Open Banking Readiness Gap Banks Can Not Ignore

Canada’s Consumer-Driven Banking Regulations Set the Direction

The proposed Consumer Driven Banking Regulations¹ were published on 27 June 2026. It provides much needed clarity on the operations of Canada’s open banking framework. It requires feedback from stakeholders over the next 60 days. Below are some key observations from our review of these proposed regulations:

• Customer consented data sharing at no cost: Data sharing of the customer consented data becomes available to other stakeholders at no cost mandatorily. Banks can choose to see this as a cost of compliance or as an opportunity to better understand their customers by leveraging data from across the ecosystem and embedding themselves into customer’s key decision journey. Those who will actively use incoming data to personalize and serve will gain, while others risk missing the broader opportunity that open banking will create.
• Accreditation process for participants: The proposed regulation will introduce clear entry requirements for competition by allowing more players to access data in Canada’s open banking ecosystem. Rather than allowing unrestricted participation, it establishes a structured model that balances innovation with accountability. This creates a more predictable operating environment while encouraging healthy competition. Institutions that build strong governance, risk, and compliance capabilities early will be better positioned to scale their participation as the ecosystem matures.

Open banking readiness is becoming a trust, compliance, and operating-model priority, not just an API modernization exercise.

Trust, Compliance, and Accountability in Open Banking

• Banks as a pillar of trust: Although the data will move more freely across the system, banks play the central role as gatekeepers of trust. The proposed regulations ensure customer authentication and secure data access continuing to rest with them, where they will continue to safeguard and regulate information with transparency, credibility and security.
• Compliance as a catalyst: The proposed regulation sets high expectations on system availability, historic data access and customer authentication, which may be challenging for legacy systems. Rather than treating compliance as a standalone exercise, many banks may view it as an opportunity to modernize core platforms, strengthen API capabilities, and improve their digital infrastructure. Organizations that will align with regulatory readiness with technology transformation are likely to realize greater long-term value.

From Screen Scraping to Structured Partnerships

Canada is also moving open banking through a regulatory lens, using the term consumer-driven banking. The objective is to give individuals and businesses more control over their financial data while reducing dependence on risky practices such as credential sharing and screen scraping. The framework is designed to support secure data sharing with approved service providers, strengthen consumer protection, and encourage competition in financial services. 

Canada’s direction also connects open banking with broader payments modernization. As real-time payment infrastructure develops, banks will need to think beyond read-only data access. Future phases may include broader functionality such as payment initiation or other forms of write access. That makes early architecture decisions important. Banks that treat open banking as a narrow compliance project may find themselves reworking the same systems later, while those that build flexible API, consent, and partner-management foundations can adapt more easily.

Why Banks Should Act Before Compliance Becomes Urgent

For banks, the move toward regulation is a landmark moment because it addresses long-standing friction in financial data sharing. Consumers want more control, fintechs need reliable data access, and regulators want safer alternatives to unmanaged credential sharing. Banks sit at the center of this ecosystem as primary custodians of customer data, which means they will carry significant responsibility for availability, security, consent, and compliance. 

Acting early gives banks more room to shape their readiness roadmap. They can identify gaps in core banking integration, API management, identity and access management, cloud infrastructure, monitoring, reporting, and third-party onboarding. They can also define how consent will be obtained, tracked, renewed, and withdrawn across channels. These capabilities cannot be added meaningfully at the last minute because they touch core systems, customer journeys, risk controls, and ecosystem partnerships. 

Banks that prepare early can move from obligated data providers to trusted ecosystem participants with stronger customer relationships.

Building the Open Banking Readiness Layer

To comply with emerging open banking regulations in the U.S. and Canada, banks and credit unions should prioritize robust API management and data privacy frameworks. Open, industry-standard APIs can enable real-time, secure, and transparent data exchange between data providers, data aggregators, and authorized third parties. But APIs alone are not enough. Banks also need governance around developer access, sandbox environments, testing, monitoring, incident response, and ongoing compliance reporting.

This is where a structured technology and advisory approach becomes useful. Institutions may need support across regulatory compliance, technology readiness, API design, consent-led identity controls, partner ecosystem management, and monetization strategy. Tech Mahindra can support banks through off-the-shelf solutions or bespoke development, depending on regulatory scope, existing technology maturity, and strategic ambition.

The institutions that move first will be better positioned to reduce compliance anxiety, improve customer trust, and create a more reliable data-sharing experience. Open banking is ultimately about giving customers more control while helping the financial ecosystem innovate safely. For banks, the question is no longer whether open banking regulation is coming. The real question is whether their systems, controls, and operating model are ready for it.