Steven Fell likes tracking his finances more than most people. He keeps all his expenses in a document to monitor how much he spends, and that gives him a better idea of what his expenses will look like in retirement.
Canadians aren’t just missing out on budget apps. Open banking could spur widespread innovation in the financial industry. There could be programs to recommend the best bank accounts or credit cards based on detailed tracking of your spending habits. For people with bad credit scores, it could help them pass rental applications by using a service that parses through their bank history to prove they always pay their rent on time.
“A million dollars pays for an office space, a couple of secretaries and a consultant. You can’t do anything with that,” said Andreas Park, a finance professor at the University of Toronto.Prof. Park’s views are among the most pessimistic for open banking in Canada. He doubts that it will ever be achieved here, since banking is so consolidated among our biggest institutions and it’s not in their interest to have a framework that increases competition.
“It can be hard to generate a groundswell of support for it, but it’s absolutely the right thing we should do and we’re behind virtually every other industrialized country in doing it.” Or what if newcomers to Canada were keenly aware of all the no-fee bank accounts and low interest credit cards available to them and could get tailored advice on the best way forward?
He agrees that Canada’s implementation has been slow because of the consolidated banking environment and the country’s reputation as a conservative financial market. His message to big banks that may lobby against open banking is that they could use their resources better to be at the forefront of the technology.