Mike Cascone is the VP, Government Relations and Public Policy, at Xero Canada.
The 2025 federal budget delivered something Canadian small businesses have been desperately waiting for: firm timelines for implementing open banking, or as regulators call it, “consumer-driven banking.”
The government has finally committed to accelerated implementation, and even if most small businesses haven’t heard much about open banking yet, it’s something worth celebrating. This budget announcement represents a turning point for Canada’s 1.2 million small businesses, who have been operating at a competitive disadvantage while other countries surged ahead with open banking systems.
For small businesses, this isn’t just about innovation; it’s about survival and competitiveness in an increasingly digital economy. Real entrepreneurs have been struggling with outdated financial systems while waiting for this change, and I’ve been working closely with many of them.
Consumer-driven banking supports the flow of financial information between businesses and their financial tools. Small businesses can finally take advantage of the breadth of tools available to them, with benefits including increased efficiency, better access to capital, and improved decision-making capability. Ultimately, this lets entrepreneurs focus on what they know best: running their business.
At Xero, we’ve been a leading voice advocating for this progress, working closely with government stakeholders. We’re excited to support the implementation of the framework as it moves forward.
The real-world pain points being solved
I’ve heard stories from entrepreneurs I’ve worked with who are living through the challenges of our closed system every day. For example, many small businesses struggle to see their financial picture in real-time. Without proper tools, businesses can be cash-rich on paper but unable to make payroll.
Sean Hoff, CEO of Moniker Partners, a corporate retreat planning company, started as many companies do: with Excel sheets, trying to track everything. Managing 20-30 payments in and out, multiplied by 20 clients, created something unscalable.
“You feel like an air traffic controller trying to stay on top of all of these flights that are coming in and out, but half your screens are dark,” Hoff explained.
Fintechs have been eagerly awaiting this announcement. Companies across the ecosystem understand the barriers our current closed system presents.
His biggest advice to new business owners? “Cash flow is king. You might be doing a whole bunch of sales, and you might think that business is booming because you’ve got revenue coming in, but if it’s taking 30 days, 45 days, 60 days to collect that, you might go out of business before you see that revenue.”
With proper financial tools, the difference is stark. “Being able to see and flag revenue and the time it’s taking you to collect is really important to make decisions,” Hoff said.
I’ve also seen small businesses waste countless hours on manual data entry and financial reporting: time that could be spent growing their businesses instead. Emrah Eren, CEO of Duco Media, an Ottawa-based marketing agency, started with Excel files and creating invoices in Word, then converting them to PDF. During COVID, producing financial statements for funding applications took “hours and hours and hours.”
For businesses operating internationally, the challenges multiply. Hoff’s experience receiving and making payments in multiple currencies created problems with platforms that didn’t handle foreign exchange well. Open banking will enable better integration with tools that can track FX automatically and convert to Canadian dollars for P&L statements, which is critical for any business operating internationally or dealing with foreign suppliers and clients.
Entrepreneurs also need access to real-time dashboards, with analytics at their fingertips. “Having those kinds of analytics at your fingertips is extremely helpful to make reliable decisions… being able to reliably look at the numbers and being able to predict when it might happen,” Hoff said.
Open banking will make these capabilities standard, not premium.
The fintech community is ready to deliver
I can tell you that fintechs have been eagerly awaiting this announcement. Companies across the ecosystem understand the barriers our current closed system presents, and there’s a strong sense of optimism about the potential for innovation once the framework is in place.
As a global company operating in regions with open systems like the UK, we at Xero know that open banking is a complete game-changer. We’re ready to support implementation and deliver enhanced services, prepared to collaborate with government stakeholders to make this a reality.
Implementation won’t happen overnight, but the momentum is here. Fintechs and financial services companies are ready to collaborate and deliver. Small businesses can look forward to a more competitive, efficient, and secure financial ecosystem.
Xero is proud to be a leading voice for small businesses in this conversation, having worked closely with government stakeholders to advocate for this progress. We’re excited to be supporting the implementation of the framework as it moves forward.
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To learn more about how open banking can benefit small businesses, visit opensme.ca.
Feature image courtesy Xero Canada.