With the fintech sphere’s increasing prominence, the Ontario Securities Commission recently argued that open access to data is crucial to the nascent sector’s continuous development and relevance.
In a white paper published on Monday (March 6), the securities regulator stated that this conclusion was reached in its “hackathon” back in November, which focused on developing new fintech responses to the age-old problems of authentication, transparency, and regulatory red tape.
The OSC paper revealed that most of the solutions that emerged in the hackathon relied on blockchain, a decentralized ledger technology that is touted to be tamper-proof.
Blockchain’s versatility and scalability are its greatest strengths—but to unlock these same strengths, improved availability of the relevant data from financial institutions is needed in the first place, according to OSC LaunchPad chief Pat Chaukos.
“You need to have the open-access data before you can get to the innovation,” Chaukos said, as quoted by Reuters. “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 by improving auditing, oversight, compliance check speeds, and information collection, vetting, and analysis.
As an example, the European Union's Payment Services Directive 2 (PSD2)—scheduled to be effective early 2018—is expected to make waves in the payment industry, not the least because it will permit a third party to view banking data upon customer permission.
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