Imagine. You’re a small business owner with a handful of staff members and contractors. Now imagine having one interface that has aggregated all of your expense tracking, client invoicing, payroll, tax information and it, of course, “talks” to your bank (accounts, corporate credit cards, and small business loan, all of which may sit with different institutions). You’re based in Alberta, but some of your vendors and contractors are US-based, others are in the UK. Like so many other Canadian businesses today, your world is global.
Welcome to Open Banking. Here in the land of shared information, cross-institutional communication, app & service integration, and open access, the true potential of AI and FinTech begins to shine.
The platform your business uses to manage everything has an AI that recognizes a pattern—you usually pay your American vendors on the last day of each month. Today is August 23 and the exchange rate is more favourable—but how are you to know? You’re busy running your business, not tracking the markets in real time. *Ping* You receive a push notification telling you “the exchange rate is anticipated to be better if you pay US payees today rather than on the 30th. Would you like to approve the transaction now? Yes/No.”
You click “Yes” and the transaction is completed.
Now imagine one of your employees is house hunting. Instead of asking for a letter of employment from you to verify their job status and salary, she simply provides consent to the mortgage brokerage, which uses an API to confirm that her bank account has received payments every two weeks from your company. And, that your business is also registered in Alberta in good credit standing—and has been at the same address for 10 years. Boom. Mortgage approved.
In many places around the world, the ability for financial institutions, banks and third parties to access agreed-upon information has been a reality for years. Bi-lateral or multilateral agreements have created closed-loop systems of data exchange. Open Banking regulations have helped break the silos and scale the solutions that FinTechs have been working on and gaining momentum (and scratching real itches for customers) for the past decade. Europe and Australia have already taken the first steps.
In Canada, however, progress has been slow. Primarily because regulations and standards haven’t been formally set yet. Not to mention big banks often fear that Open Banking takes aim at their bread and butter: holding money, moving money and lending money. If Open Banking gives customers more control and choice, it could weaken a bank’s grasp on their customer base.
Open Banking also comes with risks. The moment we open data to third parties, what guarantees does a customer have that this data, now in the hands of said third party, is safe? If that third party experiences a breach? What then?
But the train has left the station. Open Banking is coming, and greater access and control of money is something people want. So let’s not just figure it out, let’s lead the way.
At ATB, we believe banks could be among the biggest winners of Open Banking if we truly listen and are thoughtful about opportunities for customers. We’re already building out data processes and infrastructure in ways that could be accessed safely by FinTechs and third parties if and when we get the greenlight. Industry experts anticipate that federal regulations are coming in Canada in the coming months and years, and we want to help shape the new era of financial services while building in as many data safety and privacy safeguards as possible.
Preparing for Open Banking means we’re asking a lot of questions and experimenting in a number of areas. Right now, teams at ATB are already exploring and testing our own capabilities and potential offerings using APIs and setting up structures to test out and validate with customers.
We’re also undertaking data-mapping exercises and designing multiple scenarios in exploration with FinTechs and tech giants alike. And as always, we’re listening. We’re talking to Albertans, international industry experts, and engaging ATB team members across the organization. We’re in a state of readiness and constant preparation, drilling down on themes such as:
As William Gibson wrote in Neuromancer, “The future is here, it’s just not evenly distributed.” At ATB we’re accelerating access to that future and solving for that distribution so we can continue our mandate to transform banking and create happiness for Albertans.
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