In the strange, swirling world of financial technology and the industry reform it engenders, few sagas are as mercurial, as maddening, and as mesmerising as the North American Open Banking journey. It has been a parade of promise and pause, a roller coaster of regulation and resistance, an odyssey through shifting political sands and ideological fog. We have watched as titans from both industry and government have stood poised to strike – only to falter at the gates.
For years, the question on every technocrat’s lips has been: Who will get there first? Canada, with its sterling banks and sensible focus on safety and soundness? Or the brash, sprawling, unabashedly market-driven United States, with its patchwork of players and policy?
What we got instead was a slow-motion horse race, hobbled by bureaucracy and buffeted by the headwinds of geopolitical, technological and societal change.
A tale of two turtles
North America’s flirtation with Open Banking has never been a sprint. On the contrary, this was never a race of greyhounds, but of tortoises limping towards a finish line that seems to keep moving.
Eyal Sivan, general manager, North America at Ozone API
Canada, ever the cautious cousin, dipped its toe gingerly into the waters of financial transformation. It formed committees. It issued reports. It consulted. And while Canadians waited – politely, of course – time ambled forward. An effort that started almost a decade ago, with some fanfare and enthusiasm, has been marked by bureaucratic delays and broken promises.
The United States, by contrast, boasted a frenetic energy. Fintechs surged, each looking to bring novel capabilities to an enthused ecosystem. API standardization blossomed, in the hands of a market that saw the benefits, even in the absence of any government mandate. And yet, that critical balance between industry action and reliable regulatory guidance remained elusive.
Still, both nations trudged along. A few steps forward, then a stumble, then a rethink – sometimes, sadly, a few steps back. All the while, the rest of the world soldiers ahead, with many regions already exploring the new possibilities that Open Banking brings.
The arrival of 1033
Then came the moment. A spark in the dry tinder of American data rights regulation.
In late 2023, the Consumer Financial Protection Bureau (CFPB) unveiled its long-awaited implementation of Section 1033 of the Dodd-Frank Act. Here, finally, was the lighthouse in the fog. A federal rule that would enshrine consumers’ rights to access and share their financial data.
The Open Banking community erupted in cautious jubilation. Here was the meat on the bone, the law with teeth, the target state towards which industry could march.
With 1033 on the move, the United States appeared to surge ahead. Conferences buzzed, capital flowed, fintech sprouted. Even the banks, despite their apprehension, began to align the compliance troops behind their resident Open Banking champions.
Meanwhile, up north, Canada looked stalled. Progress on their own Consumer-Driven Banking Act slowed to a crawl. Ottawa offered platitudes and deferrals. Industry players held their breath. And then came the thunderclap.
Justin Trudeau, the face of modern Canada, abruptly announced he would step aside.
Washington changes tack
But just as the Americans hit the gas, the engine began to sputter.
The 2024 election ushered in a fresh wave of political retrenchment. With a triumphant resurgence in Washington, the new administration turned its gaze towards government efficiency, often resulting in removing regulatory agencies deemed unnecessary. The Consumer Financial Protection Bureau (CFPB), considered by some a crown jewel of post-crisis reform, was abruptly put in the crosshairs.
Within months, the CFPB faced budgetary strangulation. Senior leadership resigned or was let go. Enforcement actions were curtailed. And in a move that sent shockwaves through the financial ecosystem, legal manoeuvrings began to vacate Section 1033 altogether.
The rule that was to herald America’s Open Banking age now teeters on the edge of existence, fighting for its life.
And just like that, the race is reset.
The Canadian counter-tide
Time has a way of changing things. The same Canada that seemed destined to dawdle is now re-emerging with unexpected vigour.
While Trudeau’s resignation cast a pall over Ottawa, it also cleared the path for new voices to rise. Among them, none rang louder than Mark Carney, the steely-eyed former Governor of the Bank of England, stepping into the Prime Minister’s office as a kind of economic elder statesman.
Some of Carney’s most recent comments were remarkably on-point, calling for investment in national data infrastructure and endorsing the principles of consumer-directed finance. Most importantly, he signaled that the time for delay was over.
In response, the Consumer-Driven Banking Act, long stuck in legislative limbo, is stirring once again. Strategy papers are being dusted off, consultations are resuming, and the old machinery is rumbling back to life. The Financial Consumer Agency of Canada (FCAC), designated to drive the Open Banking bus, has budget in hand and is staffing up.
Could it be? Could quiet, careful Canada be the one to get there first?
A future unwritten
Let us not delude ourselves: the road ahead remains long and uncertain. Neither country has crossed the threshold. Both still bear the scars of indecision, interference, and institutional inertia.
And yet, Open Banking is not an idea that will vanish. Like the tide, it may recede from view, but it always returns.
Consumers will not forget the taste of control once granted. Banks and fintechs alike will not unlearn the power of reliable, affordable connection. The very architecture of our financial lives is changing, whether regulators approve or not.
In this unfinished tale of two nations, the only certainty is that the genie is out of the bottle. Open Banking, in one form or another, is coming. Not because it is convenient or trendy or fair, but because it is necessary.
The tides are shifting and they are not done yet.
Eyal Sivan, general manager of North America at Ozone API & Mr. Open Banking, is chairing the Main Stage at Open Banking Expo Canada on June 17 in Toronto. He is also speaking on a Powerhouse Debate at Open Banking Expo USA on June 26, in New York, titled ‘The new era of Open Banking in the United States’.
Ozone API is an Event Partner of Open Banking Expo Canada and Open Banking Expo USA.
