Following the release of the 2024 fall economic statement, Fintechs Canada today expressed concern that the federal government’s continued focus on high-visibility announcements has not yet been matched with measurable follow-up action that benefits Canadian consumers and small businesses.
“This government’s approach to making banks work better for Canadians is mostly talk and little action. There have been so many announcements that we’ve lost count of them all. But there have only been a few instances of follow through,” said Alex Vronces, executive director of Fintechs Canada. “Most of what this government has done over the years is bargain with a banking oligopoly for negligible gains, rather than exposing the banking oligopoly to the very thing the government concedes can lower prices for Canadians: competition.”
“It’s fine for the government to commit itself again to open banking, which will put Canadians in control of their financial data, rather than their banks. But we can’t announce our way to open banking,” he added. “If we could, we’d have had open banking by January 2023, which is when the government originally committed to launch open banking.”
Vronces acknowledged that after nearly eight years of consultations and reports, the government finally introduced legislation to establish components of Canada’s open banking framework. However, more measures are required, which includes the remaining elements of legislation, as well as regulation. The Financial Consumer Agency of Canada also needs to hire and train personnel to perform the role of open banking overseer and accreditation authority.
The fall economic statement also made no mention of the real-time rail, despite the government’s suggestion that payment processing costs are too high. Payments modernization has faced similar challenges as open banking. Since the need for an updated payments system was recognized in 2011, progress has been slow. Despite numerous commitments, tangible results have often failed to materialize.
Canada’s real-time payment system, the RTR, was initially promised to launch in 2019. This date was moved to 2022, then 2023, and now the RTR is not expected to be operational any earlier than 2026.
“Without launching the RTR, competition in banking won’t be boosted, and Canada’s big banks won’t be compelled to work harder for Canadian consumers and businesses,” said Vronces. “We’ve had more than enough announcements. Now Canadians need the government to act for a more competitive financial system that prioritizes their hard-earned money.”
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Alex Vronces, Executive Director
