Canadian Lawyer InHouse

November/December 2019

Legal news and trends for Canadian in-house counsel and c-suite executives

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www.canadianlawyermag.com/inhouse 25 Bindu Cudjoe, senior vice president, general counsel and corporate secretary for CWB Financial Group. "We're aiming to disrupt the monopoly of the big five, so this is a tremendous oppor- tunity for challengers like us," she adds. "It's imperative for us to put ourselves in a position to capitalize on the disruption." The 35-year-old institution has modernized its structure and introduced an enterprise data warehouse in preparation for the overhaul. In line with consumer nervousness about open banking, Shimoda takes a cautious view. "Innovation and competition in the financial services sector is important to ensuring long- term value for Canadians. That said, we need to be very aware of the risks surrounding con- sumer protection and customer experience as these are fundamental to banking," he says. BMO intends to be a leader in open banking and is already working on related initiatives through partnerships with fintechs. Chris Brad- ley, BMO Financial Group's associate general counsel, says he hopes to see Canada learning from the approaches other jurisdictions have taken to develop a framework for the expan- sion to open banking. "In Canada, designing a framework with the participation of banks and the use of their expertise in privacy and information security will be critical to open banking being a success in the short term and, even more importantly, a safe option for Canadians," says Bradley. Ensuring new entrants protect the security of customer data will be critical, he says, as they may not have the information security safeguards and privacy compliance policies that regulated banks have in place. In another development, digital ID with re- spect to payments is advancing and will likely remain at the top of the agenda for policy-mak- ers, politicians and business leaders. "With the new authentication methods available through mobile devices, we need to ensure that we have the right tools in place to authorize payment transactions in the moment," says Shimoda. "Digital ID is critical to this and will play an important role in the immediate future of mobile commerce." In or- der to enable frictionless commerce, Shimoda says he hopes to see digital integration with businesses to support the purchasing and payment behaviours of consumers. SecureKey recently launched Verified. Me in collaboration with financial institutions including BMO and Scotiabank. The app offers a secure way to verify identity. "A digital ID framework will make it easier to transact online and reduce fraud," says Bradley. Butler advises legal counsel to get in the game early and talk to decision-makers to fully prepare for the changing landscape. "We're all vested in working towards a really collaborative Canadian solution. You've got a great opportunity to influence decisions as it moves forward so that's the sweet spot for lawyers," she says. "All of the changes coming are going to really enable banks to integrate faster with a standardized approach with each other and with third parties." Says Shimoda: "It's an ongoing process, and challenging, because the roadmap for [the payments modernization program] is fre- quently being fine-tuned and adjusted, with the government's plans and timing for legislative changes still to follow, but so far it's been an interesting journey."

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