The federal budget has finally answered a long-running question: will Canada move ahead with open banking? Ottawa’s new consumer-driven banking framework, set to launch next year, is designed to replace risky online password sharing with secure data connections and to increase competition.
The Carney government’s decision reflects more than just years of consultation. It’s also the result of co-ordinated advocacy from the small business sector. Initiatives such as OpenSME demonstrated that delayed implementation carried real economic costs for small business.
It is an important milestone. But if Canada stops at banking data alone, it will miss much of the potential for competition, productivity and affordability that policymakers say they want.
Why open banking isn’t enough
The next step must be a clear roadmap for open finance, which should include greater affordability, clear rules for governance and liability, and increased competition for the big banks in areas such as mortgages and insurance.
Today, millions of Canadians still type their online banking passwords into third-party apps, such as a budgeting app or receipt management app, to manage their money. This “screen scraping” is often a pop-up with the bank’s logo.
The app then logs in on their behalf, scrapes transaction data by reading the screen and stores it on its own servers. Because the bank sees this as the consumer logging in, people often lose the liability protections they would normally have if something went wrong.
According to the Department of Finance, roughly nine million people share their credentials with service providers so software can copy their transactions.
The 2026 open banking framework will finally give people a safer alternative. Instead of sharing passwords, they will be able to direct their bank to share specific data with accredited third parties over secure real-time rails, that shares data-rich information directly with your app of choice.
That is a welcome fix. But it still leaves most of the financial system untouched.
Competition and inclusion have to be built in
For a typical household, the largest financial decisions are not about day-to-day transactions. They are about mortgages, insurance and retirement savings. For a small business, its most important data live in accounting systems, payroll and receivables, not a single bank account.
A narrow version of open banking risks entrenching a two-tier system where some data are portable and some stay locked, even though they all describe the same person or firm.
This is where open finance comes in. Open finance applies the same basic idea of secure, consent-based data sharing to a wider range of financial products. In practical terms, it would allow Canadians to move their verified financial history when switching providers for mortgages, insurance, investments or business credit, not just when they want to use a budgeting app.
Other countries have already moved in this direction.
In the United Kingdom, the official open banking body reports more than 13 million active users as of March 2025 and tens of millions of open banking payments in a typical month. As switching costs fall, providers sharpen their offers.
In Australia, a broader consumer data right covers banking and is expanding into energy and telecommunications, although adoption has been slower, which underlines the importance of good design and communication.
The choices ahead
Canada has a window now to learn from those experiences and design an open finance roadmap that fits its own needs. Three choices in particular will matter.
First, scope should follow affordability. If the goal of open banking is affordability through competition, then the next stage should focus on the parts of household and business balance sheets where price and access issues are most acute. That means mortgages, insurance and retirement savings for consumers, as well as working capital and payments data for small- and medium-sized enterprises.
Putting these products into an open finance system would allow a family to reuse its verified repayment history when shopping for a new mortgage, rather than starting from scratch with each lender. It would let a small business authorize read-only access to real-time accounting data so that a potential lender could see how the firm is actually performing.
In both cases, competition would rest on data rather than on paperwork hurdles or brand familiarity. When they make it difficult, people just don’t switch to a competitor.
Second, governance and liability need to be clear. Screen scraping is risky, partly because when something goes wrong, nobody is clearly responsible. Consumers are left negotiating with a bank, an app provider or financial data aggregators they have never met.
The new federal open banking framework begins to address this problem by creating an accreditation regime and setting rules for participants. An open finance roadmap should go further and spell out who is liable for what, whenever data move beyond the banking sector.
That likely means harmonizing rules across regulators, including the Office of the Superintendent of Financial Institutions (OSFI), the Competition Bureau and the privacy commissioner, as well as creating a single point of redress for individuals and businesses. If people know who stands behind a service when problems arise, they are more likely to use it.
Third, competition and inclusion must be built in. Much of the argument for open banking rests on the idea that it will boost competition in a market dominated by a small number of large banks.
That will not happen automatically. Rules for open finance will have to ensure that accredited credit unions, fintechs and other challengers can access data on fair terms and that technical standards do not become a barrier to entry.
The risks of data sharing are already here
At the same time, policymakers will need to guard against simply shifting concentration from big banks to big technology. That means strong consent rules for combining financial data with other digital footprints will be needed to prevent new forms of market power and discrimination.
There is also a need for public debate. People are right to worry about the risks of data sharing. But those risks are already here. The choice is not between a world with data sharing and a world without it. It is between unregulated, opaque practices such as screen scraping and a governed system with enforceable standards.
As an accountant working with hundreds of small businesses and families, I see both the need and the opportunity. Clients waste hours moving the same information between institutions. They often overpay because switching is difficult and offers are hard to compare.
Many would benefit from new tools that help them manage cash flow and plan ahead – if only those tools could access their data safely.
The 2026 open banking launch is Canada’s first real step toward a more modern financial data framework, building on years of payments modernization work at Payments Canada. It should not be the last.
By setting out an open finance roadmap now focused on scope, governance and competition, Canada can ensure that the next phase of reform delivers what budget documents have long promised: more choice, better prices and a system that works for people and businesses, not just for institutions.
