Open banking to 'increase competition in the market,' provide choice: industry players

Industry players welcomed the open banking measures in the budget, saying it could spur competition in Canada’s lending landscape.

Earlier this month, the federal government announced plans to move forward with open banking initiatives in its 2024 budget. Also referred to as consumer-driven finance, open banking would give consumers the ability to securely share financial data across institutions and apps to take advantage of different services like wider options for loans or managing a budget. 

“I think the biggest advantage is really the increase of competition in the market…It will impact the customer because they will have more choices (and) more features. You're going to see more innovation in the market,” Mahima Poddar, the group head of personal banking at EQ Bank, said in an interview with BNNBloomberg.ca on Wednesday. 

“And the reason for that is that once you break constraints around data and they can move more freely, what it does is it gives customer autonomy (and) the ability to choose which financial provider they want to work with without the friction of the switching pain that exists today.”