The Canadian Investment Regulatory Organization (CIRO) announced on Feb. 18, a call for stakeholders to get involved in a new consultation regarding the investment industry’s participation in open banking efforts.
Open banking, also known as consumer-driven banking or consumer-directed finance, allows consumers and businesses to share their financial data with approved service providers using application programming interfaces (APIs).
“Canada’s proposed consumer-driven banking framework is designed to provide a secure and efficient way for Canadians to access and share their financial data while enabling new financial tools and services,” CIRO states in its announcement about the new consultation. “CIRO will consult with its members and other stakeholders to clarify accreditation, regulatory oversight and compliance within the federal standards.”
Accreditation, liability, privacy and security
The Consumer-Driven Banking Act was passed in Canada on June 20, 2024, and included foundational elements of the framework including governance, scope and technical standards. “Upcoming legislation is expected to address accreditation, liability, privacy and security,” CIRO’s notice states. It notes that the consumer-driven banking framework was also included in the government’s 2024 Fall Economic Statement, released December 16, 2024.
“Some of our members have told us that they would like to voluntarily opt into the consumer-driven banking framework. Those who do will need to meet accreditation requirements, follow security standards and support reciprocal data-sharing,” Karen McGuinness, senior vice president of finance, investor and member relations at CIRO stated in the announcement.
Legislative progress could be temporarily delayed
“As of the date of this notice, open banking in Canada continues to advance through legislative channels. While the current proroguing of Parliament could temporarily delay legislative progress,” CIRO’s notice states, “CIRO is proceeding under the assumption that open banking remains an active priority for implementation in Canada.”
CIRO says through consultation with its members and stakeholders, it aims to clarify accreditation, regulatory oversight and compliance expectations. Supervision and enforcement of open banking in Canada is expected to be undertaken by the Financial Consumer Agency of Canada (FCAC) and by the senior deputy commissioner for consumer-driven banking.
Stakeholders interested in participating in the consultation to help establish and define the regulator’s role in assisting members to opt into the framework are asked to contact CIRO’s membership services.
