Open banking could mean cheaper services and a better credit score. What is it?

The Liberal government failed to meet its own deadline earlier this year to overhaul how banks handle Canadians’ data — a missed promise that industry players say has a major impact on how Canadians manage their own money.

The concern from some in the financial services industry revolves around open banking — an approach to banking that gives Canadians more choice about how and with whom they share their financial information.

Such a system could make it easier to move money and even accounts across institutions, improve access to credit for new Canadians or allow a small business owner to receive payments from customers in a way that avoids costly fees, says Alex Vronces, executive director of advocacy group Fintechs Canada. “This system will ensure that you, not your bank, control your data,” reads the federal Liberals’ 2021 election platform, which promised to introduce a “made-in-Canada model of open banking that will launch no later than the beginning of 2023.” Now four months into the year, the rollout for open banking remains an open question for industry stakeholders like Vronces. “There’s a worry that we’re going around in circles in the open banking conversation right now,” he tells Global News. “We’re not yet close to a decision on how this thing is going to be stood up and what exactly it’s going to look like.

This, I think, is a pretty, pretty big risk.” The federal government confirmed to Global News in a statement Wednesday that despite missing the early 2023 deadline, open banking is still on its radar and it hopes to have something more tangible by the end of the year.