Canada's competition watchdog is urging Ottawa to adopt an open banking framework that helps lower switching costs and boosts competition in the sector. Bank towers are shown from Bay Street in Toronto's financial district, on June 16, 2010. THE CANADIAN PRESS/Adrien Veczan
GATINEAU, Que. – Canada’s competition watchdog is urging Ottawa to adopt an open banking framework that would ease barriers to switching institutions and boost competition in the financial sector.
The Competition Bureau says open banking, which allows consumers to share their banking data with other firms, would challenge established providers and clear some of the hurdles facing new service providers.
Open banking can grant consumers access to budgeting or money management apps and companies, and allow them to pool different bank accounts and credit cards into one place.
The federal government has promised to introduce open banking framework legislation as part of next month’s budget.
In its submission to the Department of Finance, which held a consultation on potential measures to strengthen competition in the financial sector, the Competition Bureau also suggests allowing uninsured mortgage borrowers to switch between banks without undergoing a stress test.
It notes the framework for reviewing proposed mergers could also be improved, such as by shifting the burden to merging parties to prove why the move would be unlikely to substantially lessen or prevent competition.
This report by The Canadian Press was first published March 21, 2024.
