As the financial services sector awaits clarity from Ottawa on how banks must provide data to fintechs under upcoming open banking rules, a trial version of a data-sharing platform being peddled by bank-owned tech company Symcor is breeding suspicion.

Since the summer of 2023, the joint venture between TD Bank, Royal Bank of Canada and BMO has been inviting companies to test a dummy version of Cor.Connect, a software platform designed to fetch data from banks and provide it to outside firms to power accounting software, budgeting apps and other fintech services. However, fintechs have been lobbying for the government to require banks to provide such data directly and for free as it rolls out open banking, which is set to launch in 2025. 

That’s why tensions are running so high over Cor.Connect. Five people who work for financial services companies that have been approached about the Cor.Connect trial told The Logic they’re concerned that Canada’s big banks will eventually force their businesses to use the platform to access customer data, as some U.S. banks have done with a similar bank-owned hub. The people did not want to be identified out of concern for damaging their relationships with Symcor and its owners. 

Participating in the trial is currently free for fintechs, but the sources said they’re worried Symcor will eventually charge them. 

One source said they “get a bit of the heebie jeebies” at the idea of bank-owned Symcor potentially acting as an open-banking data hub. Without clear rules from the government on how the banks must provide data, “this could get lost in another Canadian monopoly,” they said.

Asked if Symcor plans to charge fintechs for access to open banking data, chief strategy officer Saba Shariff told The Logic the firm is still finalizing Cor.Connect’s commercial details. However, Symcor acknowledges providing the data for free would encourage adoption and innovation, “and that is our intention,” she said.

The Logic asked the Department of Finance if banks will be allowed to make their data exclusively available through platforms like Cor.Connect and whether such aggregators will be allowed to charge fintechs for access to open banking data. Finance official Marie-France Faucher said the Financial Consumer Agency of Canada, the organization responsible for overseeing open banking, is still working on the framework that will set out such rules. Consumers will not incur fees for accessing and sharing their data under open banking, she said. 

Shariff said Symcor is committed to ending screen scraping—the current method fintechs use to access customer bank data, which requires clients to hand over their account login credentials to a third party and trust they won’t be abused. It will be up to the banks to decide whether they want to force fintechs to use Cor.Connect to access open banking data, she said.

The Logic asked TD, RBC, BMO, CIBC and Scotiabank whether they hope to offer open banking data exclusively through Cor.Connect and whether the government should allow such exclusivity agreements. Scotiabank, CIBC and BMO deferred to Maggie Cheung of the Canadian Bankers Association, who said in an emailed statement that while the organization can’t comment on commercial arrangements between companies, it advocates for “robust access that protects Canadians and their data while promoting competition.”

Franklin Garrigues, TD’s vice-president of external ecosystems, said in an emailed statement that the bank “is focused on upholding the safety and security of customer data” and supports an open banking framework “that benefits all Canadians.” RBC acknowledged The Logic’s request for comment, but did not respond by deadline.

The Logic has previously reported that incumbent banks have pushed behind the scenes for Symcor to become the country’s de facto industry-wide technology provider for open banking. Symcor has been floated as a potential open banking “utility,” like a water or electricity company, but in this case providing the system’s data infrastructure. 

For now, the concept is purely hypothetical. So far, National Bank is the only large Canadian bank to release a data feed that could plug into a platform like Cor.Connect. The software currently only offers dummy data from a mock bank.

The degree of control banks are able to maintain over how their data gets shared is an issue with high stakes and a long history of adversity between banks and fintechs. It will determine how many new fintech businesses and products can be introduced, which apps consumers can access and how successful banks will be at converting their valuable data into shareholder returns.

Fintechs and open banking proponents pointed to the U.S., which is developing its own open banking regime, as an example of their concern if banks are permitted to do that. A consortium of American banks, including TD, jointly own a tech company called Akoya, which provides a similar service to the one Symcor is proposing to provide through Cor.Connect.

Akoya shareholders Fidelity and PNC Bank have come under fire by U.S. consumer groups for requiring fintechs to exclusively use Akoya to access customer data. Last year Fidelity warned clients they could be cut off from the popular payments app Venmo if they don’t use a “secure connection”—ideally provided by Akoya.

Alex Vronces, executive director of the industry group Fintechs Canada, said he has raised this concern with the Department of Finance. “What the government is trying to do with open banking would be undone by giving the biggest banks the freedom to impose additional terms and conditions on fintechs through back doors,” he said in a statement.

For now, banks, fintechs and aggregators are locked in a stalemate. Most of the fintechs The Logic spoke to said they’re waiting to see Ottawa’s data-sharing standards before signing up to test Cor.Connect.

Widespread suspicion among fintechs is a business problem for Symcor, which needs to sign them up as clients if Cor.Connect is going to succeed. Two of The Logic’s fintech sources said it has been challenging to get Symcor to provide clear answers about what data will be available through Cor.Connect and what the terms of use will be. 

Shariff, Symcor’s chief strategy officer, said she believes Cor.Connect will ultimately benefit both banks and fintechs, but did not dispute that convincing the latter to test out the software has been difficult. “They need a product that is more ready for prime time,” she said. “We hope to be in a better position in the next several months to be able to provide a lot of that clarity.”

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Catch-up quick: The evolution of open banking data 

Open banking hasn’t launched in Canada yet, but customers are already sharing their data with fintechs—in a way that is making policymakers nervous.

Say you want to use a spending-tracker app, which combs through your bank account and credit card statements and puts your purchases into groups to help you understand how much you’re spending on groceries, entertainment and other categories. Currently, you must give the app login information for all the accounts you want included in the assessment.

Typically, the fintech that operates the spending tracker contracts a second fintech, called an aggregator, to collect your data from the bank’s website and move it to a database. It’s the technological equivalent of giving them a shoebox full of your paper bank statements. It’s cumbersome, error-prone and requires you to trust both fintech companies—which are much more lightly regulated than banks—not to sell your financial data, leave it vulnerable to theft or steal your money.

In June, the government passed the Open Banking Act, the first of two sets of legislation designed to improve the situation. Open banking will require banks to provide customer data to fintechs in a more secure way, through what are called application programming interfaces, or APIs.

If screen scraping is like giving a fintech a shoebox full of your bank statements, an API is like the bank giving the fintech your data directly—with your consent—on a USB key. Open banking proponents expect such access to easy-to-use bank data, straight from the source, will let fintechs offer new and better products, improve financial efficiency and promote competition.

Bank-owned tech company Symcor has developed a test version of software called Cor.Connect that would act as an aggregator for the open banking age. Cor.Connect is hoping to offer the same service that aggregators currently provide, but by plugging into bank APIs directly instead of screen scraping.

It remains to be seen whether the government will require banks to grant fintechs direct, open access to their APIs once they’re available. Returning to the analogy, it’s possible the banks will have to hand the USB keys of data to the fintechs directly—but it’s also possible banks will be allowed to insist fintechs get the USB keys from an aggregator like Symcor, possibly for a fee.

Aggregators, fintechs and banks are all on tenterhooks waiting to see how the legislation—and the future of their businesses—will shape up.