Frontiers in Tech
Issue #4 | July 2026
By: Billy Truong, Margi Pandya
Open banking promises to do for financial data what number portability did for phone plans: let consumers take their information with them and force established players to compete for their business. Canada has spent nearly eight years moving toward this system. In 2026, it finally enacted legislation (Consumer-Driven Banking Act [CDBA]), a regulator (Bank of Canada [BoC]) and a roadmap. This is good news as Canada has been slow to get the initiative off the ground and has fallen behind some international peers.
What is open banking?
Open banking is a regulatory and technical framework that lets consumers and small businesses securely direct their own financial data, account balances, transaction histories and product details to selected third-party providers, such as financial technology (fintech) apps, budgeting tools, lenders or comparison services. For example, open banking enables customers to aggregate accounts from different banks into a single interface and quickly compare financial products to find the best interest or mortgage rates available. Instead of handing over banking passwords to a third party (a practice known as screen scraping), the data moves through standardized, bank-supervised application programming interfaces (APIs) with the customer’s explicit, revocable consent.
Beyond improving consumer choice and convenience, the development of an open banking framework could also create new opportunities for Canada’s fintech sector, including a growing cluster of firms in Western Canada. Among the first 300 entities fully registered as payment service providers (PSPs) by the BoC in October 2025 were Calgary-based Helcim and ZayZoon, as well as British Columbia-based VoPay and Peloton Technologies.
Most open banking frameworks consist of two stages: read access (sharing account information) and write access (initiating payments or moving funds on the customer’s behalf). When the scope expands beyond banking to include investments, insurance, pensions and mortgages, the concept is usually called open finance. The policy rationale is consistent across countries: reduce the cost and friction of switching between financial institutions, increase competition against large incumbent banks, replace insecure screen-scraping with regulated data-sharing and give consumers more control over information that is, legally, theirs.
Canada’s banking and payments landscape
Canada’s financial system is unusually concentrated. Six large banks, namely Royal Bank (RBC), TD Canada Trust (TD), Bank of Nova Scotia (Scotiabank), BMO Bank of Montreal, Canadian Imperial Bank of Commerce (CIBC) and the National Bank of Canada, dominate retail banking, alongside a network of credit unions. This concentration has historically limited price competition and made it difficult for consumers to switch institutions. It has also been a challenge for fintechs to plug in to the banking system unless they used informal, insecure data-sharing arrangements. An estimated nine million Canadians already use screen-scraping tools for budgeting, tax preparation or lending decisions, which exposes them to security and liability risks that regulated open banking is designed to eliminate.
Payment infrastructure is also modernizing. Payments Canada is building an instant-payment system, called Real-Time Rail (RTR), that acts as a precondition for the write access phase of open banking since payment initiation requires settlement infrastructure that can clear and finalize funds instantly and continuously.
Recent developments
Canada’s open banking initiative, officially termed consumer-driven banking, has moved from consultation to legislation over the past two years, with the foundational structure being established through the CDBA. In 2025, the government confirmed oversight of the framework was transferred from the Financial Consumer Agency of Canada to the BoC. The BoC was chosen for its independence, national reach and existing regulatory role under the Retail Payment Activities Act.
The 2025 federal budget allocated roughly $19.3 million to support supervision, security safeguards and fraud monitoring, with the Royal Canadian Mounted Police (RCMP) and Canadian Security Intelligence Service (CSIS) assisting on cyber and fraud threats tied to data sharing. The remaining legislative pieces, such as accreditation criteria, common rules and enforcement powers (including penalties of up to $10 million), were tabled in Bill C-15, the Budget 2025 Implementation Act, No. 1, which received royal assent in March 2026.
The government’s roadmap envisions two phases. Phase 1 (read access) was originally targeted for early 2026 and would allow accredited third parties to pull account data with consent. Phase 2 (write access) is targeted for mid-2027 and would enable payment initiation and account switching once the RTR is operational.
On June 27, 2026, the Department of Finance published proposed Consumer-Driven Banking Regulations in the Canada Gazette, Part I, opening a 60-day consultation period that closed Aug. 26, 2026. The regulations indicate that implementation of the full framework will follow a phased rollout beginning with accreditation requirements, then common rules and assessment fees will be phased in. The full framework is intended to come into force within one year of final publication in the Canada Gazette, Part II. This cautious approach followed earlier remarks by Ron Morrow, the BoC’s executive director overseeing the file, that the central bank is still in an “information-gathering” phase and called it “premature and ill-advised” to commit to a date before the technical standards, consent protocols and accreditation processes are finalized. The Competition Bureau, a law enforcement agency that ensures Canadian businesses remain competitive, has publicly urged faster action, arguing that the delay is costing consumers through higher prices, less choice and slower fintech innovation.
International comparison
Canada is a comparatively late mover. The United Kingdom pioneered mandated open banking in 2017, when the Competition and Markets Authority (CMA) ordered the nine largest banks (the CMA9) to build standardized APIs. The U.K. ecosystem, run by Open Banking Limited, now serves more than 15 million users and is expanding into variable recurring payments and e-commerce. Australia took a broader approach through the Consumer Data Right (CDR), which extends data-sharing rights beyond banking and into energy. Eventually, the CDR will apply to other sectors as well, though adoption has been slower than hoped, and the government has since scaled back some compliance requirements. Brazil has built one of the world’s largest open finance ecosystems, already extending into insurance.
Canada’s first step toward open finance
Canada’s open banking framework now has a legal foundation and a designated regulator in the BoC, but unlike the United Kingdom, Australia or Brazil, it still lacks a confirmed operational launch date. The coming months will determine whether Canada narrows the gap with peer G7 economies or continues to trail them, especially as the BoC finalizes technical and accreditation standards and the RTR.
Infrastructure shifts often start slow but broaden in scope over time as institutions, consumers and regulators gain experience with the underlying framework. Canada’s cautious approach in implementing open banking can be seen as a first step toward a broader open finance regime rather than an end point.
This issue of Frontiers in Tech was written by Billy Truong, a Canada West Foundation summer intern, and Margi Pandya, a policy analyst. If you have any developments you’d like to see featured or topics that you think should be covered, please send them to Margi Pandya, at pandya@cwf.ca.