Federal Working Groups Update
During the week of July 4th, the Department of Finance’s (DoF) federal open banking working groups (federal WGs) on accreditation, security, liability, and privacy held their inaugural meetings to kick off the development of Canada’s open banking framework.
Membership
The membership of the federal WGs is as follows:
Accreditation: Central1, Desjardins, Vancity Credit Union, Flinks, Plaid, Stripe, Wealthsimple, Laurentian Bank of Canada, National Bank of Canada, Scotiabank, and TD Canada Trust.
External guests (observer status): British Columbia Financial Services Authority (BCFSA), Competition Bureau Canada, Financial Consumer Agency of Canada (FCAC), and Office of the Superintendent of Financial Institutions (OSFI).
Security: Affinity Credit Union, Alterna Savings and Credit Union Limited, ATB Financial, CIBC, Clearco, Equitable Bank, Flinks, nanopay, PayBright, Questrade, Royal Bank of Canada, and TD Canada Trust.
External guests (observer status): Credit Union Deposit Guarantee Corporation of Alberta, FCAC, and OSFI.
Liability: Meridian Credit Union, Servus Credit Union, Vancity Credit Union, BMO, CIBC, Canadian Western Bank, Intuit, National Bank of Canada, Neo Financial, Option consommateurs, Plaid, Portage Ventures, Public Interest Advocacy Centre, and Wealthsimple.
External guests (observer status): Autorité des marchés financiers (AMF), Competition Bureau Canada, FCAC, and OSFI.
Privacy: Coast Capital Savings, Desjardins, Propsera Credit Union, BMO, Borrowell, Brim Financial, First Nations Bank of Canada, Interac, Mogo, Option consommateurs, Public Interest Advocacy Central, RBC, and Scotiabank.
External guests (observer status): Financial Services Regulatory Authority of Ontario (FSRA), FCAC, and OSFI.
Meeting Outcomes
The Department of Finance has also updated its webpage to include the meeting outcomes from the first set of the federal WG meetings. Please see below for the meeting highlights:
- Participants decided that the proposed topics for the group were appropriate and noted that the Accreditation WG topics will have overlap with those considered by the three other WGs.
- Participants suggested that environmental and social governance (ESG) and anti-money laundering (AML) could be criteria in accreditation; no consensus was reached.
- Participants expressed interest in exploring different tiers of accreditation in upcoming meetings.
- Participants noted possible barriers to obtaining cyber-insurance.
- Other considerations:
- How to ensure that a TPP continues to meet the accreditation criteria
- If a TPP that once was accredited but no longer is, how to communicate that to other organizations that engage with the TPP;
- Frequency of TPP re-accreditation;
- Leveraging existing privacy and security laws, regulations, and standards within the framework; and
- Including a dispute resolution mechanism under internal governance requirements.
- Participants decided that the proposed topics for the group were appropriate.
- Participants raised questions around data quality, liability concerns, and whether data quality concerns are necessary for the first phase of open banking.
- Participants generally agreed on the need to assess the proportional application of risk frameworks - factors include scope, nature of data use, client volume, and service types.
- Challenges:
- Implementation challenges exist for banks due to legacy information technology systems.
- Participants decided that the proposed topics for the group were appropriate.
- Participants generally agreed that consumers should be limited from liability in all functions of open banking up to a small fixed dollar amount, except in cases where the consumer was proven to have committed gross negligence/gross fault, or criminal acts, such as fraud.
- Participants generally agreed that liability limits should be aligned to existing standards of practice. Raising the baseline level of digital and financial literacy among open banking consumers was also discussed.
- The majority of participants agreed that $50 should be the liability limit for consumers except in cases where the consumer was proven to have committed gross negligence/gross fault or criminal acts such as fraud.
- Participants decided that the proposed topics for the group were appropriate.
- Participants generally agreed on the essentials of consent: consent must be explicit regarding the implications of the data use and there must be, transparency on how the data will be used; consent should be limited in time and revocable. It was noted that consent requirements should build on top of existing privacy legislation and not deviate from it.
- Participants raised questions on how consent may be provided in respect of joint accounts.
- The majority of participants supported a 12-month interval to refresh consent. A small number favoured no requirement or a shorter timeline to refresh consent when the application is not regularly used by the consumer. It was noted that refreshing consent based on the application may pose technical challenges.
- Participants agreed that when a consumer closes their account or the purpose for collecting that data changes, revocation is appropriate.
- Participants agreed that data recipients and data providers should share the responsibility for collecting consent; however, most of the burden should fall on the data recipient.
Upcoming Meetings
The next cycle of federal WG meetings will be held this week. Meeting materials can be found on Finance’s webpage here.
Credit Union Working Groups and Collaboration Committees
To ensure system concerns and positions are being brought to the federal WGs, CCUA has created provincial working groups and a National CU Open Banking Collaboration Committee (OBCC) made up of credit union system partners.
The terms of reference of the OBCC can be found here.
OBCC Update
On Thursday, July 21st, the OBCC held a meeting where the discussion questions for the upcoming federal WGs on Liability and Privacy were discussed.
The meeting outcomes can be found here. These meeting outcomes will be provided to credit union representatives sitting on the federal WGs to ensure system-wide concerns are discussed as the open banking framework is developed. If you have any questions, please contact Sabena Sandhu, Manager, Policy.