Could Alberta Enact a Sub-National Open Banking Regime?

Abstract

Despite diverse global operating models and evidence of economic benefits, Canada does not have a national “open banking” framework that allows for the safe sharing of consumer data across financial institutions. A presumption is that Alberta should wait for a national framework to emerge, rather than use scarce policy resources to foster open-banking provincially. This article contests that presumption and argues for an informed and pragmatic approach to open banking in Alberta, independent of a federal regime. It first establishes the conceptual and empirical economic benefits of open banking, and then outlines the implementation frictions, and continuing uncertainties, in the formation of a national approach. Then, using international precedent, it charts an informed and pragmatic course for open-banking in Alberta using a “market facilitative” approach. This utilizes the recently passed Financial Innovation Act (FIA) regulatory sandbox as a foundational anchor to foster immediate open banking and data portability use case development, independent of a federal framework, and without requiring a significant expenditure of policy resources, further legislative action, a complex sub-national regulatory architecture, or additional governance mechanisms. The FIA also serves as a low-friction testing environment for data portability applications beyond banking, and within the FIA’s broader “financial products or services” legislative perimeter. The article advances three steps that the province can immediately take to support a market facilitative approach: first, engage in public-facing educational initiatives on the benefits of safe data portability, and the availability, benefits and process of the FIA sandbox; second, utilize, develop, and promote the existing Invest Alberta financial “concierge” service as a gateway to open banking partnerships and the FIA sandbox; third, investigate a provincial consumer data right, which could serve as the future keystone in an open-data economy with use-case value across energy, utilities, consumer retail data, government data, and self-sovereign digital identity.

Keywords: open banking, open data, data portability, consumer data right, digital identity, regulatory sandbox, Alberta, Canada, fintech, financial technology, API, application programming interface, screen scraping

JEL Classification: K20, K29, K23