You may have heard of a new wave of banking apps claiming that they can use ‘open banking’ to help you manage your finances or get better deals on services. But what exactly is open banking?
Open banking, also known as consumer-driven banking, is the regulatory framework that gives individuals control and ownership of their financial history. Under open banking, third-party providers (like budgeting apps, lenders and websites that aren’t part of your regular bank’s services) can securely access your basic banking data with your consent.
This allows you to securely use apps and services that help manage your money, compare financial products or make payments easily.
In Canada, open banking isn’t fully operational yet, but the federal government passed the Consumer-Driven Banking Act in June 2024 to establish a legal framework. The government plans to launch the first phase of this framework in early 2026.
That said, Canadians are already sharing their financial information with third-party banking and budgeting apps that rely on less secure data-sharing methods like screen-scraping. This requires apps or services to access your banking data with your username and password and “scrape” the information displayed on your account statement.
The Consumer-Driven Banking Act, passed in June 2024, established foundational elements for Canada’s open banking framework, stating:
Open banking is already available in countries like Australia, Brazil and the United Kingdom and is primarily used for budgeting apps, personalized financial advice, loan and mortgage applications, credit building and financial product comparison.
It will be used similarly in Canada to replace screen scraping, a method where a third-party service collects your financial data by logging into your bank account on your behalf. This can violate your bank’s terms of service and increase the chances of fraud and privacy breaches.
Open banking aims to make this process more secure by introducing application programming interfaces (APIs) that let your bank send your financial data to a third-party app with your permission without sharing your login credentials.
Open banking apps and websites have a number of uses, including:
Obviously, open banking apps also need to make money, and they will usually do that in several ways, including:
Another way open banking apps may make money is through advertising. Open banking apps could use your spending data to target advertisements for banking services that you might be interested in.
Theoretically, this means the adverts you get will be for things you might actually want, and the data is processed by the app rather than sold to those advertising, but some people still prefer to keep their data as far away as possible from advertisers.
Open banking apps only have access to your banking data, such as transactions and direct debits (basically, whatever appears on your statements), and not anything personal that your bank might know about your financial or living situation.
The Consumer-Driven Banking Act states that open banking apps have to use APIs to access your data (see the section on APIs below). This is the most secure way of sharing your data and ensures that only the data you give permission for can be shared.
APIs are used to let you securely share data between sites or apps on the internet. For example, providers like Skip the Dishes or Uber Eats use APIs to access your location through Google Maps.
APIs allow one company to access specific data that another company has, without needing to share your passwords with anyone. Before this can happen, you’ll be asked for your permission, and you should always check exactly what you’re giving permission for.
The government has stated that Canada’s open banking framework will feature an accreditation process and a publicly accessible registry to help consumers identify trusted service providers. This registry will be overseen by the Financial Consumer Agency of Canada (FCAC), listing entities that have met specific criteria and adhere to ongoing reporting requirements.
So before you consent to share your financial data with any app or service, make sure it appears on the official registry of accredited providers when it’s available. And never share your banking passwords — no open banking services will ask for them as they use secure APIs to access your information.
Open banking in Canada is strictly an ‘opt-in’ service and will only change the way your data is shared if you give express permission for the change. That means that if you prefer to keep banking the way you always have, you can simply choose not to grant access to your data.
Although open banking has not officially debuted in Canada yet, there are some solid digital banking options that offer low fees and, hopefully, an easy transition to open banking when it arrives. Check out some top options below.
As open banking gains momentum in Canada, more consumers are exploring alternatives to traditional banking for managing their finances. Our recent Finder: Consumer Sentiment Survey from March 2026 reveals how Canadians feel about different types of financial providers, ranging from the Big Five banks and other brick-and-mortar banks to digital banks or fintechs and credit unions.
Interestingly, nearly half of Canadians (40.91%) are open to banking with digital-first options, highlighting a growing shift toward convenience, which open banking is expected to enhance.
Canada is in the process of launching its official open banking framework, with key legislation already in place and rollout expected to begin in early 2026. Once implemented, Canadians will be able to securely share their banking data with trusted apps and services.
Until then, you can check out budgeting apps like Emma to help you visualize and manage your money.
Interested in the digital world where brand new, mobile-only banks are challenging the traditional banking landscape across the globe? Learn more about challenger banks here.
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