% of employer businesses in Canada and produced 43% of the total value of Canadian exports.
The OFNC added: “We believe that Canadian SMEs will be empowered to drive further economic growth in Canada within a formalized Consumer-Driven Banking framework.”
The organisation also referred to a recent study by McKinsey & Company which found that implementing Open Data across sectors could strengthen Canada’s GDP growth by between 1% to 5%.
By giving SMEs secure access to their own financial data, Open Banking will foster “choice, innovation, competition and efficiency”, as well as giving Canadian businesses “unprecedented opportunities” to grow, according to the OFNC.
The consumer-driven banking use cases set out in the letter include giving SMEs the ability to access a broader range of financial services “beyond traditional banking” through APIs.
Streamlined payments and transactions, and “proactive” financial management are the other two use cases identified in the OFNC’s letter.
The OFNC has also urged the Department of Finance to consider multi-ownership consent in any Open Banking framework, given that “many small businesses have multiple stakeholders, partners, and decentralized ownership structures”.
The letter concluded by saying: “We urge your office to prioritize the advancement of the Canadian Consumer-Driven Banking framework in the upcoming legislative session to include a roadmap to enabling SME data sharing.”
Earlier this week, not-for-profit Fintechs Canada revealed the Open Banking and Real-Time Rail proposals it put forward in a pre-Budget submission to the federal government.
Michelle Beyo, president and board member of Open Finance Network Canada is speaking at Open Banking Expo Canada on June 11 – get your tickets here.
