Betakit | Kelsey Rolfe | Sep 6, 2022

Concerns over competing interests between FinTech startups and financial incumbents have existed since the start of the process. Governance is the latest battlefront

• Working group participants from the FinTech community and those familiar with the talks expressed concern that delaying governance decisions could hamstring the system, leaving Canadians without recourse if their data or accounts are compromised. FinTech participants are also concerned they would be left without recourse in disputes with other financial institutions.
• Canada’s future open banking system will need some form of governance entity to handle dispute resolution between participants, ensure compliance with accreditation requirements, respond to security incidents and assign responsibility for remunerating consumers who’ve been harmed by possible data breaches or stolen funds, according to the advisory committee’s final report, released in August 2021.

NCFA Canada’s Open Banking Journey Series:

• In response, Two FinTech industry associations (FDATA and PayTechs) have moved to address those concerns by developing or submitting their own reports on future governance options, BetaKit has learned.
• Another working group participant from the FinTech space said the fact that the technical standards for APIs and governance options have been missing from the discussions so far “candidly was concerning.” They noted that there are several options Tachjian and the finance ministry are considering regarding API standards, but “we don’t have a clear indication of what that answer is going to be.”
• Concerns over competing interests and competitive advantages regarding access and authority between FinTech startups and financial incumbents have existed prior to the release of the open banking report. The most recent flare-up came over frustrations with an early draft version of the CIO Strategy Council’s (CIOSC) minimum viable framework for consumer-directed finance, which some feared would give banks a competitive advantage over startups regarding authentication, consent and data transfer methods. Governance seems to be the latest battlefront.

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