Federal competition officials are warning that consumer mistrust could derail Ottawa’s long-studied push toward open banking, with many Canadians uneasy about sharing their financial data.Blacklock's Reporter said in a report, the Competition Bureau said data portability remains poorly understood and is likely to face resistance from consumers, limiting uptake of concepts such as open banking that have been examined by the Department of Finance since 2019.“Understanding what drives consumers to embrace new technologies is essential for successful innovation,” the bureau said, noting that data portability is still unfamiliar to many Canadians and raises concerns around privacy and security.The report, Your Data, Your Control: How Data Portability Can Unlock Competition And Empower Consumers, said while data portability could offer benefits to both consumers and businesses, it also creates challenges that must be addressed before widespread adoption is possible.Open banking would allow Canadians to electronically compare loans and deposit rates by consenting to share their account information with third-party financial technology firms. Although the bureau did not conduct a detailed analysis of open banking itself, it suggested similar data-sharing systems in sectors such as insurance could save policyholders billions..The bureau said behavioural barriers play a major role in limiting adoption, with consumers often sticking to familiar services even when better options exist. Switching banks, insurers, or network providers can be time-consuming and confusing, discouraging people from moving.Concerns about privacy, uncertainty about costs, and a lack of awareness of potential benefits all contribute to reluctance, the report said, warning these factors could keep Canadians from embracing data portability.The concept of open banking has been under review by the finance department since 2019, when officials floated changes to the Bank Act that would allow financial institutions to share customer data for sales and service purposes. No regulations followed.Subsequent government-commissioned research found the idea itself was unpopular. Focus groups showed Canadians reacted negatively to the term “open banking,” with many expressing immediate discomfort and distrust..The issue has also been raised at the Senate banking committee, where witnesses said open banking could deliver significant benefits but raised unresolved questions about data ownership and safeguards.During 2020 hearings, University of Western Ontario law professor Christopher Nicholls told senators the economic benefits could be substantial, but acknowledged concerns about who ultimately controls consumer data remain contentious.Years later, Ottawa is still studying the issue, with public skepticism standing as a major obstacle to any move toward open banking in Canada.
