Canadian financial committee receives 2025 budget proposal from FDATA prior to the budgeting process
The Financial Data and Technology Association (FDATA) has urged the Canadian government to use Budget 2025 to swiftly implement a Consumer-Driven Finance system. This system, which aims to empower consumers and small businesses while boosting innovation in the financial sector, is proposed to expand the existing Open Banking framework into an Open Finance framework.
FDATA's recommendations, however, do not appear explicitly in the 2025 budget pre-consultation documents. The available documents primarily focus on broad calls for investment in digital trust infrastructure and economic growth.
Emphasis on Digital Trust and Secure Identity
Related inputs from the Digital ID and Authentication Council of Canada (DIACC) highlight the importance of trust infrastructure, secure and interoperable identity systems, and digital sovereignty as foundational for a strong digital economy. These elements are critical to enabling frameworks like Open Finance and Consumer-Driven Finance by ensuring security, privacy, and user control over data—a core principle underpinning consumer-driven finance models.
Consumer Empowerment and Innovation
FDATA Global, an organisation representing more than 30 financial technology companies and consumer-permissioned data access platforms in Canada and the United States, typically advocates for regulatory frameworks that empower consumers with control over their financial data, promote innovation through open APIs, and ensure strong consumer protections in such open financial ecosystems.
Regulatory Harmonization and Scalability
To avoid duplication and ensure scalability in Open Finance, FDATA proposes regulatory harmonisation across jurisdictions. The association also suggests expanding participation to provincially regulated institutions for a nationally competitive marketplace.
A Tiered Accreditation Model for Fintech and Startups
To support fintech and startup participation in Open Finance, a tiered, harmonised accreditation model is suggested. This model would enable these entities to navigate the regulatory landscape more easily, fostering innovation and competition in the financial sector.
The Bank of Canada as the Governing Body
FDATA urges the Canadian Government to appoint the Bank of Canada as the governing body for Open Finance. This decision is based on the Bank's expertise in monetary policy and its ability to provide a stable and secure environment for financial innovation.
Including Small Business Accounts in the First Phase
FDATA recommends affirmatively including small business accounts in the first phase of Open Banking implementation. This move would help small businesses access the data they need to make informed decisions, drive competition, and foster innovation in the sector.
A Long-Awaited Implementation
Canada has made limited progress in developing an Open Finance regime, seven years after the government's initial commitment. FDATA's submission to the Canadian House of Commons' Standing Committee on Finance (FINA) for the 2025 budget is a significant step towards realising this long-awaited implementation.
The successful implementation of an Open Finance system could enhance Canada's global competitiveness, driving innovation and competition in the financial sector while empowering consumers and small businesses. For the exact details of FDATA Global's recommendations for Budget 2025, interested parties are encouraged to review the organisation's formal submission to the Canadian Government’s pre-budget consultations or check the official government consultation portal where they accept public input.
- FDATA Global, representing numerous financial technology companies, advocates for regulatory frameworks that promote innovation in the global fintech industry through open APIs, while ensuring consumer protections in open financial ecosystems.
- To ensure security, privacy, and user control over data, which are essential for consumer-driven finance models, a strong digital trust infrastructure, secure and interoperable identity systems, and digital sovereignty are critical factors.
- To avoid duplication and ensure scalability in Open Finance, FDATA proposes regulatory harmonization across jurisdictions and expansion of participation to provincially regulated institutions for a nationally competitive marketplace.
- A tiered, harmonized accreditation model is suggested to support fintech and startup participation in Open Finance, fostering innovation and competition within the financial sector.
- FDATA urges the Canadian Government to appoint the Bank of Canada as the governing body for Open Finance, leveraging its expertise in monetary policy to provide a stable and secure environment for financial innovation.
