Why Canada Needs to Go Beyond Open Banking

Open Banking Framework Announced for 2026

Canada is finally moving towards a more secure banking system. The government has announced a new framework for open banking, set to launch in 2026. This system will replace the risky practice of sharing online banking passwords with third-party apps. Instead, users will be able to securely share their data with accredited services. This is a big step forward, but it's not enough.

The Risks of Screen Scraping

Right now, millions of Canadians use third-party apps to manage their finances. These apps often require users to share their banking credentials. This practice, known as screen scraping, is risky. It leaves users vulnerable to data breaches and can strip away liability protections. The new open banking framework aims to fix this by providing a safer way to share data.

The Need for Open Finance

However, open banking alone won't address the bigger picture. Most financial decisions involve more than just day-to-day transactions. For families, it's about mortgages, insurance, and retirement savings. For small businesses, it's about accounting, payroll, and receivables. A narrow focus on banking data could create a two-tier system where some data is portable, and some remains locked away.

This is where open finance comes in. Open finance expands the idea of secure, consent-based data sharing to a wider range of financial products. It would allow Canadians to move their verified financial history when switching providers for mortgages, insurance, investments, or business credit. This would make it easier for people to compare offers and switch to better deals.

Global Examples and Lessons

Other countries have already started down this path. The United Kingdom, for example, has seen millions of active users and tens of millions of open banking payments each month. In Australia, a broader consumer data right covers banking and is expanding into other sectors. Canada can learn from these experiences and design an open finance roadmap that fits its own needs.

Key Areas for Success

To make this work, Canada needs to focus on three key areas:

1. Scope should follow affordability: The next stage should focus on areas where price and access issues are most acute, such as mortgages, insurance, and retirement savings for consumers, and working capital and payments data for small and medium-sized enterprises.
2. Governance and liability need to be clear: Rules for open finance should spell out who is liable for what, and create a single point of redress for individuals and businesses.
3. Competition and inclusion must be built in: Rules should ensure that accredited credit unions, fintechs, and other challengers can access data on fair terms.

Avoiding Market Concentration

At the same time, policymakers need to guard against shifting concentration from big banks to big technology. Strong consent rules are needed to prevent new forms of market power and discrimination. There is also a need for public debate. The risks of data sharing are already here, but a governed system with enforceable standards is better than unregulated, opaque practices.

The Road Ahead

The 2026 open banking launch is just the first step. By setting out an open finance roadmap now, focused on scope, governance, and competition, Canada can ensure that the next phase of reform delivers more choice, better prices, and a system that works for people and businesses, not just for institutions.