One regulator argues that the fintech sector’s evolution depends on improving the availability of data from financial institutions
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As fintech continues to gain momentum, the Ontario Securities Commission is arguing that open access to data is crucial to fostering the nascent sector’s continuous development.
In a white paper published in early March, the securities regulator said it reached this conclusion during its ‘hackathon’ in November, which focused on developing new fintech responses to the age-old problems of authentication, transparency and regulatory red tape. According to the OSC, most of the solutions that emerged relied on blockchain, a decentralized ledger technology touted as being tamper-proof.
Blockchain’s versatility and scalability are its greatest strengths, but in order for the fintech industry to benefit from them, OSC LaunchPad chief Pat Chaukos says financial institutions must improve access to relevant data.
“You need to have the open-access data before you can get to the innovation,” she said. “We’re going to support the facility of access to data.... It is very much a live discussion for all regulators, and I would actually even say for government.”
Chaukos added that open data would dramatically streamline the process by eliminating duplication, as well as improving auditing, oversight, compliance check speeds, and information collection, vetting and analysis.
As an example, Chaukos pointed to the European Union’s Payment Services Directive 2, which is scheduled to take effect in early 2018 and is expected to make waves in the payment industry, in particular because it will permit a third party to view banking data with a customer’s permission.
It’s not just the fintech sector that’s suffering from this absence of hard data. Renowned Bay Street money manager John Stephenson recently took the federal government to task for the glaring lack of detailed information on real estate sales. Stephenson argued that crafting an effective response to price growth in Canada’s hottest housing markets is currently impossible because accurate figures are few and far between.
“How can you make informed policy if you don’t have better data?” he said. “We don’t know who the buyers are; we don’t know where they come from; we don’t know if they live here. There’s very little data; there’s very little transparency. I think there’s a whole series of issues that are complicated [by a lack of data].”
In a white paper published in early March, the securities regulator said it reached this conclusion during its ‘hackathon’ in November, which focused on developing new fintech responses to the age-old problems of authentication, transparency and regulatory red tape. According to the OSC, most of the solutions that emerged relied on blockchain, a decentralized ledger technology touted as being tamper-proof.
Blockchain’s versatility and scalability are its greatest strengths, but in order for the fintech industry to benefit from them, OSC LaunchPad chief Pat Chaukos says financial institutions must improve access to relevant data.
“You need to have the open-access data before you can get to the innovation,” she said. “We’re going to support the facility of access to data.... It is very much a live discussion for all regulators, and I would actually even say for government.”
Chaukos added that open data would dramatically streamline the process by eliminating duplication, as well as improving auditing, oversight, compliance check speeds, and information collection, vetting and analysis.
As an example, Chaukos pointed to the European Union’s Payment Services Directive 2, which is scheduled to take effect in early 2018 and is expected to make waves in the payment industry, in particular because it will permit a third party to view banking data with a customer’s permission.
It’s not just the fintech sector that’s suffering from this absence of hard data. Renowned Bay Street money manager John Stephenson recently took the federal government to task for the glaring lack of detailed information on real estate sales. Stephenson argued that crafting an effective response to price growth in Canada’s hottest housing markets is currently impossible because accurate figures are few and far between.
“How can you make informed policy if you don’t have better data?” he said. “We don’t know who the buyers are; we don’t know where they come from; we don’t know if they live here. There’s very little data; there’s very little transparency. I think there’s a whole series of issues that are complicated [by a lack of data].”
