The Globe and Mail reports in its Monday edition that Canadian financial technology companies are poised to benefit from potential changes to the banking system that would force competitors, such as the big banks, to share their clients' financial transaction data at the customer's request. In a Globe special, Brenda Bouw writes that the concept, known as "open banking," is the creation of digital channels to exchange customer information directly between financial institutions and other parties. The information can be used, for example, by consumers with accounts at one institution applying for a loan or mortgage with another. If open banking becomes an industry standard, it would give fintechs more room to expand in a market dominated by larger financial institutions.
"Open banking, if implemented, would put the choice of working with fintechs in the hands of the customers," says Sue Britton, who runs the FinTech Growth Syndicate. The federal government is reviewing the merits of open banking and launched an advisory committee last fall to begin the public consultation process. The committee is taking submissions until Feb. 11 and is expected to write a report for the government to consider next steps.
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