Financial leaders in Canada discuss and outline potential paths for the evolution of Open Banking.
Canada is poised to revolutionise its banking sector with the adoption of open banking, a consumer-centric approach that promises better lending decisions for small businesses and more accurate credit models for consumers. However, the country faces several key challenges in implementing this transformative technology.
One of the main obstacles is the lack of a formal regulatory framework. Despite consultations starting in 2018, Canada still lacks a finalised regulatory framework for open banking as of mid-2025. This uncertainty slows industry progress and risks the country falling behind global peers like the UK, Australia, and India. To address this, the government aims to implement open banking legislation by early 2026, with the Financial Consumer Agency of Canada (FCAC) playing a central role in oversight.
Political events such as federal elections and government transitions in 2024-2025 have also delayed legislative action. Industry leaders note a lack of clarity on the future direction of consumer-driven banking in Canada, causing concern about getting stuck in endless consultation loops.
Another challenge is low consumer awareness and trust. Research shows only about 9% of Canadians are familiar with open banking, with awareness especially low among seniors, lower income groups, and women. Additionally, many consumers do not understand how open banking works or its benefits, and a majority express concern about older data-sharing methods like screen scraping.
Ensuring Canadians’ financial data is secure and that consumers are protected and informed is critical. Without strong cybersecurity, privacy safeguards, and clear consumer rights, trust in open banking cannot be established.
To overcome these challenges, several solutions have been proposed. Developing a robust accreditation system and trustmarks will help consumers identify authorized participants, bolstering confidence and transparency in the ecosystem. Comprehensive consumer education campaigns will raise awareness and demystify open banking for Canadians, explaining how it can offer more control, choice, and confidence in financial management.
The regulatory approach emphasises not only safeguarding consumers but also enabling them to leverage open banking tools to reduce costs and improve financial outcomes, thereby fostering innovation and competition in the financial sector.
Industry experts also call for investment in developer experience, stating that robust developer portals with sandbox environments, automated onboarding, clear documentation, and fast feedback loops are necessary for third parties to build on APIs.
The panellists emphasised that innovation, not just compliance, must drive Canada's Open Banking conversation. External-facing APIs must meet the same rigorous standards of availability and security as online banking platforms.
Open Banking can unlock economic value across sectors like insurance, healthcare, tourism, and beyond. Shekher Puri, vice president of digital components and platforms at RBC, stated that Open Banking will "supercharge" existing digital offerings and unlock new value pools, emphasising that platform evolution must be API-first and event-driven.
The journey from idea to impact, compliance, and capability in Open Banking is not far away. Banks in Canada are laying the groundwork for an Open Banking future by architecting scalable API platforms and building internal alignment across risk and engineering teams.
In conclusion, Canada’s journey toward consumer-directed open banking is at a critical juncture. Success depends on accelerated regulatory action, building consumer trust through security and transparency, and robust education to enable Canadians to harness the benefits of open banking fully. The future of Canadian banking is open, and it's coming soon.
- A lack of a formal regulatory framework for open banking in Canada remains a significant obstacle, hindering industry progress and putting the country at risk of falling behind global peers.
- To establish consumer trust in open banking, it's crucial to ensure financial data security, implement privacy safeguards, and define clear consumer rights.
- To raise awareness and increase consumer understanding of open banking, comprehensive education campaigns and the development of a robust accreditation system are essential.
- Industry experts propose investments in developer experience to help third parties build on APIs efficiently, emphasizing that innovation, not just compliance, should drive Canada's open banking conversation.
- The penetration of open banking in Canada is low, with only 9% of Canadians aware of the concept, particularly seniors, lower income groups, and women.
- Open Banking has the potential to unlock economic value in various sectors, such as insurance, healthcare, tourism, and beyond, according to Shekher Puri, vice president of digital components and platforms at RBC, who stated that it will "supercharge" existing digital offerings and unlock new value pools.
