Amid Industry Pressure, Canada Moves on Open Banking Legislation

Plans for legislation in early 2024 include a road map for financial services data-sharing and a collaboration with Payments Canada  

In a recent open letter, 150 CEOs in Canada’s tech sector are calling on governmental leaders to make good on their stated support for open banking. The Council of Canadian Innovators (CCI) argues that despite the government’s promise to pursue open banking by 2023, the country now lags behind others, most notably the UK and EU. “Open banking in Canada is long overdue,” says Nicholas Schiavo, CCI’s director of federal affairs, in the Financial Post. “Every single day that we delay a modern, secure financial system, we are in effect putting a tax on Canadian businesses, and Canadians themselves, who are paying more for an antiquated system.” 

Starting out as a significant trailblazer in open banking, Canada has since slowed its progress following the 2021 release of the Advisory Committee on Open Banking report, which was to set the stage for the country’s rollout by the end of 2023. Amid mounting pressure from the tech sector and consumer advocates, the government announced in its Fall Economic Statement on 21 November its commitment to “consumer-driven finance” and plans for legislation in early 2024 to include “a road map to guide financial services data-sharing and collaboration with Payments Canada, the country’s existing payment clearing and settlement system,” according to American Banker 

At the same time, technology companies are readying their organizations for open banking when the country makes its priorities known. “We are open banking ready,” according to Sonny Singh, executive vice president of Oracle Financial Services. Singh was speaking at SIBOS in Toronto in September, where “fintech, financial firms and tech companies gathered to discuss sustainable finance [and] risk management in an unpredictable landscape,” according to Reuters. Singh said, “From a technology perspective, this is about having banking applications that are exposed through API and have a robust mechanism of monetization,” allowing consumers to securely transfer financial data.  

Despite the delay, government officials point out that Canada’s banking system is one of the world’s most secure and stable. Acknowledging that the current status quo is not sustainable, deputy minister of the Finance Michael Sabia said in May he “recognized techniques like screen scraping were not secure or efficient,” according to the Globe & Mail. But “the flip side is the resilience, the stability of Canada’s financial system, which is a bedrock of how our economic system works,” he said. “In an environment where there’s been a lot of turbulence, whether in the European or North American market, the stability of our institutions is a really important competitive advantage for Canada.” 

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