SANDSTONE’s portfolio manager and partner Niki Dunne recently attended the Toronto Open Banking Expo, where 600+ industry leaders, regulators, and innovators gathered to discuss the current state and future of open banking in Canada. The Expo featured over 80 expert speakers and 20+ exhibitors, including representatives from all major Canadian wealth management firms, banks, credit unions, fintechs, global tech firms, and policymakers.
With the federal government’s Consumer-Driven Banking Framework on track for rollout by the end of the year, this year’s event served as a timely checkpoint on where we are and where we’re headed. A key theme throughout: open banking is no longer a “what if” but a “what now?” SANDSTONE is preparing for the world of opportunities our clients stand to gain.
Open banking is a secure way for you to share your financial data — i.e. account balances and transaction history — with trusted third-party apps or services, like SANDSTONE, but only if you choose to. For Canadians with accounts across multiple financial institutions, open banking makes it possible to see your entire financial picture (or dashboard) in one convenient place. Plus, it could provide seamless money transfers between your accounts, CRA installments, enhanced planning opportunities, and more.
SANDSTONE views this upcoming change as an opportunity for our clients — a great value add — and is evaluating future expanded service offerings in the wealth management space: think cash balances earning more, optimized tax planning strategies, improved client experience, holistic financial view with aggregated account information, smoother account documentation processes, etc.
Currently, financial data is often shared through “screen scraping,” where users share their banking credentials with third parties to collect information, creating privacy concerns due to lack of control. Open banking puts regulatory guardrails in place, including what gets shared and for how long. Additional benefits:
• Transparency between institutions can provide better interest rates on savings and borrowing.
• Open banking is for the consumer, enabling you to take better charge of your finances.
• Open banking supports financial inclusion. For example, newcomers to Canada who don’t yet have a credit history could build their credit score by having on-time rent payments counted.
Last year, the federal government set a target for open banking implementation by 2026, but legislation is still needed to outline rules and accreditation processes for service providers. This includes the Financial Consumer Agency of Canada (FCAC) creating a public registry of financial institutions trusted to handle sensitive data. The FCAC outlined progress on an evidence-based framework prioritizing privacy, security, and consumer trust and protection.
Open banking is not new, it’s just new to Canada! The UK reached 10 million active open banking users in July 2024, representing 15% of the population (up from 6 million just 18 months earlier). By 2024, the EU had about 64 million open banking users, roughly 25% of the population, indicating mainstream acceptance. Brazil’s open banking ecosystem processes 2.3 billion successful transactions per week. Panels and keynotes stressed the urgency for Canadian financial institutions to modernize or risk falling behind.
Open banking is driving the next wave of financial innovation, enabling personalized customer services, smarter APIs, AI-driven insights, and greater competition (= productivity!) between financial institutions. By integrating consent-driven data sharing with accounting and tax software, wealth management firms like SANDSTONE would be able to reduce manual paperwork and lost client planning opportunities. Globally, open banking is already reducing loan approval times and expanding access to credit by using transaction data, not just credit scores, to assess risk. For Canadian consumers, this means more competitive loan terms, higher transparency, and the ability to shop for better interest rates, ensuring their money works harder for them.
Open banking would allow clients to aggregate data from multiple accounts and financial products onto a single platform, providing a holistic, real-time view of their financial health. This enables better cash flow management, trend identification, and more informed decision-making. Top uses include sending money (72%), paying bills (66%), and accessing banking services (66%), all benefiting from seamless account-to-account payments (without delays) and automated financial management.
SANDSTONE is excited about open banking in Canada. The opportunities we expect to present to our clients are abundant. Open banking has the potential to transform consumer experiences for the better, putting clients in control of their data and financial futures. We are keeping a pulse on the developments and will keep you abreast of any updates in the coming months.