Open banking

What is open banking

Open banking is not yet available in Canada, but it is available in other countries, like Australia and the UK. The Government of Canada is currently considering the best way to enable its safe introduction in Canada.

Learn more about the future of open banking in Canada.

Open banking is a secure way for you to share your financial data with financial technology companies (often called fintechs or fintech apps). Fintech apps provide online financial products or services. You use these apps on websites or on your mobile phone or tablet. Fintech apps are different from your bank’s online or mobile banking features.

When you use a fintech app with open banking, your bank securely shares your financial data with the app on your behalf. Your data is shared using a secured online channel. You don't need to provide your online banking username and password to access the app’s products and services.

Open banking is sometimes also known as consumer-directed banking or consumer-led banking. Open banking is the term most widely used internationally.

Find out more about fintech apps.

Figure 1: How open banking works

What should you know about screen scraping

Open banking is not yet available in Canada. This means that there is currently no secure system in Canada to safely share financial data from your bank account with fintechs other than your bank.

However, significant amount of financial data is already being shared through technological workarounds used by fintech apps. One of the most common methods fintech apps use to access financial data is called screen scraping.

Screen scraping is different from open banking because you have to share your online banking username and password. This is a problem because sharing your username and password could break your electronic access agreement with your bank and put you at risk.

Fintech apps that use screen scraping might allow you to access similar products and services as those available with open banking. However, they present security, liability, and privacy risks for you.

How can open banking benefit you

Open banking doesn’t need screen scraping. You don’t need to provide your online banking username and password. Instead, you authorize your bank to securely share your financial data with the fintech app on your behalf.

By keeping your username and password safe, you don’t risk losing your protection against unauthorized transactions.

Open banking is not yet available in Canada. If it becomes available, open banking could increase consumer choice and improve financial outcomes for Canadians.

Using fintech apps with open banking can help improve how you manage your finances online and through mobile devices. It gives you greater control over your financial data.

Open banking may offer you several benefits, such as:

• having access to a wider range of useful, competitive and consumer-friendly financial products and services that meet your needs
• having real-time access to all your financial accounts, products and services in one place
• having quick and easy access to personalized tools and products to help improve your financial health. Examples include financial product comparison tools and budgeting tools.
• demonstrating your creditworthiness more easily to loan providers by having all your information in one place

Figure 2: Benefits of open banking

How an open banking framework can protect you

In an open banking framework, you may control, edit, manage, and delete your information. You may also decide when, how, and to what extent this information is communicated to third parties. Before being implemented in Canada, the advisory committee suggests that an open banking framework have:

1. common rules among industry participants to ensure you're protected
2. an accreditation process to allow third parties to access the open banking framework
3. technical specifications that allow for safe and efficient data transfer
4. your express consent when transferring your data

What is the future of open banking in Canada

Open banking can offer many benefits to consumers, but it is important that it is introduced in a way that protects consumers.

That is why in 2018, the Government of Canada undertook a review of open banking. It appointed an Advisory Committee to guide the review. 

Phase 1

In early 2020, the Department of Finance released the findings from the first phase of this review.

This first report included the results of stakeholder consultations and learnings from other jurisdictions. It proposes that industry and government collaborate to develop a framework that would enable the safe introduction of open banking in Canada.

View the report from the first phase of the Government of Canada’s review of open banking.

Phase 2

In November 2020, the Committee held more stakeholder consultations on a proposed open banking framework for Canada. This phase assessed implementation considerations, such as consumer privacy, security, access, and recourse.

Learn about the second phase of the Government of Canada’s review of open banking.

The Financial Consumer Agency of Canada (FCAC) welcomes the government’s review of open banking. FCAC recognizes that consumers want a safe and secure way to share their financial data with fintech apps. FCAC provided advice on how the open banking framework should be designed to best ensure consumers are protected. FCAC will continue to monitor its development closely. 

View FCAC’s submission as part of the second phase of the Open Banking Consultations.

The Committee delivered its findings in a final report to the Minister of Finance in April 2021. It provides recommendations on implementing a secure open banking framework in Canada. 

View the final report of the Government of Canada's review of open banking. 

Phase 3

In March 2022, the government appointed Abraham Tachjian to lead the development of an open banking framework in Canada. His mandate will be to consult with the industry, regulators, and consumer representatives. The objective of these consultations is to design and implement the key elements of an open banking framework.

Learn more about the implementation of open banking in Canada.

What should you keep in mind when banking online or via mobile applications

Most banks offer an online security guarantee. This protects you from any unauthorized transactions made using your bank’s online banking services. However, you need to do your part by keeping your username and password safe.

This protection may not apply to fintech apps that use screen scraping. Read your bank’s account agreement and online banking or electronic access agreement. This will help you understand potential risks of disclosing your username and password to external apps that use screen scraping.

This problem doesn’t exist with open banking. Open banking doesn’t need screen scraping. With open banking, you authorize your bank to safely share your financial data with the fintech app on your behalf. You don’t have to provide your online banking username and password to anyone. This is one of the reasons FCAC supports the Government of Canada’s efforts to create a safe and secure open banking framework.

Find out more about fintech apps.

Find out more about your online banking rights and responsibilities.

Related links

• Consultation document: A Review into the Merits of Open Banking
• Advisory Committee on Open Banking
• Resolving an unauthorized transaction
• Protection against unauthorized credit and debit transactions