Jason Leong is the CEO and co-founder of PocketSmith, a personal financial management platform serving customers in 190 countries, including markets with mature open banking regimes.

Canada is about to make a category error.

As the Bank of Canada takes over oversight of our consumer-driven banking framework, the dominant story being told about open banking is the same one regulators have told for a decade: open banking will increase competition by making it easier to switch banks.

It's a tidy narrative. It's also wrong.

Eight years of evidence from the United Kingdom and Australia tell us that open banking does not cause people to leave their banks in droves. What it does – when it works – is something far more valuable. It makes the entire financial system run better around the banks people already use.

If Canada's policymakers, regulators and journalists measure success by switching rates, they will look at open banking in 2028 and conclude it failed. They will be looking at the wrong scoreboard.

Speaking in Toronto in March, Acting Commissioner of Competition Jeanne Pratt made the standard case: open banking will reduce the barriers consumers face when switching providers, which will force banks to compete on price and service. She acknowledged that loyalty, complexity, and inertia are real obstacles. The right framework, she argued, can overcome them.

We at PocketSmith have spent 18 years building personal financial management software for people in markets that already have open banking. I can tell you what the data shows: the framework does not overcome inertia. 

In the U.K., switching is handled by a separate scheme – the Current Account Switch Service – that has been running since 2013 and routinely processes more than a million switches a year. 

Open banking layers data portability on top of that, in theory making it even easier to compare and migrate. 

And yet, when researchers ask consumers why they actually switched, the top answers are app quality, sign-up bonuses and interest rates. Open banking barely registers as a driver. 

The U.K. has removed essentially every technical barrier to switching, and switching is still driven by everything except data portability.

Australia's experience reinforces the point. The Australian Competition and Consumer Commission's (ACCC) retail deposits inquiry found that switching rates remained stubbornly low even after the Consumer Data Right went live in 2020.

This is not a failure of policy design, but instead a feature of how humans relate to their bank accounts.

People do not wake up wanting to migrate a decade of direct debits to save 20 basis points. They simply want their financial life to work.

The real prize

So what has open banking actually delivered?

In the U.K., the answer is innovation that happens above the bank, not in place of it. As of early 2025, open banking processed roughly 31 million payments in a single month, up around 70 percent year-on-year. Variable Recurring Payments – a use case that did not exist before open banking – now make up about 13 percent of that volume.

Lenders use open banking data to make credit decisions in minutes instead of weeks. One U.K. community lender, Salad, has used open banking data alone – no credit bureau check – to extend £164 million to more than 112,000 borrowers, many of whom would have been invisible to traditional scoring. Around half of U.K. lenders say open banking data has lowered their cost of credit decisioning.

Then there is the layer most consumers actually touch: personal financial management, budgeting, forecasting, embedded payments inside accounting software, and payroll. The U.K. now has over 15 million active open banking users – more than four times the population of Toronto – and almost none of them switched banks to get there.

Australia is the cleanest cautionary tale. The Consumer Data Right (CDR) launched in banking in 2020 and stalled almost immediately – by the end of 2023, fewer than one in 300 bank customers had an active data-sharing arrangement.

The federal government responded with a public reset in August 2024: bundled consents instead of separate approvals for every transaction, simpler authorization flows, and lighter disclosures up front. 

The effect was immediate. Active consumer participation more than doubled in six months, from around 226,000 in the first half of 2024 to over 530,000 by year-end. The ecosystem kept growing through 2025, and from July 2026, the regime extended to non-bank lenders.

The Australian Treasury and the ACCC now track consents, data-request volumes and ecosystem participation as their markers of progress. They are not tracking how many Australians switched banks, because that was never what the system was going to deliver.

This is the prize Canada should be aiming at. Not churn. A richer, more competitive ecosystem of tools, services and decisions that wrap around the bank accounts Canadians already hold.

Execution will decide everything

Here is the uncomfortable part. The prize is not automatic.

Today, even without a formal open banking regime, fintechs and personal finance management (PFM) providers in Canada connect to bank data through screen scraping and bilateral arrangements. The result is exactly what you would expect from a stitched-together system: connectivity that swings from 73 percent to zero overnight when an institution changes a login flow, transaction feeds that arrive incomplete, and consumers who lose trust in tools that were working fine yesterday.

A formal open banking framework is meant to fix this. But only if it is built for reliability, not just compliance.

A regime that produces sanctioned but unreliable application programming interfaces (API) will be worse than the status quo. It will give fintechs the legal right to access data that is technically available but practically unusable.

Innovation will stall. The incumbents who slow-walk implementation will win by default.

Australia's reset is partly a story about this. So is the long tail of complaints U.K. developers have logged against specific banks' API uptime. The legislation is the easy part. The plumbing is what determines whether builders show up.

The federal government's Consumer-Driven Banking Act, revised and re-passed via Budget 2025 implementation legislation, received Royal Assent in March. Ron Morrow, the Bank of Canada's Executive Director of Payments, Supervision and Oversight, told the same Toronto audience that the central bank is still in the information-gathering phase, with months of work ahead.

Those months are the most important window in the entire rollout, because three things matter more than the launch date.

What should Canada do now?

First, redefine success. Track API uptime, transaction-data completeness, third-party participation, and the volume of payments and lending decisions running through the rails. Do not benchmark Canada against itself on switching rates and call it progress.

Second, treat data quality as the regulated product. The deliverable is not just "access." It is reliable, complete and standardized access. Where institutions cannot meet uptime and data-completeness thresholds, regulators should be willing to publish names.

Third, design for builders, not just compliance officers. The fintechs and PFM providers who will create the next decade of value need test environments that work, documentation that is current, and dispute mechanisms that resolve in days rather than quarters.

Open banking will not make most Canadians switch banks. That is fine. It was never the point.

The point is that a Canadian small business owner should be able to apply for working capital on Tuesday and have funds on Wednesday because a lender could see 12 months of real transaction data with the owner's consent. 

The point is that a couple planning a mortgage should be able to see their full financial picture in one place without surrendering their banking password to a tool that should not have it. 

The point is that a developer in Kitchener or Halifax should be able to ship a product on top of Canadian banking data without spending two years negotiating bilateral data deals.

Those outcomes are worth building for. None of them require anyone to switch a bank account.

If we measure the right things, Canada's open banking framework can be quietly transformative. If we measure switching, we will spend the next five years apologizing for a success we failed to notice.

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