Canada has been lagging on adopting open banking frameworks for years, critics have been lamenting.
In 2024, the government finally began making progress toward open banking.
But Canadians may still have a couple more years to wait.
In Canada’s latest annual economic outlook, the government made strides toward what it brands “consumer-driven banking.” The 2024 Fall Economic Statement confirmed Canada’s intent to introduce legislation for the remaining elements of the nation’s consumer-driven banking framework, including accreditation and a set of “common rules” that will cover national security, liability, and privacy.
Open banking enables consumers to securely use data-driven financial services that can help them better manage their finances. The key goal of Canada’s consumer-driven banking framework “is to ensure that the financial data of Canadians and small businesses is shared safely and securely.”
The Department of Finance, recently shook by the abrupt departure of federal minister Chrystia Freeland, is focused on three public policy objectives: the continued safety and soundness of the financial sector by addressing security risks; the consumer right to access and use their financial data to improve their financial outcomes; and the establishment of a cohesive framework to support the stability of the Canadian financial sector while enabling innovation and competition.
Building on an initial framework in Budget 2024 and the Consumer-Driven Banking Act that passed in June, the Financial Consumer Agency of Canada will appoint a new position: the Senior Deputy Commissioner of Consumer-Driven Banking.
Legislation will also establish permanent federal, provincial, and territorial advisory committees to inform the Senior Deputy Commissioner of FCAC’s work on administering and implementing the framework.
The Department of Finance says it will continue its work with the FCAC to implement new responsibilities, while the FCAC will develop a consumer education campaign to increase Canadians’ currently low awareness of consumer-driven banking.
Moving forward, the Department of Finance will “engage closely with all implicated stakeholders and Canadians” to “support [the] successful launch” of open banking in Canada.
Patience will be a virtue, however, as the federal government is not aiming to launch this consumer-driven banking framework until 2026.
Leave a Reply