The Canadian government’s Department of Finance has delivered its ‘Complete Framework for Consumer-Driven Banking’, as part of the 2024 Fall Economic Statement.
The federal government is aiming to launch the consumer-driven banking framework in early 2026.
Finance Canada set out its initial Open Banking framework in Budget 2024 and passed the Consumer-Driven Banking Act in June this year, which included the foundational elements of scope and technical standards and designated the Financial Consumer Agency of Canada (FCAC) as the lead agency.
What we learned
The complete framework stated that government will adopt “a phased approach” to the three elements of scope: participants, breadth of data sharing, and functionality.
In the initial phase, it will mandate participation for banks that meet “a specified threshold for retail volume”, while the remaining federally-regulated financial institutions, as well as credit unions, crown corporations acting as banks, and other entities seeking accreditation “will be provided the ability to opt-in to the framework”.
Eyal Sivan, general manager, North America at Ozone API
The scope of data participants will be expected to share at the request of a consumer will initially include data related to chequing and savings accounts operations, investment products available through their online portals, and lending products, such as credit cards, lines of credit, and mortgages.
Canada will adopt a formal accreditation framework. However, tiered accreditation, which it defined as “the practice of establishing different accreditation requirements for entities, for example, based on the levels of data they are permitted to access”, will not be included in an initial phase, it has now been confirmed.
Elsewhere, it was confirmed that the Consumer-Driven Banking Framework will “clearly set out a liability structure that establishes a statutory relationship between participants when they enter the framework”, thereby removing the need for bilateral contracts between participants.
The government is yet to select a technical standard, but said that the consumer-driven banking framework “includes the principles and processes that will be used to identify” one.
Meanwhile, Canada’s Open Banking framework will undergo a government review after three years to “ensure core policy objectives continue to be met”.
Industry response
Eyal Sivan, general manager, North America at Ozone API, told Open Banking Expo that the latest update “takes some small but noteworthy steps towards a complete Open Banking system for Canadians”.
“In several ways, it reinforces statements already made in the previous iteration, including a commitment to a formal accreditation scheme, a public registry, the FCAC acting as an oversight body, and a liability structure that follow the data,” Sivan said.
“However, it also introduces some new elements, notably the idea of an accredited third-party service provider who can act on behalf of a participating entity; the specifics of how this will be enforced remain unclear, especially with no tiered accreditation.”
Carrie Forbes, founder and chief executive officer of Rockstar Advisory, said: “I think there’s been some careful consideration of issues like accreditation and how the framework would be governed against the many regulatory frameworks, but there’s still no definitive standard – without that, it’s difficult to plan much further.”
FDATA North America executive director Steve Boms called on the government to “prioritize delivery of consumer-driven banking as soon as possible and its approach to accreditation”.
Barry O’Donohoe, Raidiam’s co-founder and chief executive officer, called the announcement “a significant step forward” for Canada’s financial services landscape.
“By enabling consumers and small businesses to securely share their data with trusted service providers, Canada is unlocking innovation, enhancing financial outcomes, and building a more inclusive and dynamic financial sector,” he said.
“As pioneers in the creation of trusted data-sharing ecosystems around the world, we’re excited to see Canada setting out ambitious goals to build a framework that will empower its citizens and help drive economic growth.”
Further reading: Canada’s Open Banking ecosystem reacts to Budget 2024
Register your interest in Open Banking Expo Canada 2025, on June 17 in Toronto, here
