The Government of Canada will hold public consultations to address issues related to national banking
The Canadian banking sector is studying how to introduce blockchain technology to protect its customers’ data and optimize the handling of information in their processes. This was announced by a group of bankers, on January 15th, through a press report.
The central idea is to use a Digital Identification System in which customers can perform their operations more safely so the bank can protect this banking information, in addition to obtaining a better method to store and transport the information among the national bank.
Neil Parmenter, Executive Director of the Canadian Bankers Association (CBA), said, during a presentation at the Economic Club of Canada in the city of Toronto, that it is necessary to optimize, modify and adapt the procedures to new technologies, in order to project it towards a future with hundreds of possible solutions to common problems within the current banking system. This is in order to allow the digital identification system could be applied to strengthen and protect the database of each institution.
These statements were offered whilst discussing the boom that the so-called “open banking” is having, in which certain third-party companies, such as Fintech companies, can participate and share the user’s data access between institutions.
On these issues, the Canadian government itself conducted a large public consultation to guide the decisions that can be made at the administrative legal level.
During his speech, Parmenter said that “Instantly checking who is someone using multiple digital reference points is safer than relying on a photocopy of a driver’s license”. He added this system is even much safer than relying on files. In this sense, he explained: “Because this digital network is connected, but decentralized, the risk of compromising the system is reduced by eliminating the ‘honeypots’ (or traps) of data that hackers tend to attack”.
According to many members of the Canadian Bankers Association, this is an important step to link an entire information network with the data that really has value in the processes, using Distributed Accounting Technology to consolidate the Canadian financial institutions in the digital markets of the world.
Looking to the Future
It is not the first time that Canadian banks have announced major changes in their structures. In May last year, the CBA planned to develop a series of projects among which it mentioned the possible use of the Digital Identification System.
Although the use of blockchain technology was not mentioned in previous documents, it did comment on examples in different countries in which the Identification System proved to be a substantial success, and which would seek to adapt these advances to Canadian banking.
Canada is among the countries that are preparing big plans to introduce blockchain technology in sectors of public and commercial life. Some those blockchain technological services, inter alia, are the ones in the customs, agricultural and mining sector.
By María Rodríguez