Canada's competition watchdog is urging Ottawa to adopt an open banking framework that helps lower switching costs and boosts competition in the sector.Will Christodoulou is co-founder and CTO of Cyder, a Toronto-based fintech startup that helps financial institutions ethically source real-time data.Both are alumni of Rogers Cybersecure Catalyst’s Cyber Accelerator program at Toronto Metropolitan University.
During René-Sylvain’s time in the Canadian financial sector, he found that enacting change was difficult even with the biggest team and R&D budget. The systems in place are meant to stay in place. It was a culture focused on sticking to what’s familiar. This shortsightedness stifles competition and hinders our ability to attract investment and talent in the fintech sector. It’s a missed opportunity to lead and shape the future of finance, especially when Canadians face enormous economic challenges. Inflation is high, and the cost of living is rising. An open banking system allows Canadians to take advantage of diverse financial services that better meet their needs..
The problem is achieving a tangible process has been painfully slow. The 2024 budget provided no official launch date and only allocated $5.1-million to the development and oversight of an open banking system. In this country, that’s virtually nothing. Australia provided almost 15 times the funding and took only two years to launch open banking.
Take Wealthsimple, for example. This fintech amassed more than three million users by making investing simpler – a move which has pressured banks to follow. Open banking would diversify Canada’s financial landscape and further pressure banks to evolve. Maintaining the status quo benefits nobody.