Open Banking & Data Sharing in Canada

What is Open Banking?

Open banking, or consumer-driven banking, lets individuals securely share their financial data with approved institutions, giving them more control and access to innovative products and services. It’s designed to encourage competition and create opportunities for fintechs like Wealthsimple and Wise, as well as banks and lenders offering regulated financial products. Beyond fintechs, participating entities will likely include entities that offer deposit accounts, investment accounts, payment products, loans, and other regulated financial products and services.

While countries like the UK and Australia have already adopted open banking to simplify data sharing between banks and fintechs, Canada is still finalizing the framework under the Consumer-Driven Banking Act. Once implemented, the Financial Consumer Agency of Canada will maintain a public registry of all approved participants.

How open banking works

Open banking allows consumers to connect their bank accounts to secure financial apps and tools that help them manage their money. By authorizing their banks to share data through a protected online channel without revealing usernames or passwords users can safely access personalized financial insights while reducing risks of fraud or data breaches.

Benefits of open banking

Open banking delivers value for consumers, small businesses, and the broader economy.

Consumers: Gain secure access to more financial tools, greater control over their data, and better financial outcomes.

Small Businesses: Benefit from faster loan approvals, lower administrative work, and smoother integration with accounting, tax, and payroll software.

Economy: Encourages innovation, strengthens the financial sector, and boosts Canada’s global competitiveness.

Current practices: Screen scaping

Since Canada doesn’t yet have a secure data-sharing system, many fintech apps rely on screen scraping, a risky process where users share their banking usernames and passwords so apps can access account data. While this mimics open banking, it raises serious privacy and security concerns. Users can lose control over their information, face potential fraud or data breaches, and may not be protected by their banks if issues arise.

Canada's open banking framework

Open banking is set to launch in Canada in early 2026 under the new Consumer-Driven Banking Framework, introduced in Budget 2024. The Consumer-Driven Banking Act, passed in June 2024, outlines key standards, scope, and governance, naming the Financial Consumer Agency of Canada (FCAC) as the lead authority. The framework’s core goal is to ensure safe, secure financial data sharing for Canadians and small businesses while enabling access to innovative financial tools.

Whats New & Where we stand TODAY:

The government aims for full rollout by early 2026, though no official launch date has been set. However, several key elements are still missing such as accreditation rules for fintechs and money service businesses, liability frameworks, standardized APIs, and a public registry of participants.

In the meantime, some banks are taking the lead; for example, National Bank of Canada has developed a secure data-sharing API with its partner Flinks. The fintech sector remains cautiously optimistic but continues to raise concerns about slow progress, unclear regulations, and the overall pace of implementation.

To read more about the government's policy objectives and governance framework please refer to this link from 2024: 2024 Fall Economic Statement: Canada’s Complete Framework for Consumer-Driven Banking

404 Fund Take:

Here’s how I see this playing out and what it means from my lens:

• Big opportunity window: The 2026 target means the market still has ~12 months of “pre-rollout” runway. That’s time for startups to build, test, partner, and position themselves.

• Heavy winners & losers: Whichever fintechs (or banks) build the best infrastructure, trust frameworks, and user experience will gain scale. Others may get squeezed.

• Infrastructure over hype: This isn’t just feature-apps (budgeting, dashboards); the underlying plumbing (APIs, consent engines, data security) is where value will lock in. For you, that suggests investment or entrepreneurial focus should tilt to the “platform layer”, not just the front-end.

• Risk of delay: The roadmap is still uncertain. A government pivot or slower rollout could delay monetisation. That adds execution risk.

• Banks as adversaries & partners: The large incumbents (Big 6) will defend their data & deposit franchises, but also partner/enable fintechs. A winning strategy may be collaboration, not just disruption.

We will be betting on startups that focus on infrastructure (data+API), consumer gain (ease+control), and trusted regulatory-compliant models.

Some Canadian FinTechs Best Positioned:

• Bounce Financial (formerly Koho)

• Neo Financial

• Borrowell

• Flinks

• Wealthsimple

Canada's open banking framework represents a significant advancement in the financial sector, offering consumers and small businesses secure access to innovative financial services. This initiative is poised to enhance financial literacy, improve financial outcomes, and support economic growth.