Canada prepares for open banking

Yahoo News · Oct 7, 2025

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Canada prepares for open banking

Canada’s Finance Ministry has been holding discussions with stakeholders for several years about introducing open banking, which uses secure application programming interfaces (APIs) to share consumers’ financial information.

In June 2024, the House of Commons passed the Consumer-Driven Banking Act which included the foundational elements of scope and technical standards for open banking and designated the Financial Consumer Agency of Canada (FCAC) as the lead open banking regulatory agency. In its 2024 Fall Economic Statement, the government said it intended to introduce legislation for the remaining elements of the Consumer-Driven Banking Framework, including accreditation and common rules covering national security, liability, and privacy.

Department of Finance spokesperson Marie-France Faucher stated that the government is committed to establishing a consumer-driven banking framework that fosters a competitive and innovative financial sector. “The remaining elements of the Consumer-Driven Banking Framework will be introduced at the earliest opportunity to ensure Canadian consumers and business can securely benefit from tools helping them reduce costs and improve their financial outcomes,” she said.

Objectives

The government’s open banking framework has three objectives:

Dan Broten, SVP and Head of Canada’s EQ Bank, said: “Since the first part of the open banking legislation was introduced last Fall, we’ve participated in consultations with the government. But we still await the critical second piece of open banking legislation that will let us proceed with implementation. We hope this comes soon – ideally as a part of the 2025 Fall Economic Statement – and with a clear comprehensive framework allowing FIs to put it into action in a meaningful way.”

Broten mentioned the expectation that the government will provide an update on the second part of the open banking legislation this Autumn alongside the Fall Economic Statement. “We hope it releases a comprehensive implementation plan (including draft regulations) allowing a meaningful rollout of open banking to unlock its full potential.”

Victoria Mainprize, VP, Policy and General Counsel at the Canadian Credit Union Association, noted efforts regarding data security by the federal government to minimize duplication between federal and provincial regulations.

Atul Varde, Chief Information and Payments Officer at Servus Credit Union, expects to see guidance regarding open banking timelines in the autumn 2025 Federal Budget. “I recall seeing indications earlier this year to expect an ‘early 2026’ launch timeline. Canada will want to differentiate itself in the new geopolitical environment vis-à-vis the US and not delay our open banking launch any further.”

Steve Boms, the Financial Data and Technology Association’s (FDATA) executive director, warned that while Canada has laid the groundwork for open banking, further delay risks importing the dysfunction seen in the US. “A national regime allowing competition to flourish is essential to phase out outdated practices.”

Preparations

EQ Bank’s Broten said the online bank has been preparing for open banking for years, with a digital platform ready to adapt once framework details are available. “The most challenging work was the foundational technology changes made over the past decade,” he explained.

Broten said that, while open banking API usage is limited in Canada, there are examples of financial services implementing open APIs without an overarching framework. “Many larger banks have made public announcements on their collaborations with various aggregators to provide their customers with access to other apps outside of the bank,” he said.

Since 2022, EQ Bank has partnered with Flinks, integrating its Flinks Outbound data-sharing technology. Celina Philpot, Conexus Credit Union’s CEO, shared her focus on preparing for open banking through data and cybersecurity. “We’re considering industry-leading solutions such as the Large Credit Union Coalition’s (LCUC) Caspian One open banking platform,” she said.

Varde said Servus has been implementing APIs that comply with the Financial Data Exchange’s (FDX) financial data-sharing API standard.

Benefits

EQ Bank’s Broten said that as Canada follows other countries in implementing open banking, it will adopt many proven use cases. “It remains to be seen whether and when open banking could be used for payments initiation,” he said. “For example, if Bank A can read a customer’s account balance from Bank B, it could increase trust around the availability of funds.”

Broten added that open banking will spur innovation beyond obvious cases, as financial institutions learn from data usage.

Benefits of Consumer-Driven Banking

Source: Department of Finance, Canada

Recommendations

The Canadian Bankers Association’s recommendations for a consumer-driven banking framework with read access, initially enabling approved service providers to only receive consumer financial data with consent:

- A Hybrid Model: Embraces a principles-based approach drawing from industry expertise.
- Consumer Protection: Ensures consumers receive consistent protections.
- Prohibit Screen-scraping: Safeguards consumers from risky practices.
- Reciprocity: Requires all participants to adhere to reciprocity, empowering Canadians.
- A Fit-For-Purpose Entity: A proper governance entity to supervise the framework.
- Efficient Implementation: An effective consultative approach and a clear timeline.
- Accreditation Framework: Encourages common rules fostering consumer trust.
- Regulatory Harmonisation: Avoids duplicative obligations for a consistent experience.
- A Single Technical Standard: A principles-based, market-driven approach to standards development.

This article has been published in retailbankerinternational.com via Yahoo News.