MONTREAL — Silicon Valley-based fintech giant Plaid is planning to increase its focus on Canada, as the country’s impending implementation of an open banking system promises to accelerate the growth of third-party financial apps and services.

“There’s significant action that’s happening with our customers here right now,” said Mark Sam, a Toronto-based Plaid executive who oversees financial-institution partnerships, in an interview with The Logic. “We’ll be looking to open up an office in the near to medium term.”

That would help Plaid attract more Canadian businesses to its API software, which allows apps to access data from bank accounts. Some of its most prominent customers in Canada include Wealthsimple, Shopify and Clearco.

A Plaid spokesperson said the company hasn’t made a final decision yet on whether it will open an office in Canada, and if so, where it would be located. Still, the company, which entered the market in 2018, says it has been investing in its expansion: it hired a Canada lead earlier this year, and has sought additional staff for a growing sales team in the country. 

Plaid’s total headcount focused on Canada has increased between three and four times in the last 12 months, Sam said, though the company didn’t specify exact numbers. Its customer base in Canada has grown rapidly, as well, tripling in the last two years, a spokesperson said.

Plaid’s push in Canada comes ahead of the government’s planned rollout of an open banking system that will require the country’s banks to share customer data with apps. That framework—which could arrive as soon as January 2023 if the reelected Liberal government follows the recommendations outlined in its advisory committee’s report—is expected to increase competition in financial services by allowing startups to more easily build products that use consumer data.

In a win for the Canadian fintech sector, both the Liberals and the Conservatives—who will be the second-largest party in the new Parliament—made campaign promises to implement open banking. While some in fintech said the commitments still don’t go far enough, John Pitts, Plaid’s global head of policy, told The Logic the open banking recommendations on their own would significantly change the business landscape in the Canadian market. 

“If the report was adopted, I think it would very quickly make Canada the leading open finance country in the world,” Pitts said. 

The next step in implementing the open banking framework would be to appoint a government official in charge of overseeing the issue, a move that wasn’t expected until after the election, Pitts said. In its report, the advisory committee called for that official to eventually yield oversight of the system to a body composed of both industry and consumer representatives.

Meanwhile, Plaid’s expansion into Canada could pose a challenge for Flinks, a Montreal-based data provider that National Bank agreed to acquire in a $103-million deal this summer. Flinks was founded in 2016 and had roughly 100 employees as of earlier this year, according to data from PitchBook. On its website, Flinks says it currently has coverage of more than 10,000 financial institutions in the U.S. and Canada.

Plaid, one of the world’s most valuable fintechs, has big backers of its own, and far deeper pockets. The company raised US$425 million in its Series D fundraising round in April, at a reported valuation of US$13.4 billion. In August it announced it had raised additional funding from American Express and JPMorgan, whose CEO, Jamie Dimon, had previously criticized the company’s data practices. Goldman Sachs has also backed it in earlier rounds.

One of Plaid’s biggest selling points for Canadian customers is its scale, which, aside from the U.S., includes operations in the U.K., the Netherlands, Ireland, France and Spain, Pitts said. As Canadian companies grow their businesses internationally, Pitts said, Plaid’s presence in other countries could allow them to more easily expand to new markets.

For some customers, that could give Plaid an edge over Flinks, which also has its sights set on international expansion. Flinks plans to use the capital from its deal with National Bank to grow its operations in the U.S., its CEO told The Logic in August, though the Canadian fintech has a much smaller footprint abroad. Flinks declined to comment for this story.

“None of these great Canadian fintechs are looking to be Canada-only companies,” Pitts said. “One of the great things about working with these companies is we can offer them the opportunity to expand with Plaid using the APIs and rails they’re already familiar with in Canada.”

Editor’s note: This story has been updated to clarify the timing of Plaid’s Series D.