The Canadian government has officially announced the next steps in its open banking (also known as consumer-driven banking) framework, in the Fall 2024 Economic Statement. Open banking will empower Canadians to securely access and share their financial data, enabling them to use innovative financial tools to improve their financial outcomes.

What Is Open Banking?

Open banking allows consumers and small businesses to securely share their financial data through application programming interfaces (APIs) with approved service providers.

For example, open banking will enable Canadians to:

• Use apps that build credit scores based on transaction data or rent payments.
• Aggregate view of accounts across banks for a full financial picture.
• Access budgeting tools that offer spending insights.
• Manage subscriptions in one place or receive automated financial advice tailored to their needs.

Key Objectives of the Framework

The government’s framework is built around three core policy goals:

1. Safety and Soundness: Protecting Canadians from security risks tied to outdated data-sharing practices.
2. Consumer Protection: Canadians can access their financial data securely without additional fees.
3. Economic Growth: Encouraging innovation and competition while maintaining a stable financial system.

Next Steps Announced in the Fall Economic Statement

The government has committed to introducing legislation that addresses the remaining elements of the framework, including:

• Accreditation of service providers to ensure only trusted entities can access consumer data.
• Common Rules for liability, privacy, and national security.

The framework will allow Canadians to confidently use services that improve their financial well-being, such as apps that track spending, offer tailored financial advice, or simplify loan applications.

Timeline and Implementation

The open banking framework will launch in phases, with the first phase set to begin in early 2026. This approach ensures secure and reliable implementation, benefiting millions of Canadians and small businesses.

The government will review the framework every three years to ensure it continues to meet its objectives, providing a secure foundation for innovation in Canada’s financial sector.