The federal government says it will present legislation to implement open bank In his “first opportunity”, some defenders warn that the momentum of the project may have blocked.
Open bank – or banks focused on consumers, as Ottawa – consists of allowing Canadians and companies to share their financial data safely with third parties other than their banks.
Open Banking could allow Canadians from several accounts between different banks to see their whole financial image on a practical dashboard. He could also help tenants build their credit ratings just by paying their rents in time every month.
Other nations have implemented open banking systems and federal liberals adopted initial legislation last year to innovate on open banking services in Canada.
But to reach this point – and maintain the pressure to obtain the second half of this registered legislation – was “a SLOG,” said Alex Vronces, executive director of Fintechs Canada.
“I don’t think the government first understands what the consumer-based bank was,” he said.
After years of study, Ottawa rolled the ball on the bank open through the legislation to implement the federal budget of 2024 about a year ago.
This bill gave the Financial Consumer Agency of Canada a mandate to direct the country’s open banking framework. The legislation is always required to implement a plan to accredit service providers and establish the common rules that financial institutions will have to follow.
The Liberal Government said in the autumn economic declaration in 2024 that it envisaged the beginning of 2026 for the implementation of the open bank.
But Canada has experienced a federal election since these plans were made – and although the Liberals have been returned to power with another minority government, references to consumers focused on the party’s electoral platform.
And the government of Prime Minister Mark Carney did not file a spring budget, which he would normally use to describe his legislative priorities.
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Natacha Boudrias, head of the open banking strategy of the National Bank of Canada, said that the industry lacked “clarity” on the future form of the consumer -based bank. She said the spring elections had probably blocked the movement on the file.
“We certainly hope that the government will launch the effort as soon as possible so that we will not be stuck in a consultation loop,” she said.
A finance official Canada said in a media statement that the government was still attached to the consumer -focused bank.
“The remaining elements of the consumer -focused banking framework will be introduced in the first opportunity to ensure that Canadian consumers and businesses can safely benefit from tools that help them reduce costs and improve their financial results,” the press release said.
Instead of waiting for Ottawa, the National Bank has progressed on its own bank manager which allows fintechs – financial technology companies that develop applications for Canadians and businesses – mainly connect to their databases to share information safely when users give their permission.
The status quo for the sharing of financial data is the “scratching of screens”, a process which generally sees an individual sharing of banking identification information with a third party to access the information whose application must execute.
But Boudrias said that there was no control over the quantity or the little data shared by screen scratch – all or nothing, which makes it a potential confidentiality nightmare.
Open Banking ideally takes this data fire hose and narrows it, giving users the control of the information that a fintech sees and how long it can access it.
“It’s about setting up trusted rails,” said Boudrias.
The Consumption Financial Agency for the Canada Commissioner, Shereen Benzvy Miller, addressed the risk scratch risks in tickets for her opening speech to Open Banking Expo on Tuesday.
Benzvy Miller said Canadians are already largely sharing data with Fintech, but they may not know much about the risk of confidentiality involved. She said that part of the agency’s task will be to stimulate awareness of the consumers of the open bank to strengthen confidence.
“We are considering a future – not far away – where consumers can safely share their financial data with trust suppliers at the forefront of a button,” she said in a copy of the Speech shared with the Canadian Press.
The Consumer Financial Agency for Canada will be in charge of building and verifying a public fintech register to which Canadians and financial service providers can trust to manage data safely. These fintechs will receive a practical visual logo to mark their accreditation.
Benzvy Miller said that the agency also works with Finance Canada on the creation of common rules for the system and that the agency was impatient to see legislative changes to the Minister of Finance.
But if this final legislation is not filed soon, said Vronces, the agency will be stuck in the “regulatory purgatory”.
“They will have a mandate, but they can do nothing,” he said.
Arriving at this point has been a long term for Vronces, which has been lobbying on behalf of the Canadian Finchs for about seven years.
He said he had reasons to believe that Carney will be a consumer -based bank champion. Carney was governor of the Bank of England when the United Kingdom introduced such a system in 2017.
The possibility of implementing the open bank is a pivotal moment, said Vronces, while Carney seeks to revise the Canadian economy and improve productivity in the face of world commercial upheavals.
Open banks could light a fire in the Canada financial sector, he said, because large banks would be forced to diversify their services and compete with the larger fintech industry.
Vronces said the first conversations with the federal government give him the hope that the second half of the legislation will soon be filed, perhaps alongside the federal budget in the fall.
He compared the bank file open to a magazine which has already had the written articles and the layout, with only a few remaining finishing keys.
“It is really not much work for the government to end its promise,” he said. “He just needs to hit the impression.”
& Copy 2025 the Canadian press