Open Banking is expected to reshape lending in Canada, particularly for small businesses and underserved consumers, as the industry moves toward more data-driven decision-making.
At Open Banking Expo Canada 2026, Mark Sam, founder and managing director of Major Street Advisory, moderated a Fireside Chat on the Main Stage with Andrew Graham, co-founder and chief executive officer of Borrowell and Brent Reynolds, founder of Payson Solutions, during which they explored how access to permissioned financial data is enabling lenders to move beyond traditional credit scoring models and develop more comprehensive approaches to underwriting.
Graham highlighted that lending decisions have always relied on three core factors: identity, ability to repay, and willingness to repay. Open Banking, he noted, has the potential to strengthen all three by providing access to real-time financial data.
Dynamic alternative to traditional credit data
A central theme of the discussion was the rise of cash flow underwriting. By analysing transaction data, lenders can gain a more accurate and up-to-date view of a borrower’s financial position, including income patterns, spending behaviour and overall financial stability.
Reynolds described this shift as one of the most significant developments in lending in recent years, noting that it offers a more dynamic alternative to traditional credit data, which is often limited and lagging.
“I think that’s going to be the biggest innovation since the introduction of the consumer credit score, the FICO score, back in 1989,” he told attendees. “Especially for people that are new to credit, it really solves that chicken and egg problem that you need a good credit history to get credit, but you need credit to get a good credit history.”
Rather than replacing credit scores entirely, speakers emphasised that cash flow data is likely to complement existing models. Combining both sources allows lenders to build a more complete view of risk and make better-informed decisions across the customer lifecycle.
Graham explained: “A product that we’ve had in market for a number of years now is Rent Advantage, which is our product that allows consumers to report rent payments to the credit bureaus. That’s putting data that’s traditionally been more cash flow-type data… into the lender directly.”
This approach also has important implications for financial inclusion. Borrowers with limited credit histories may be able to demonstrate creditworthiness through consistent cash flow, helping to address long-standing barriers to accessing credit.
The session also highlighted the potential to reduce friction in the lending process. By replacing manual documentation with secure, permissioned data access, Open Banking can streamline onboarding and improve the customer experience.
However, speakers noted that successful adoption will depend on how effectively these capabilities are integrated into core lending products. Treating Open Banking as a secondary or fallback option may limit its impact.
Fraud prevention
Beyond underwriting, access to verified financial data is also expected to play an increasing role in fraud prevention, providing lenders with additional tools to assess risk before funds are disbursed.
“If there’s one thing I hear a lot about that I’ve heard probably more than any other concern in the last six to 12 months from lending partners, credit card partners, et cetera, is a big increase in fraud,” said Graham.
“I think consumer-permissioned banking data is one more tool to help fight that because it just is one more level of complexity for a fraudster.”
While many organisations are already exploring these capabilities, panellists agreed that broader adoption will depend on the rollout of a full Open Banking framework.
Sam told those in the room who are thinking about, or already piloting, some form of alternative data or cash flow underwriting to “really go for it”.
“Figure out what the bigger piece of the pie is from a business case perspective. Get the stakeholders in line,” Sam concluded. “The other big part is… continue to push for what that date is going to be. And we will finally get to a point where we can access Open Banking via APIs for cash flow underwriting.”
Further reading: Consumer-Driven Banking – Scaling trust and confidence for Canada’s Open Banking future
