CIRO to Consult on Supporting the Consumer-Driven Banking Framework in Canada

Overview

CIRO is exploring how it can support Members in adopting Canada’s Consumer-Driven Banking framework with a view to reducing regulatory duplication, ensuring alignment with national standards, securities legislation, and providing education and guidance. Through consultations with Members and key stakeholders, CIRO aims to clarify various elements of this framework, including accreditation, regulatory oversight, and compliance expectations within the existing securities framework.

Key areas of focus for CIRO will include clarity over minimum requirements and CIRO’s potential role in supporting interoperability while maintaining strong consumer protections. By leveraging the federal framework, CIRO seeks to enhance industry adoption, streamline regulatory coordination, and foster innovation, security, and efficiency in financial services.

Background

Consumer-Driven Banking

Consumer-driven banking, also known as open banking, allows consumers and small businesses to securely share their financial data with approved service providers through application programming interfaces (APIs). Canada’s proposed consumer-driven banking framework is designed to provide a secure and efficient way for Canadians to access and share their financial data while enabling new financial tools and services.

Current state of legislation

The consumer-driven banking legislation will be implemented in two phases:

1. Budget Implementation Act (BIA) No. 1 – The Consumer-Driven Banking Act, which was passed on June 20, 2024, includes the foundational elements of the framework, such as governance, scope, and technical standards.
2. Budget Implementation Act (BIA) No. 2 – This upcoming legislation will address accreditation, liability, privacy, and security.

On December 16, 2024, the federal government released the full consumer-driven banking framework as part of the 2024 Fall Economic Statement, targeting an early 2026 launch.

As of the date of this notice, open banking in Canada continues to advance through legislative channels. While the current proroguing of Parliament could temporarily delay legislative progress, CIRO is proceeding under the assumption that open banking remains an active priority for implementation in Canada.

Core elements of the Consumer-Driven Banking Framework

The consumer-driven banking framework is built on six key pillars:

• Governance – Oversight and management of the system.
• Scope – Defining the types of data, functionalities, participants, and expansion timeline.
• Accreditation – Establishing requirements and processes for participation.
• Common Rules – Ensuring consumer protection in areas such as privacy, liability, and security.
• National Security – Safeguarding the integrity of the financial system.
• Technical Standards – Setting and overseeing the infrastructure that facilitates secure data sharing.

Supervision and enforcement of the consumer-driven banking framework will be undertaken by the Financial Consumer Agency of Canada (FCAC), with a newly created Senior Deputy Commissioner for Consumer-Driven Banking. A new advisory committee will also be established to ensure uniform guidelines and penalties.

CIRO’s Involvement and Impact on Members

Impact to CIRO Members

Federally regulated banks with significant retail activity will be mandated to participate in the framework. The scope of data initially contemplated will also include investment products accessible through a consumer's online banking portal¹. Initially, participation will be limited to to receiving consumer financial data only (i.e. read access).

While mandatory participation may not be required for CIRO Members, some have expressed interest in voluntarily opting into the consumer-driven banking framework. Those who choose to do so will need to meet accreditation requirements, comply with technical and security standards, and support reciprocal data-sharing requests, while meeting the requirements of the securities legislation.

Scope of CIRO consultation

CIRO will assess how it can facilitate the adoption of consumer-driven banking while reducing regulatory burden and duplication. Through broad stakeholder engagement—including Members, government agencies, fintechs, and industry associations—CIRO will seek insights from subject matter experts and other regulatory authorities.

These consultations will help determine CIRO’s potential role in supporting the framework and identifying opportunities to streamline processes, enhance efficiency, and foster innovation. We also aim to explore potential opportunities and challenges in expanding the existing framework to incorporate additional functionalities or data elements. One key area of focus will be evaluating the need for a standardized KYC process to facilitate greater client data portability².

CIRO will also work with the participating jurisdictions at the Canadian Securities Administrators (CSA) on their project to examine the implications of data portability in the Canadian capital markets through the publishing of CSA Multilateral Discussion Paper 11-406 – CSA Financial Innovation Hub Introduces Collaboratory and Data Portability Test. The insights gained from their work, including stakeholder feedback and potential testing environment, could help us as we evaluate our role and next steps. We aim to ensure a coordinated approach that benefits all industry participants. Please consider reviewing the CSA Paper and providing them with feedback through a submitted response, if appropriate.

Next steps

Over the coming months, we will establish working groups and engage with various stakeholders to help define CIRO’s role. If you are interested in participating in this consultation, please contact [email protected].

¹ “In the initial phase, the scope of data that participants will be required to share at the request of a consumer will initially include data related to chequing and savings accounts operations, investment products available through their online portals, and lending products, such as credit cards, lines of credit, and mortgages.” 2024 Fall Economic Statement: Canada’s Complete Framework for Consumer-Driven Banking, Department of Finance Canada

² In our strategic plan, we committed to exploring ways to simplify and enhance the investor-friendliness of account information collection and disclosure documents through standardization while maintaining robust disclosure and investor protections across all account offerings.