Half of Canada’s major banking institutions provide features that use “screen scraping,” a widely scrutinized practice, a new report has found.
Screen scraping “has a computer program access a customer’s financial account using their login credentials to gather data to power digital applications such as accounting software, budgeting programs and spending trackers,” according to The Logic, which identified BMO, RBC, and National Bank as users of this method.
This sharing of login credentials places banking customers at risk of privacy breaches and cyber hacks. Yet roughly nine million Canadians have engaged in the practice.
Privacy advocates and policymakers have expressed concerns around screen scraping, and The Logic points out that “the terms of service of every major Canadian bank except National Bank prohibit customers from sharing their online banking credentials with anyone,” which means rules are being broken in order to remain competitive.
Some reasons for screen scraping are noble enough, such as enabling the user to have a full financial picture of all their institutions in one app—but the methods are often insecure, and the risks are seldom sufficiently presented to customers.
A solution to this problem appears to be the launch of an official open banking framework in Canada, but the Liberal government has stalled on this front for years.
Among the experts interviewed by The Logic was Daniel Eberhard, who heads Vancouver-born “challenger bank” Koho. Describing screen scraping as “universally bad,” the fintech entrepreneur blamed Canada’s lack of open banking.
“We’ve made no progress on open banking in a decade,” he lamented, so institutions have resorted to available alternatives.
Eberhard also suggested that the Big Banks have lobbied to slow open banking progress, implying a nationwide protocol could empower rising fintech rivals and finally threaten the incumbents.
Another problem is the messaging around the concept—most Canadians haven’t even heard of open banking, and those who have barely understand what it is. Indeed, Canadians’ main concerns with open banking revolve around data security (63%), privacy (62%), and unauthorized access to their personal information (54%), even as they unknowingly engage in riskier alternatives.
We wrote last year about how, as Canada’s government continues to lag behind the US, UK, and other regions on adopting open banking, private companies have been doing what they can to push the protocol forward.
For now, it seems, screens will be scraped.
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