Open banking has been an evolving topic in Canada, mirroring global trends where countries such as the UK, EU, and Australia have advanced their frameworks and are now exploring further enhancements. This report examines the unique implications, challenges, and opportunities presented by the open banking landscape for Canadian financial institutions in the context of the 2024 Fall Economic Statement and the larger global environment providing a comparative perspective on Canada’s progress and potential pathways forward.
In an effort to advance its open banking journey, the federal government announced The Consumer-Driven Banking Act (the Act) in its 2024 budget, and made subsequent commitments in its Fall Economic Statement, aiming for implementation by 2026. Canada’s framework, which includes oversight by the Financial Consumer Agency of Canada (FCAC), covers a wide range of financial services beyond deposit accounts, such as credit cards, loans, and investments. However, it excludes write APIs, like payment initiation, which are critical features in more advanced systems like those in the UK and EU. Additionally, the prospect of the Financial Data Exchange (FDX), a U.S.-based company, becoming the technical standard-setting body raises concerns over the Canadian system’s autonomy.
Moreover, there is an opportunity for Canada to develop open data frameworks that extend beyond the financial sector. By considering interoperable frameworks across various industries, Canada could create powerful synergies that deliver extensive benefits to both citizens and businesses. This approach would involve developing advanced consent management systems, rigorous data standards, and robust security protocols, potentially leapfrogging Canada to the forefront of global data portability and integration.