Open Data vs Open Banking: a guide for Canadian credit unions

As Canadian credit unions prepare for Consumer-Driven Open Banking in 2026, there’s a critical opportunity being missed: Open Data for credit assessment. While most discussions focus on account portability and switching, Canadian credit unions could leverage a much broader Open Data ecosystem for lending decisions, as UK credit unions have done since 2018.

In this article we explore the differences between Open Banking and Open Data and look at some of the use cases for an expanded data set for credit decision making both for personal and business loans. All of the following options are used in the UK credit union sector.

Open Banking vs. Open Data

Open Banking is the secure, member-permissioned connection to their chequing account at another financial institution. When a member applies for a loan, they consent to share their chequing account transaction history. As a result, Loans assessors have real-time access to income verification, spending patterns, and cashflow.

Open Data is the ecosystem. It’s everything that Open Banking enables, plus the other data sources you can now bring together to make fairer, faster lending decisions.

Understanding the difference between Open Banking and Open Data in Canada is crucial for credit unions preparing for 2026. Beyond chequing accounts, Open Data for lending decisions includes:

• Savings accounts demonstrate financial resilience. A member with $5,000 consistently maintained in savings demonstrates resilience even if they don’t have an extensive credit history. Regular deposits, even small ones, signal discipline and income stability that traditional bureau data cannot capture.
• Property data provides evidence of assets and equity that credit scores miss entirely. A member who owns property worth $750,000 with $500,000 remaining on the mortgage has substantial net worth and collateral options. This asset-based view transforms risk assessment, particularly for self-employed applicants or those with thin credit files.
• Credit cards show transaction-level spending revealing how members actually manage their credit. Bureau data that shows consistent full-balance payments and low utilisation can be verified and supported by spending patterns that might demonstrate good budgeting skills. This nuanced view separates careful money managers from those barely meeting obligations.
• Rent payments are probably the most consistent payment many younger members make. Importantly, such payments are invisible in credit files. For younger members and newcomers, rent often represents their largest and most reliable payment obligation, yet traditional credit scoring ignores it entirely. Twelve months of on-time $2,000 rent payments demonstrates far more creditworthiness than a thin bureau file suggests. Open Data makes this payment history visible and actionable for the first time.
• Member records are your own data on savings behaviour, account tenure, and product holdings. Credit unions already hold valuable behavioural data on their members that rarely informs lending decisions automatically. Five years of consistent savings deposits, multiple product relationships, and zero overdraft incidents tell a powerful story. Integrating your own institutional knowledge with external data creates the most complete risk picture possible.
• Credit bureau. The traditional credit file, now enhanced by everything else. The credit bureau remains important but is dramatically more powerful when contextualized by comprehensive financial data. A missed payment looks different when you can see it coincided with a job change but savings remained intact. Traditional bureau data becomes one input among many, rather than the sole determinant of creditworthiness.

For Canadian credit unions, combining these data sources means more “yes” decisions for younger members and newcomers, better evidenced SME lending, and quicker, more confident calls for underwriters without changing risk appetite.

Why Canadian credit unions need Open Data beyond Open Banking

Since 2018, NestEgg has been combining Open Data sources for UK credit unions, Open Banking, credit bureau, property valuations, and member data, to decision over 1 million loan applications. The UK’s open banking framework launched in 2018, giving us a seven-year head start on what Canadian credit unions will face in 2026.

The results demonstrate what’s possible. UK credit unions using our Decision Engine have:

• Reduced average member age from 47 to 34, capturing the younger demographic that Canadian credit unions struggle to reach
• Converted 15% of previous declines into approvals for creditworthy thin-file applicants, particularly crucial for Canada’s newcomer population and younger borrowers.
• Automated lending decisions that previously took 3-5 days down to minutes, improving member experience while reducing operational costs

The Canadian opportunity is even larger. Canada’s credit union sector serves 11 million members with close to $1/2 trillion in assets. With 380,000 permanent resident admissions annually through 2028 and a large existing newcomer population establishing financial roots, Open Data could unlock billions in responsible lending growth. The question isn’t whether to adopt Open Data, it’s whether you’ll be ready when Consumer-Directed Banking launches in 2026, or whether you’ll spend years catching up while competitors capture market share.

As Consumer-Driven Banking launches in 2026, credit unions that understand Open Data’s potential will have a significant competitive advantage

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