Canada    FinTech Guide    Chapter 8    Canada

8. Online Banking Services
Canada  Canada

Currently there are no laws which require banks to allow Fintechs to access bank data, but certain regulators are looking into the issue. We are also unaware of any strong push to relax the requirements to set up or operate a bank which might make it easier for Fintechs to offer BaaS or BaaP services.

Legal Affairs

While we are not aware of any Fintechs offering API-banking in Canada at this time, no special license would currently be required to offer such services.

To offer Bank as a Service or Bank as a Platform services, a Fintech would currently be required to establish a bank under the federal Bank Act. This is a complex and lengthy process which requires the approval of the Office of the Superintendent of Financial Services, the issuance of Letters Patent by the Minister of Finance and the issuance of an order by the Superintendent of Financial Services which allows the bank to begin carrying on business. There is a $32,000 fee to obtain the letters patent of incorporation and substantial ongoing compliance obligations to maintain bank operations, including minimum capital requirements.

Economic Conditions

According to the Canadian Banker’s Association, 72% of Canadians use online and mobile sources as their primary means of banking. This is up from 52% in 2012.

17% of those Canadians bank primarily on mobile devices (up from 9% in 2015).

We are seeing a lot of collaboration with Fintech companies and the big Canadian Banks to provide services and products but also some traditional financial institutions have developed their own in-house fintech expertise through organic growth or direct acquisitions.

Contributing Authors

Miller Thomson LLP

Nora F. Osbaldeston
Toronto, Canada

Shibley Righton LLP

William L Northcote
Toronto, Canada

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Chapter Index:

1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018