Open banking
Open banking is poised to radically modernize financial services in Canada, affording consumers greater control over their financial data while fostering innovation, collaboration and competition across the industry. Ottawa has recognized the benefits of a formal open banking framework, having closely monitored the approaches of other G7 countries, and has pledged to have one implemented by 2025.
Canada's foray into this area began in 2018 with the formation of an Advisory Committee on Open Banking. In June 2023, this committee released its Final Report, highlighting key considerations and recommendations toward a formal legislative framework in Canada.
The challenge for Ottawa is striking the right balance between promoting innovation and competition while safeguarding consumer interests. Even the least constrictive approach to regulation, however, will need to offer robust risk-management strategies with respect to data privacy, security, consent and liability if open banking is to obtain the public buy-in needed to succeed. Educating consumers will also be key to adoption.
The government's Policy Statement on Consumer-Driven Banking offers a glimpse into how it plans to strike this balance, including by creating an independent "government-led" oversight body (a notable departure from the Advisory Committee's recommendation for a hybrid oversight body with industry participation).
These forces are shaping a vibrant commercial landscape ahead for creators, purchasers and providers of financial services technology – so long as they can stay one step ahead of the evolving regulatory environment – as well as for the financial institutions responding to these changing market forces. Contact a member of our team to learn how your business can position itself for success in this new age of financial services.
Budget 2019 reconfirms government interest in Open Banking
Financial services sector announcements in 2023 Fall Economic Statement
Ottawa is set to unveil its open banking framework in Budget 2024. Here are five things banks and fintechs will be watching closely
Budget 2024 introduces Canada’s Consumer-Driven Banking Framework
4 things on Bay Street's budget radar | Parna Sabet-Stephenson and Alana Scotchmer quoted in the Financial Post
What open banking means for Canada's saturated banking market | Parna Sabet-Stephenson quoted in Reuters
Canada's foray into this area began in 2018 with the formation of an Advisory Committee on Open Banking. In June 2023, this committee released its Final Report, highlighting key considerations and recommendations toward a formal legislative framework in Canada.
What's next?
In the 2023 Fall Economic Statement, the federal government – following a series of delays and industry calls for action – committed to introducing an open banking legislative framework as part of the 2024 federal budget. The budget, expected to be released on April 16, will set the stage for what the legislation will encompass, with the draft legislation itself expected in the fall in connection with a second budget implementation act.The challenge for Ottawa is striking the right balance between promoting innovation and competition while safeguarding consumer interests. Even the least constrictive approach to regulation, however, will need to offer robust risk-management strategies with respect to data privacy, security, consent and liability if open banking is to obtain the public buy-in needed to succeed. Educating consumers will also be key to adoption.
The government's Policy Statement on Consumer-Driven Banking offers a glimpse into how it plans to strike this balance, including by creating an independent "government-led" oversight body (a notable departure from the Advisory Committee's recommendation for a hybrid oversight body with industry participation).
Get ready
An open banking framework will give fintech companies and other third-party providers a solid platform upon which to develop pioneering financial service solutions and enhanced financial management tools. For banks and credit unions, open banking will open up the competitive playing field in a way they have never experienced, while also laying the foundation for creative partnership and collaboration opportunities.These forces are shaping a vibrant commercial landscape ahead for creators, purchasers and providers of financial services technology – so long as they can stay one step ahead of the evolving regulatory environment – as well as for the financial institutions responding to these changing market forces. Contact a member of our team to learn how your business can position itself for success in this new age of financial services.
Learn more
A timeline for the development of open banking in CanadaBudget 2019 reconfirms government interest in Open Banking
Financial services sector announcements in 2023 Fall Economic Statement
Ottawa is set to unveil its open banking framework in Budget 2024. Here are five things banks and fintechs will be watching closely
Budget 2024 introduces Canada’s Consumer-Driven Banking Framework
In the news
'Open banking' is here to stay, but regulatory regime needed to make it safe: Gowling lawyer | Parna Sabet-Stephenson quoted in Canadian Lawyer4 things on Bay Street's budget radar | Parna Sabet-Stephenson and Alana Scotchmer quoted in the Financial Post
What open banking means for Canada's saturated banking market | Parna Sabet-Stephenson quoted in Reuters