Financial data sharing in Canada closer to reality

Canada, still lagging multiple countries in its endeavours to develop a secure consumer-driven banking framework, also known as open banking, has moved quickly over the past several months to begin closing that gap.

The federal government introduced a new Consumer-Driven Banking Act in its 2025 fall budget, which received Royal Assent at the end of March, 2026. The government announced it will “move quickly to advance regulation while supporting the Bank of Canada as it implements the first phase of consumer-driven banking.”

It also said the “Department of Finance will concurrently undertake consultation and policy work over the next 12 to 18 months to advance a second phase of consumer-driven banking that considers broader functionality and participant scope.”

The Consumer-Driven Banking Act does not invent data sharing, says Rajesh Vijayaraghavan, an assistant professor of accounting with the University of British Columbia’s Sauder School of Business in Vancouver. “Rather, it establishes common rules so that data sharing can occur securely, consistently, and at scale.”

Giving consumers greater control over their financial data also creates a framework whereby financial institutions, including banks, insurers, lenders, investment firms, and fintechs, can compete on the quality of their products and services rather than on exclusive control of customer data, explains Vijayaraghavan.

A key issue the Act is trying to solve includes information asymmetry, says Vijayaraghavan. He notes that incumbent banks today have much more information about their customers, which includes years of transaction history, payment behaviour, income patterns and other financial information, compared to a competing institution, which makes it harder for the latter institution to assess the prospective customer or offer competitive products.

“Consumer-directed data sharing reduces this information asymmetry by allowing consumers to securely share their financial information with another provider,” Vijayaraghavan elaborates.

Evolution to open insurance?

An open banking framework also raises the possibility of introducing an insurance framework that would have major repercussions on Canadian insurers.

Open insurance would place “customers first by giving them greater visibility, control and choice over their insurance data, including the ability to securely share it with trusted third parties when they decide it creates value for them,” says Stephen Decoteau, senior vice president of actuarial services and underwriting at Desjardins General Insurance Group in Levis, Quebec.

However, any evolution toward open insurance must be grounded in strong safeguards for informed customer consent, privacy, security and data protection, Decoteau stresses.

“When these foundations are in place, open insurance can enable more transparent, seamless experiences, while supporting the development of products and services that are better tailored to customers’ needs and life situations,” he elaborates.

John Power, a spokesperson for the Competition Bureau Canada (CBA), headquartered in Gatineau, Quebec, says introducing data portability into the insurance sector could save Canadians between $1.1 billion and $3.8 billion in annual costs, citing findings in the Competition Bureau’s 2026 report Your Data, Your Control: How data portability can unlock competition and empower consumers.

These savings would arise as a result of switching to less expensive insurance plans, and from reducing the time currently spent in comparing and switching insurance providers, he explains.

An open insurance option is feasible but would need careful design, and require more than simply extending banking application programming interfaces, says Donna Galloway, chief financial officer of Open Finance Network Canada, a not-for-profit organization based in Toronto dedicated to advocating for consumer data rights and educating Canadians and small and medium enterprises on the benefits of Open Finance.

“Insurance is provincially regulated in many respects. [It] involves sensitive underwriting and claims data and would need clear rules around consent, liability, data minimization, privacy, accreditation and consumer redress,” she elaborates.

To implement open insurance in Canada, regulators also would need to align federal privacy and data mobility rules with provincial insurance regulations, says Galloway.

Canada’s federal consumer-driven banking framework already recognizes provincial involvement and allows designated provincial regulators in certain areas, which may serve as an important precedent, she adds.

Vijayaraghavan says Canada has successfully demonstrated in other parts of its financial system that nationally consistent standards can exist even when institutions are subject to different regulatory regimes, with the Interac payment system being a good example of a common payments infrastructure that allows institutions to interoperate.

“The lesson is that what matters is nationally consistent standards that enable interoperability, consumer protection, and trust,” he elaborates.

Building trust with consumers is a critical element of data sharing acceptance, stresses Vijayaraghavan, who says consumers must be able to trust that the proper framework, such as a regulatory regime, is in place to protect their data.

There is, he notes, much more of a privacy aspect associated with open insurance compared to open banking because it includes more than financial transactions. It also involves very personal and sensitive information related to health records, claims history, driving behaviour and property details, says Vijayaraghavan.

Open insurance could have a positive impact on the insurance advisor’s relationship with his or her clients because with greater automation of data, that could free the advisor to spend more time on value added services such as interpreting more specific information and providing more personalized advice, says Vijayaraghavan.

There is, however, the possibility that the role of the insurance advisor could be diminished, especially with respect to pricing if consumers’ insurance data is easily shared across banks and insurers, says Martin Halek, an associate professor of risk management and insurance at the University of Calgary’s Haskayne School of Business.

Halek predicts that advisors would still add value in determining coverage needs.

At Desjardins, open insurance is viewed as an opportunity to strengthen the company’s relationship with members and clients by enhancing trust, improving service accessibility, and helping those stakeholders make more informed decisions about their coverage, says Decoteau.

“We also recognize that broader data-sharing frameworks across financial services could contribute to a more connected ecosystem over time. As this evolves, it will be important to ensure that insurance-specific considerations remain central, so that outcomes continue to deliver clear value and protection for customers,” he adds.

Competitive, innovative stimulus

Power says “open banking, and data portability more generally, is foundational for building more competitive financial markets.” 

He notes how the CBA report found “that data portability can empower consumers, reduce barriers to switching, and help keep markets competitive by making it easier for people to choose the service provider that best meets their needs.”

Power says consumers who currently wish to switch service providers incur real or perceived costs of time, effort and money and that such costs “can cause consumers to stick with their current providers, even when competitive options arise, because comparing services and switching can seem difficult or complicated.”

But when consumers can switch providers more easily, businesses are motivated to offer better products, lower prices and improved customer service to attract and keep customers. “This encourages innovation in the marketplace and leads to more competitive options for everyone,” Power elaborates.

Firms will respond by offering better services at lower prices in order to both win new customers and keep their existing customers. There will also be lowered barriers to entry and expansion because new entrants can more easily enter and grow in the market as consumers enjoy greater flexibility, he adds.

“For example, with open banking and data portability, Canadians could move their banking or budgeting history to a different financial app without starting over, or use a complementary financial app that integrates similar data for other purposes.

By making it easier and safer to move data, it makes everyday choices simpler, [and] encourages service providers to innovate and compete harder to retain their customers,” Power says.

Catching up

Dozens of countries have either adopted or are actively implementing some form of open banking, says Galloway.

Leading examples include the United Kingdom, the European Union, Australia, Brazil, the United Arab Emirates, Saudi Arabia and New Zealand, with industry trackers identifying more than 140 jurisdictions around the world that have announced, implemented or are actively developing open banking or open finance initiatives, she adds.

Power notes that the experience of some jurisdictions that have already implemented data portability frameworks, like the United Kingdom, the European Union and Australia, “demonstrates that these frameworks can support innovation and consumer choice while maintaining strong privacy and security protections.”

“With the right guidelines and clear standards, Canadians can benefit from data portability while knowing their personal information remains secure,” Power stresses.

The promise of open insurance has also been demonstrated in leading markets around the world, says Galloway.

“Brazil is one of the clearest examples of a jurisdiction that has formally advanced open insurance, allowing insurance, pension and capitalization product data to be shared with authorized or accredited participants through a regulated framework,” Galloway says.

While insurance has not yet been included in Canada's consumer-driven banking framework, “we see a meaningful opportunity to build toward a broader open finance roadmap,” she stresses.