Behind the Brand®

Abraham Tachjian, Good
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Jeff Adamson: [00:00:00] Welcome to Behind the Brand, the podcast that explores how technology, innovation, and other forces of change are reshaping age old industries and giving rise to new opportunities. Join me, Jeff Adamson, one of Neo Financial's co founders, and an awesome line up of guests to discuss how the world is evolving to meet the needs of customers.

In the next few episodes, we're focusing on the financial industry. In Canada, it's the news. This is a space that has been dominated for decades by the big five banks who hold 93 percent market share. There's an incredible number of opportunities for innovation in this space. On this episode, I'll be speaking with Abraham Tashian, open banking lead to the government of Canada and the self described authority on open banking.

In March, 2022, the government of Canada named him the country's open banking lead. He was tasked with the mandate to empower Canadians and businesses with greater control over the financial data. Through a [00:01:00] report that he provided to the government of Canada, he established the foundation for Canada's open banking system that will be implemented through legislation.

Currently he's a director at PwC where he leads the firm's Canadian open banking practice. Before joining PwC, he has been involved in FinTechs, From as far and wide as Hong Kong and Singapore, where he actually started digital banks. It is an honor to be, to be hosting your first visit to Calgary. It's my pleasure.

And the thing is, that's a dangerous thing to tell anyone who lives in Calgary because they're going to be like, okay, you need to go to this place. You need to go to the mountains, go see Lake Louise, Lake Moraine. So yeah, welcome, welcome here. Um, grateful that you're taking the time. I've read a lot about what a lot of the work you've done, especially on the open banking file.

But I want to understand a bit more about the, the kind of the man behind the Canada's Open Banking role. Where'd you grow up?

Abraham Tachjian: Montreal, born and raised. I grew up convinced I was going to [00:02:00] be a lawyer. Partly because I was horrible at math. And I needed to have a backup plan. And I didn't want to go work for my dad.

I love my father. I love working there in the summers. We grew up in the car business. My father immigrated to Canada, the typical immigrant success story, came to Canada with nothing, started a car business, raised the family, put me and my brothers through school, gives a very comfortable life and really pushed us to exceed.

So a lot of what I've accomplished, I have to give to my dad. I started in Montreal, grew up playing football, I'm enamored to this day. I think I should put on my CVs that my pastime is rooting for, uh, teams that always lose. But anyways, I grew up in Montreal. There was no Alouettes, uh, in my time. So I ended up being a Bills fan and that's been 30 years of suffering.

But I digress. I'm still holding the faith. Learned a lot of lessons, uh, from playing football on perseverance and essentially learning how to lose and staying resilient. Keep working towards your goal. And so that really helped me through school, helped me become a lawyer, and I was reminded of that in [00:03:00] my early days of practice.

I came out of law school convinced I wanted to be a finance lawyer, and there was all these really complicated financial products with these arcane acronyms that I really couldn't understand, but I figured, wow, I can't understand it. It must be really fancy. I need to dedicate myself to this. So I started working on mortgage backed securities and all that really complicated stuff until the market really collapsed overnight, which was my first sign that I really have bad timing in life.

Fast forward from there. I left Montreal. I moved to Toronto. I genuinely didn't know anyone. I had a great opportunity to start my first digital bank here. That didn't work out, and at the time I swore I would never do it again. We were at the licensing phase, we were building a product proposition. It was, it was novel.

It was novel at the time, yeah. What year is this? Uh, 2009, 2010, I think. This is on the heels of the financial crisis, right? You've got new propositions coming out, maybe a little ahead of their time, to be honest with you. Most things in life are timing. So we tried that, and it didn't work out. Eventually ended up in Asia when I was in law school.

I [00:04:00] spent the summer there studying. And when I was done, I went to Hong Kong, uh, just on a trip and it blew my mind. I said, I've got to find a way to have some professional experience here. So eventually, uh, it wasn't Hong Kong. I ended up in Singapore working for standard charter. I took that as an opportunity just to get into the region.

And I was lucky this time. My timing was good because the FinTech space was really blowing up there. So I did my best to leverage that opportunity. I, uh, I started writing a bit about what I was seeing. Open the door to some speaking engagements, which got me introductions in front of our digital

Jeff Adamson: people at the bank.

A lot of people say, especially I say agents who immigrate to Canada will often say, wow, things are really, really different here on the banking side or even on the technology side. Like there's no super app. You can't just like have banking embedded into everything that you do. From my perspective, it seems like they're ahead.

Maybe they're ahead in some ways and behind in other ways. But. It seems like the sentiment is that they're ahead of us. Is there a regulatory environment? Is it a cultural reason? Is it that there's [00:05:00] just more technology companies there? What, what do you think the reasons are?

Abraham Tachjian: I'm sure the presence, um, of technology companies helped, but just looking at China, which I think is a template for these super apps, I think one of the reasons you really saw these grow, uh, is because historically in China, the financial sector didn't really address market needs when it came to perhaps the middle class.

Or just regular consumers and focused more on state owned enterprises. So there was an opportunity there that the folks like Alipay to really build up a quote unquote super app. And if you would compare that to Canada, look, we've, we're a fundamentally well banked country. If you look at statistics, most people have multiple bank accounts, which I think open banking will help kind of manage down the road.

So I think there's a bit of that disconnect. Um, so while it's always good to look at other countries and try to draw comparisons and see gaps, there's always different policy objectives. Different technological, uh, reasons and just different demographics, different reasons why something went a certain way and it's, it's not always, [00:06:00] um, as simple as it looks.

Jeff Adamson: So you got back and I know that when we were chatting earlier, I was trying to figure out, okay, is Abraham, is he a startup guy? Uh, he's got this role with the government. Is he a government person? And I'm like, I couldn't put you in any, any box, but you, you kind of, you did the stint in Singapore and. Yeah.

Then you came back to Canada, uh, you're working for PwC, what, what made you put up your hand to say that I want to take on this file on open banking, knowing that it was going to be something brand new for Canada, you know, you got fairly entrenched incumbents who may be more in favor of the status quo, maybe that's changing.

Um, you've got a nascent startup community that wants things to change. You know, there's so many reasons why this is going to be extremely difficult to do. You know, what made you want to step up and

Abraham Tachjian: take the file? Maybe I'm naive. Maybe I love, I love a challenge. I always like to say, especially to the people I'm working with, if it's easy, anybody could do it, right?

So. I get a bit of [00:07:00] that high from trying to solve a problem that's really difficult. One of the reasons I got on this file, when I was in Asia, in Singapore, we had the opportunity to start talking to the regulator there about open banking. This is about the time, I think it was 2016, 2017, where they started thinking about how they can introduce this into the market.

So I had a really good opportunity to kind of understand the fundamentals. It's a bit of a baptism by fire for me because it wasn't really on my radar. Like most things in my career, I find luck has had a lot to play with it. So I was lucky enough, uh, that my boss asked me one day, Hey, there's a meeting at the regulator on open banking.

Would you like to join? I said, absolutely. And the first thing I did is go on Wikipedia and see what the heck is open banking, but I wasn't going to pass up that opportunity. So I went and I learned a lot about it. And I think one of the things that attracted me was, look, I'm a vociferous consumer. I'm on message boards.

I'm on the internet every day trying to find the best deal. Absolutely. Absolutely. I'm, I'm on the red flags forms every day, multiple times a day.

Jeff Adamson: Don't tell me what your username is because I will

Abraham Tachjian: hunt you down. I'm, [00:08:00] I'm, I'm looking for a best deal no matter where I can get it. And so when I started learning a bit more about open banking and seeing, at least from a financial perspective, how they get me better deals on finance, like it piqued my interest.

It was a marriage made in heaven for me. Uh, so we did that in Singapore. And then Hong Kong started thinking about it as well. So I had the opportunity to work with the regulator there, uh, to share the bank's thinking about, you know, how this could evolve, where we'll see some challenges and, you know, where we'd like some regulatory attention.

So when I came back here and the second round of consultations came up, I, I raised both hands to say, Hey, look, I've had some involvement in Asia and I'd really love to be part of it. I was lucky enough to be involved in the second round of consultations, ran a couple of the workshops and I was more than happy when they invited me to come be the lead afterwards.

Jeff Adamson: Interesting. And with your background, I think you were well suited. I mean, especially given that you've had some startup experience, some big bank experience, you've, you've operated, you have a legal background, you've also seen different You know, areas around the world. So they did a good job picking the right man for the job and I'm not just saying that [00:09:00] because you're sitting here and you might slap me if I say you weren't, but but truly like there's a lot of times when people get put into roles, especially when it comes to government and you're like, why that person?

And I feel like and I've talked to a lot of different people and I think universally people have been very, very respectful of the work that you've done. Um, and, and in terms of, you almost always get people who are going to be critical. And I actually have found that there's been quite a, not, not many people or any that I've even spoken to have been critical of, of your appointment to that role.

So I think that speaks to not only the background in your body of work before you came to that position, but also I think the work that you did while you're there, but for the average Canadian. Why should they even give a shit at all about open

Abraham Tachjian: banking? First, thank you very much for those compliments. I would be lying if I told you I didn't have a bit of imposter syndrome, because it was such a huge file and at a point I'm like, wow, I can't believe they chose me.

But that really drove me. But as for consumers, Look, I don't think consumers care about open banking. The only people that care about those terms are me, you, and [00:10:00] us in the industry and the government, right? It's, it's a industry term. If you have a car or you don't care how it works, all you care about is it gets you from point A to point B.

So from a terminology perspective, I don't think consumers care. And yeah, it's, it's an industry term. Why are we imposing this on them? I think what they care about. Is, uh, the capabilities that come with it. Lower

Jeff Adamson: prices. Absolutely.

Abraham Tachjian: More convenience. Absolutely. Absolutely. And I think that's where, um, the opportunities lie with open banking.

Not necessarily convincing consumers that, hey, there's a concept. You should really care about this. Rather, I think it's up to the industry to take whatever framework eventually comes, build products, and help you serve your consumers. I think that's what they'll care about. The ability to, I don't know, tie multiple bank accounts and get a aggregated snapshot of your financial wealth, get approved for a mortgage in a couple of minutes like some Australian banks do.

That's what they care about.

Jeff Adamson: It seems like, like you've come out and you've, You've said, Hey, here's, here's how we think it should go. You've given, you can recommendation to the government, I guess. How do we [00:11:00] keep this on Canadians minds? Like, cause no one's, there's no banks out there marketing it. You know, the government is not really pushing it.

It's hard to understand for the average person. And it doesn't really feel like it's anyone's job to keep it top of mind. How should banks be thinking about this? Or like, whether that be credit unions, regional banks, schedule one banks, politicians, how can they keep this on the forefront of, of Canadians minds?

Cause. Because I agree like it, you know, it's, it's kind of like a technical term, you can change the term to consumer driven finance, open finance, no one's going to care, it's kind of one of these things where they're only really going to care once they see it, but they're not ever going to see it if we don't keep it top of mind for Canadians, so is it just drilling in just like, hey, put up your hand if you want lower fees, put up your hand if you want, You know, more choice, more competition.

How do we actually get Canadians to care over the next 18 months so that this is actually something that politicians run the next election

Abraham Tachjian: on? I think organically we'll see that. I don't think it should be anybody's responsibility to be the cheerleader for [00:12:00] open banking. Because again, I go back to what we've been discussing.

Consumers don't care about the term. So if you keep pushing this messaging across, it's going to fall on deaf ears. I think what it's incumbent upon system participants. That's banks, credit unions, fintechs, politicians, whoever you name it, is to enable a framework that creates consumer permission access to data.

What I mean by that is, allow the consumer to give their consent to someone that they choose to do something on their behalf. That's one side. Make sure you've determined what data is captured by the system and then let the, let, let stakeholders run with them, let them build the products, let consumers see what the opportunities are and let them let it grow organically from there.

So I don't think you need a cheerleader. I genuinely think that the only way to push this forward and perhaps a KPI of this is to see a couple of years down the road, how many products there are out there that are really helping consumers as opposed to the number of API calls you have or. Again, consumers don't care about that.

And [00:13:00] I don't think we should put too much stock into that. I think the KPI here, a couple of years down the road, seeing how the system has evolved, how many more market players are really leveraging this and how are consumers being

Jeff Adamson: served? But I guess what I worry, Abraham, is that We're never going to see that day unless there's political will.

And it seems like both political parties had come out and said that this is, this is something that they want to do. And there was some buzz around it. And then kind of went quiet for a bit. Your appointment, I think everyone was really excited about because it means that, Hey, they're taking this seriously and they're, they're bringing someone that has your experience in to really make some recommendations and build a framework and, and kind of, I'd say build the, um, The how to guide, but it seems like unless there's some party talking about it, and we saw last year that, you know, the Ontario conservative government, uh, put a little bit of weight behind open banking.

And then there was a private members bill late last year that put a little bit of weight behind it. Is this something that we need to have politicians running [00:14:00] on and really talking about? And if, if there's voters who are looking and saying, Hey, who do I want, you know, in, in the next election to be running this country, how should they be thinking about it?

Yeah. So both from a political perspective, but also just from a voter's

Abraham Tachjian: perspective. Yeah. That's a good question. I'm, I'm not a political analyst by any means, but I will say that I don't think this is a, uh, solely political issue anymore. I think this is an economic issue. and a consumer protection issue.

And the reason I say that is because we already have a form of, uh, open banking, if you wish. The consumers are already sharing data across whoever provides them services. They just do it in an unsafe manner. There's another industry term called screen scraping, right? I think it's really important to put that into context with respect to all the developments in the sense that I think the last numbers we had Uh, somewhere around 6 or 9 million, I forget the exact number, but there was millions of Canadians that share their credentials with another organization for them to do something on their behalf, a form of open banking.

Kind of like hacks and workarounds. That's right. That's right. It's [00:15:00] already happening. The system design and whoever's paying attention to this, it's, it's gotta be designed in a way to make sure that we've got the right practices. We've got the safe practices to protect consumers. So I think this has become a consumer protection issue from one side.

Right. Um, there's also a, a degree of economic development in terms of really helping our financial landscape. I think one of the misconceptions people make when they assess open banking and what perhaps incumbents, fintechs, credit unions, perspectives are about it is that, well, perhaps the camps are divided, right?

It's incumbents don't want this, fintechs are all for it and all that type of discourse, which I think is materially false. Um, I think organizations have come to the conclusion that this is happening. There's a benefit to consumers. But we need to do this in a safe and efficient and fair way. We can't lose track of what we're trying to build here.

It's a data ecosystem we're building. Banking just seems to be the first use case. But if we really want to build up a data economy, this is the first step. So I [00:16:00] think when you start looking at it from a consumer perspective, in terms of protecting them, making sure the right guardrails are in place so that when they're sharing their data, they are protected to make sure that the right organizations are on the hook when something goes wrong.

And generally to allow organizations to build on data driven products, I think is a better way of looking at it in terms of how this system will develop. And how we should pay attention to it.

Jeff Adamson: Just back to your earlier comment about how it's not a political issue. It's more of an economic issue, but whose responsibility is it to be thinking about the economic issues?

Like right now, people, they're talking about housing. They're talking about inflation. They're talking about cost of living. And this I think touches on those things because like even for example, like real time rails in Canada, we don't have real time rails, which basically means that money moves at a snail's pace.

There's a cost doing that. There's a cost. It's like a drag on the economy. Uh, I'd say. If internally, if it's harder for people to switch from one institution to another, or one, call it whatever you want, because right now it's pretty easy for me to switch from Netflix [00:17:00] to Amazon Prime. I could probably cancel my Netflix in 15 seconds.

And then I can go and open up an Amazon account in another 15 seconds. I would, I don't know the exact number, but I would wager that if you're a consumer and you want to close an account, and you want to replicate what you're doing, you can. At another institution, another bank, I would say it's at least a day of work, uh, in terms of switching, first of all, like, you have to get a hold of someone to close, like, it's not even mandated that you actually have to, like, Have an online account closure.

Usually you have to call in. If you have to call in, everyone in Canada knows what that's like. That's like a, maybe, I don't know if it's a uniquely Canadian thing, but like waiting on hold at a bank is almost like a meme at this point. And I think if you were going to say, you know, me waiting for a bank to answer the phone, it'd be like the skeleton on the park bench.

But then you have to go in and you have to then hook up all of your, your bills. You have to switch all of your, your, Your bill pay over your payroll redeposited for me, like if a bank knows that if you're in and in capitalism, I think everyone knows that if you have your [00:18:00] customers and if you know, the switching costs are super high or if the options are limited, humans are humans that you're just not going to have to compete as hard for to keep those customers.

Because you know, it's like, well, listen, yes, you had to wait on hold for an hour. Yes, you didn't like the answer I gave you. Yes, I'm charging you fees, but do you want to spend a whole day switching over? Like, do you not like it that much? And so I guess at what point do we get to a point where it's too much?

Because you're talking about the security risks of screen scraping, which that to me seems like it's a risk that will build over time to a catastrophic event potentially where you have a massive breach of trust. Consumers banking information and banking passwords being, you know, potentially leaked in some way or, you know, other, other types of vulnerabilities, but to me, the lack of competition and the drag on the economy of not having real time money movement is much more of a slow death.

And those ones I think are the ones I worry about more than the catastrophic ones because it's got, I mean [00:19:00] catastrophic, you get through it, you know, it happens quick and hopefully it's over quick. Usually you make a lot of change really quick once that happens and hopefully we won't need to, but with the slow death, that one is like the boiling frog situation where the water just keeps getting warmer and warmer and warmer and the frog won't jump out of the boiling pot.

So I'm a bit torn because I'm trying to think of how do we get people and by people I mean elected officials. Or unelected officials to basically say that we care about this so much because we want to live in a Canada where people can freely go and compete with one another for, for your business. And if someone's not doing well, you can click a button and you can go next door like it isn't everything else.

And it seems like it's been so long since the government's first came out and said that it's going to happen. And I know that a lot of people are frustrated. You are the closest person to this. So that's why I'm kind of trying to pin you on this issue, is how do we get this to become something that has political will, regardless

Abraham Tachjian: of the party?

[00:20:00] I think we're getting there. You're right. This has taken a long time to get to. I think I was mapping it the other day in a slide I was prepping, and it's like seven or eight years, um, which is an eternity in, technology and banking or just life. I get it. It's taking us a long time to get here. Studies, consultations, you name it.

I mean, I've been involved in two of them, so I can attest to, yes, it's taken forever. But I go back to what I was saying earlier about building a data ecosystem versus just generally technology, right? When, when, when you're giving your, your Netflix to prime or to Disney analogy, I get it and you're dead on, but there's no money involved there.

Financial institutions, essentially, they're keeping your salary. People are very, very critical when it comes to an organization keeping their salary as they should be. And when we're trying to build a system around that, that facilitates the movement of money, that facilitates the movement of data to give consumers more choice, forcibly, it's going to be a bit slower because there's a gazillion moving parts.

And I think from a certain perspective, not justifying the amount of time it's taken, [00:21:00] that may have contributed because there's a lot of heavy lift involved in addressing some fundamental questions. So I think we've made a lot of progress in that perspective. From the numerous discussions and particularly the work we did by we, my, I mean, myself and the secretary at the Department of Finance with the consultations really zoning in on some of the fundamental questions and finding a solution to them, which I think we have in terms of the framework that I've handed over to the government.

I think we've answered some of these fundamental questions. It's not going to be perfect. No system ever is, and I think it'd be foolish to expect perfection, but I think we've addressed enough of the points that we have a system, a good infrastructure on which we can start building towards. So I would frame it from that perspective.

I would go back to the difficulties in building a data ecosystem around financial services and the time and effort associated with

Jeff Adamson: that. I think everyone knows, or at least we should manage everyone's expectations that we're not going to stick the landing on this. And that implementation and how that happens will be imperfect.

I think, I think we're just looking [00:22:00] for a start. And I think that's kind of in, in the startup DNA is, is get from zero to one. And you know that you can spend forever trying to perfect it, but at the end of the day, you need to get something out into the world. And it's something you challenged me on was I kind of came in here guns blazing with like, okay, hey, Starbucks are very, very for open banking and incumbents must be really, really against it.

I had this image of a kind of a cabal of. of executive bankers, all kind of in a dark lit room, all kind of conspiring together. And you actually challenged me on that. So what have you seen? Cause you've done a ton of consultation across startups, regional and credit union banks and big banks. Do they kind of all move as a unit?

Uh, within them, or is it pretty heterogeneous? Not

Abraham Tachjian: at all. First of all, there's differences in opinion in terms of how the system should evolve. That's one perspective. But I think it's a misconception to think that all of the incumbents don't want anything to do with open banking. I think if you look back at [00:23:00] the genesis of this project, I think the conversation was more around doom and gloom.

In fact, that's what I was noticing from my angle in Asia. I got the sense that Everything that had to do with open banking was falling into this discourse of, look, we've got this fundamentally safe and secure financial system, which we still do. And open banking is an attempt to compromise that and create all types of issues.

I got the feeling that's where the conversation was. As we progressed through the second round of consultations and the work that I did, That narrative shifted materially. I think there's a lot of bankers, every incumbent, at least that I've had the opportunity to speak with, including credit unions, see this more as an opportunity than a challenge.

Because suddenly, you're giving your consumers more options. And you're finding ways to better understand your consumers. Imagine you're a customer of a bank and you import your data that you have at another financial institution. Suddenly, I get a better snapshot of how you spend, where you're spending, and I can target you better with, uh, more relevant financial products, right?

We all get targeted with [00:24:00] advertising on the internet, and it's 99 percent of the time it's useless. But that 1%, when something hits, you're like, wow, this is interesting. And you end up buying that. I think you can make that same analogy here. And I think that's the realization that a lot of the industry incumbents may have come to in the sense that, um, this is likely going to happen.

Let's understand where the capabilities are. And from there, I, I think the mindset shifted. You're right. I would disagree with anyone that says that there's a material opposition to this. I don't think that's the case. I think the concern and throughout the industry, big credit unions and FinTech says, look, we need rules of the game here.

All right. We need to understand again, going back to what I said, who's on the hook. If something goes wrong, how do you protect consumers? What type of data are we sharing? I think the fact that we didn't have this previously may have created some hesitation, but as we work towards having a system that outlines these fundamental features, There's more comfort and there's more realization that we could do this safely for the consumer and we can build the economy.

Jeff Adamson: There has to be, and maybe this is a misconception, but [00:25:00] there must be a certain advantages to certain groups because once people accept that it's going to happen, then you're like, okay, now it's just about getting the greatest advantage that you can. I guess, how do you play fair or how do you implement this in a way that's hopefully is going to be treating each different stakeholder fair because the incumbents obviously have it.

Defensible moats. They have a lot of momentum startups, but also have advantages of their own as well. If everyone kind of says, Hey, this is going to happen. Let's just make the best of it. Then do you see that this is going to benefit one group over the other? Just not necessarily because they've lobbied one way or the other, but just by nature that, you know, change is a little bit easier perhaps for a smaller companies than it is for big, but then the big have the scale already.

So how do you see. The playing field from that

Abraham Tachjian: perspective, to be frank, I never thought about that. What I try to focus on essentially is what I could control. And what I could control is to make sure that we have a system that outlines what type of data is going to be shared, who has access to it and on what terms.

And I figured if we've done [00:26:00] a good job addressing those in a fair manner, the market will solve for it, right? The market will come up with products based on the design of the system. Um, I never looked at designing the system based on a specific capability or specific product. Again, that's something that's outside of my control and I shouldn't be picking a champion.

So I brought the same approach here in the sense that let's try to develop rules that create consistency that address the major issues that people are sharing with us in those consultations. And let's make sure that when a consumer says, share my data, if it's being done within The guardrails of the system that you have to answer, that, you have to answer that to that request.

And I think that's the great equalizer in the system.

Jeff Adamson: Yeah. Yeah. Everyone's treated the same. Correct. It's making it more about the consumer than it is about anyone else. I, I actually really like that. And, and so we, I, I mentioned earlier the sticking the landing on, on the framework implementation.

Canadians I feel like have a habit of like kind of looking in what, what else, what, what is everyone else doing around the world? And especially when it's [00:27:00] our neighbors down south and in the US. The CFPB, if I'm saying that right, they, they've recently come out and said fairly bluntly, listen, you know, an industry led approach isn't going to work and in Canada, we, there's, you can have industry led, uh, government led, we've talked about a made in Canada approach, which I think tells you really nothing about what it actually is going to be because it's not like we're going to take a made in China approach in Canada, uh, but I, I think everyone understands that it has to be made for the Canadian market, but I think even the, the U S.

You know, the CFPB is, is, has come out and said, like, listen, like we need to get this going, like they've actually enacted a right to basically jumpstart open banking. In the US and so I guess when, when they came out and I believe if I'm reading here correctly, they basically said that they proposed a rule would allow people to break up with banks that provide bad service and would forbid companies that receive data from misusing or wrongfully monetizing the sensitive personal financial data.

So when that [00:28:00] came out, I guess you were, you were still working on this file. I guess when you looked at that, did that change how you were thinking about it? Did it provide you more ammunition perhaps, given the fact that we all, we've been looking around the world at what other people are doing? No,

Abraham Tachjian: not ammunition.

I think by that point we had wrapped up the majority of the work that, uh, we were doing, uh, in terms of the industry consultations, in terms of wrapping up the framework, putting pen to paper and essentially saying, look, this is the design. I think there was validation and seeing our biggest trading partner, uh, acknowledge that you need to progress with the system with a degree of government involvement.

And that's something that I said publicly on a few occasions in the sense that the oversight of the system has to be managed by the government for a variety of reasons. So having the world's largest economy with a huge amount of banks come out and say, look, we need to also step in, we need to set some rules.

Some guardrails, I think kind of supported the approach that we were taking and fell in line with what you've seen in many other jurisdictions, right? I think typically the ones that grow the most. And it's still in the [00:29:00] early stages are the ones where you have more government involvement, particularly from a governance perspective, in the sense that they're overseeing the system, they say who gets in and they decide what type of data is being shared.

And again, these fundamental rules that provide clarity to players to be able to build up and participate in the system. I think the timing was pretty good. I know they were working on it because they hadn't made an announcement a year earlier at a conference that said essentially, You know, expect our consultation paper to come.

And I think they put out this huge 70 page consultation, which I read over the holidays. I remember when it came out. I mean, professionally, I love this stuff, but personally, I love this stuff as well. So anytime I have an opportunity to read about open banking, I do. But look, going back to your question, I think it really supported our thinking in the sense that you need a degree of government involvement.

Because otherwise this isn't gonna reach its full potential.

Jeff Adamson: Who's best positioned within the government to regulate this or oversee it? Is it a Bank of Canada thing? Is it an OSFI thing? Is it FCAC? And again, like your own recommendation aside, just as a consumer or [00:30:00] as someone who's a consumer. Who knows the banking industry?

Who do you think is actually best positioned to kind of run this from a regulatory perspective? Look,

Abraham Tachjian: uh, thankfully I don't have to answer that question. The government will have to, but if I'll put my consulting hat on the way I would assess it is in terms of an operating model. Like what are you doing on a day to day basis?

What are you trying to achieve? So from one perspective, You need to have an entity that maintains oversight of the system, right? It's keeping the players in check, if you like. These are the rules of the system. If you don't meet them, these are the consequences. So you need an organization that's empowered to do that.

Next, you need a degree of technical expertise. The way organizations are going to share information is through a technical standard. Essentially like a Bluetooth standard. That's how your headphones connect. to your laptop and to your phone. You need a government entity that understands how this develops, that it's not static, that you need to keep building this up, uh, whether it does it itself or relies on the industry, because there are solutions in the industry for this.

You need to have a degree of understanding to be able to keep oversight on it. [00:31:00] So that's another skill set that a governance entity needs to bring. Then you've got to be conscious of market developments, right? You can't stay static on a system. I think if you look at international benchmarks, When you have progress, it's when a government admits that this is the first stepping stone and we'll keep moving.

It becomes a little stale when you don't do that. So you need a governance entity that understands that this is day one. This is day one scope, but we need a roadmap to phase this, to increase this to other verticals. I'll give you an example. We've always talked about starting with a data approach to open banking.

Essentially in phase one, you would just be sharing information. Potential subsequent phases would have payment capabilities, which is really where you're going to leverage the system the most. If you look at numbers from other jurisdictions, like a hockey stick. The second you introduce payment capabilities into an open banking system, it goes through the roof.

Um, so this is another capability that they need to bring in. Just with these three alone, I think you've got a lot of good direction as to who should oversee the system.

Jeff Adamson: It's not super [00:32:00] clear cut because it does Kind of a tough job. Yeah. And I think, you know, to take a step back, I think it's, it's a very difficult thing to look at and say, Hey, this clearly falls within one because it does touch on a few different areas.

Cause it is an economic, it is a security, but then you have regulators who are responsible for banks. And, but then you also have people who are involved in banking activities. I mean, like Neo is technically not a bank, but we do a lot of bank like things. So we're not technically even regulated by OSFI, but then you have, you know, FCAC and, you know, You have the Bank of Canada, so it's not cut and dry.

Does it worry you at all, like, that because it doesn't fit into a clean box, and you're breaking new ground, that the government may look at this and just say, you know, this is a lot of work, the system's pretty stable. Canadians aren't running to the streets outside of parliament with pitchforks and, you know, torches storming the castle to kind of have this come in.

We got an election next year. Let's just kind of kick it down, down the road. Is that, is [00:33:00] that something that's on your mind? Not necessarily. I

Abraham Tachjian: think with the government's announcement in the fall economic statement, they've committed to move this forward. They've committed to creating a governance entity to maintain oversight.

And like I said earlier, the change in thinking also plays here in the sense that the industry wants this too, because I think there's a degree of, uh, open banking fatigue. If you'd like. I think we're at a point where we're really ready to move this forward, right? So I think you're going to get a lot of encouragement.

Jeff Adamson: We say

Abraham Tachjian: we mean everyone, Canadian banks, absolutely, absolutely. Banks, credit unions, fintechs throughout my engagement. Every single organization I spoke to, I got the sense that let's just get started. It doesn't have to be perfect. Let's just get the ball rolling. We've been talking about this so much and I get it.

I felt occasionally I was the open banking therapist because I sympathized. I have a seat. Lie down. Yeah. You know, tell me about your

Jeff Adamson: early days. What are you worried about? What are you worried about for open banking? I'll make you feel

Abraham Tachjian: better. I, I think that, um, that [00:34:00] messaging will come across. It is coming across.

Yes. So I'm not that worried about this kind of losing steam, if

Jeff Adamson: you'd like. I don't know how you've done this, Abraham. I'm just, because I'm just feeling about the role you're in or what you were in. You just got so many people. Like, what's the most ridiculous thing that you saw that where you're like, someone's like, listen, Abraham, If you were just to make a certain recommendation, like you might, there must have been some, some kind of just moments where you're like, wow, because so many people have a huge interest in having it done a certain way.

Were there moments where you're kind of just like pinch yourself, like, is this actually happening? Am I doing

Abraham Tachjian: this? I, I never got one of those. Um, because I think people.

Jeff Adamson: No, no golf court. No, no, no.

Abraham Tachjian: I think the stake dinners, , think the stakeholders I spoke to, uh, I think they already knew my background. I started as a lawyer.

I went to banking, got into the, got involved in FinTech, got into consulting, so I know the landscape pretty well. Yeah, right. I've, I've, I've dedicated a lot of my professional career. To understanding financial services, uh, [00:35:00] and being involved in it. You know, I can, I can see something coming from a mile away.

I'll, I'll, I'll leave it at that. And I think people understood that as well. So we had very, very frank discussions. In fact, one of the, one of the things that surprised me is degree of frankness. Degree of honesty that I had with people who I was speaking with. Who are going to be builders in the system, which I really appreciate it.

I think one of the concerns I had when I started this project is, because of the amount of time it had taken, I had to build a bit of credibility. Credibility with the consumers as to what we were doing in terms of transparency, in terms of progress, and credibility with everybody who I was saying, take time away from your work, come sit in these working groups, read all these materials that I'm going to keep sending you, and I'm going to keep asking you for your advice.

I felt like I really need to make sure that I have that credibility there. I spend a lot of time in the beginning of my mandate, just meeting with people, sharing my vision as to how we're going to engage them and doing a lot of, um, a lot of research in terms of the materials I would send them to say, look, read this because this is what I want to get out of it.

And this is [00:36:00] what we need to answer. And Oh, by the way, we're going to put this on a public website. So everybody sees what's going on. So everybody understands there's no backdoor deals happening here. I will show everyone the materials that we're reading in these groups, the questions I'm asking and the outcomes of them.

So That was a lot of effort, but I figured that effort would translate into credibility, which I think it did. And to come back to your question, I think it helped in my engagement in the sense that I wasn't getting BS. I was, I was getting direct concerns. I had stakeholders telling me, look, I like this, but I don't like this.

Or this is an issue for me. How do we solve it? And it helped me bring those conversations to various stakeholders to say, look, these are some of the concerns I'm hearing. How can we fix this? And I think the way we engage the industry and these working groups. the speed at which we did it, uh, the quality of the content, I think was unprecedented in government.

And I think that really helped move this forward.

Jeff Adamson: I don't think you're exaggerating. I mean, and again, not to pat you on the back too much, but I think the consultation process, again, I've talked to lots of different people about this. They all have kind of said that it was very [00:37:00] fair that you gave the right airtime to the right number of people.

Now the recommendation is kind of, With the government, when, when do you think if it was your choice and again, I know you're going to say, Hey, thankfully it's not your choice. It's other people's, but if it were your choice, when do you think we're ready for this? Do we need to wait 10 years or can this be done like

Abraham Tachjian: this summer?

Absolutely. We're already ready for it. You speak to every financial institution. They're all, they've been thinking about this for years. The muscle memory. I think that's the word is already there. It's there for consumers that use screen scraping to share data. It's there for financial institutions who are already building some of these products, right?

They're getting ready. They're making investments in infrastructure. They know this is an effort and they're not going to do this overnight. So they've already been working towards it. And I think from a policy perspective, we're at a point where we know what the issues are. We have an idea of how to solve them.

It's just a question of getting the ball rolling. So I think we're ready. We've been ready for years. And I think we're good to

Jeff Adamson: go. You got an amazing career, [00:38:00] but if you were to go back in time and talking to, let's say, 18 year old Abraham, what advice would you give

Abraham Tachjian: him? First thing I would say is maybe consider picking a different team than the Bills.

It's a lot of suffering for no reason. That's the one thing I would say. The other piece of advice I would give myself is, um, don't get discouraged. Um, I started as a lawyer in a tough economic time. Around 2007, 2008, where you had this boom and then everything literally blew up. I remember one summer, my brothers and I went to New York and we took a picture in front of, um, a bank that collapsed eventually.

And it was such a shock and professionally, it was a difficult time. So the advice I would give myself is. Stay resilient, stay on the plan, it's going to be difficult, but if it was easy, anybody could do it. Great

Jeff Adamson: advice. When I say the word Abraham, in banking, people know who I'm talking about. [00:39:00] So lucky me.

I think you have lots to be, if people could do what you've done in your career, I think it's exceptional because you literally, you've done it. Have become the authority on open banking and maybe I think it's a lot more broad than that actually so I just want to say thanks for the work that you've done and on the file I think that it's we're excited for it to come whatever it may be whenever it may come.

Um, because I think it is a great, uh, service to Canadians. Uh, and I think it's going to be historic when it does happen. It's the beginning of something, whatever it might be. And I think it takes a lot of courage to be the person who puts their hands up to do that. Uh, no, I mean it because, you know, going in, you never know what's going to happen and you never know what type of reaction you're going to get.

All the, the voices and influences and stakeholders, like an impossible job to do. Perfect. Good. And I think you've done it elegantly. Uh, I think you've done it in a way that was fair. Uh, and as a Canadian, as someone [00:40:00] who's working in banking, uh, I'm extremely grateful for you doing that and also grateful for you taking your time to come and chat with us today.

Abraham Tachjian: It's my pleasure. I think I'm going to trademark the authority on open banking. I may take that from you. Well, I took it from you. It's on your LinkedIn. You're right. You're right. That's why

Jeff Adamson: it sounded like such a good idea. I was going to basically, I was going to actually open with that because, but then I was like, I didn't want you to like feel awkward about, I was like, listen, I saw this on LinkedIn.

So that's how I know it's true. Good. Good. Thanks for propping that up.

Thank you for tuning into behind the brand. If you enjoyed today's show, please subscribe and leave a review on your preferred podcast platform. And if you're interested in learning more about neo financial, visit our website. Visit us at neofinancial. com behind the brand is production of neofinancial and media lab YYC hosted by me, Jeff Adamson, strategy research and production by Philippe Burns, Dario Becher and Kyle [00:41:00] Marshall.