Canada: Sorry, The Connection Just Isn't There Anymore

Canada is a vast, complex and diverse country. We’re lucky to have thousands of Canadians make PocketSmith their home for personal finances to craft their money adventure. Unfortunately, though, they’re plagued with unreliable bank feeds for the vast majority of Canadian banks, despite the ongoing efforts of ourselves and our data partners.

Myriad changes to the landscape of bank feeds have occurred since we first launched in Canada. The ongoing rise of cybercrime and hacks across the internet mean that banks are on alert more than ever. The release of open banking in many geographies — which has not been without problems — means the bar has shifted for the banks, with higher consumer expectations for accessing and sharing their banking data.

So, I’d like to take a moment to opine based on my experience serving customers’ bank feeds for over 11 years: What we’ve done and doing, what the banks could do, what the government should do, and finally, what you as a consumer can do to effect change.

If you’d like to get to the chase, skip to the part where we discuss what pressing pause on actively serving Canada means, if you’d like. Otherwise, read on for some background.

Background on Canadian bank feeds

We’ve offered bank feeds to Canadian users for over a decade. Traditionally these were provided by our original data provider, Yodlee. Service was reasonably good — as traditional bank feeds were in the early 2010s (traditional bank feeds are when the data provider pretends to be a customer logging into online banking, gathering account and transaction information).

Bank feeds usually failed to sync for two reasons: An outage with the bank’s website; or the online banking user interface had changed, meaning Yodlee needed to change their scripts which navigated online banking to retrieve account and transaction data. All bank feeds worldwide only failed for one of these two reasons.

And things were usually that simple. It was the wild-west, with bank feeds never being sanctioned by banks, despite also being used by banks for their internal services. It was a better time than anyone ever gave it credit for.

What has changed in the past couple of years

Traditional bank feed reliability has tanked in the past three to five years due to increased cybercrime and people getting scammed. Multiple high-profile hacks are hitting the news every year, and more people are getting tricked into sending money to scammers than ever before. Banks had to act.

And act, they did. Big and small banks have introduced a slew of security measures designed to protect customers. While the data providers could work with most multi-factor authentication systems, the challenge is far greater for bot detection mechanisms like Google Recaptcha. These are usually presented as several picture tiles to click on with a prompt, confirming that you’re a human logging into online banking. These work very well in preventing robot access, so data providers are locked out.

Banks are also now deliberately targeting and blocking data providers’ access. Traditional bank feed data providers run scripts on servers, attempting to log into people’s online banking. These servers can be identified by the banks and blocked from access.

For whatever reason (likely to protect them financially), Canadian banks have committed to this process more than most — meaning they now have terrible reliability statistics.

What we’ve done in the past

Our first move was to add Plaid as an additional data provider to sit alongside Yodlee at the end of 2021. Our understanding at the time was that Plaid would solve many Canadian’s data connectivity issues and, at the very least, offer an alternative to our incumbent data provider Yodlee. Unfortunately, it was not smooth sailing, and we’ve generally seen the same success statistics for both Yodlee and Plaid in Canada, with a few exceptions.

We’ve been rolling out Plaid to customers over the past year, enabling feeds for banks that don’t have a Yodlee counterpart or where things were more reliable. Our excellent customer support team has added the rest when people get in touch.

Due to Plaid being as stymied as Yodlee when connecting to Canadian banks over the past year in our experience, we recently started investigating other potential data providers in Canada. We found a Canadian company that espoused better reliability.

Still, sadly they’re not priced appropriately for a company that earns revenue from subscriptions and no other source, at many times the price of their most expensive competitor. This extra cost could only be worn by high-margin businesses who earn money from their users in other ways (think product kick-backs, selling customer data, high-interest loans). This is not PocketSmith. In addition, supplied statistics for the ongoing reliability of feeds made it clear that even at the higher cost, things still aren’t good enough for PocketSmith customers.

What we’re doing now

Now — for better or worse — we’re enabling Plaid feeds for all Canadian banks, even those with aggressively poor reliability. Most Canadian banks will now show either “via Plaid” or “via Yodlee” next to feeds in search listings.

But which of these will work? To indicate, we’ve started compiling a list on our Learn Center with current success statistics for each Canadian feed. Use this as a guide to indicate which banks work best with Yodlee and Plaid. We will update this document regularly as more people add Plaid feeds of their own volition.

We fully recognize that these statistics are dire for Canadian bank feeds, and we see them mainly staying the same before significant change happens — i.e. open banking gets introduced.

As a result, we’re making the difficult decision to press pause on recommending PocketSmith to Canadians because we do not believe that our users should put up with Canada’s disappointing bank feeds.

What pressing pause means

We want to be clear about what this means for our current and potential Canadian customers: we’re not actively withdrawing from Canada; however, how we service Canadian bank feeds will differ from how we service other geographic regions.

1. Canadian users can still join PocketSmith without restriction.
2. All Canadian bank feeds we have access to are still able to be added.
3. But, we will not provide customer support for Canadian bank feeds displaying errors. We will not open tickets with Yodlee or Plaid.
4. So we will offer bank feeds without active support, but our 14-day refund policy will still apply.
5. We will also be providing a 30% discount to all Canadian users who experience bank feed issues and get in touch with us.

We will supply this discount to people on an honor system, as it only applies to people who’re only using Canadian bank feeds. If you use bank feeds in other regions with active support from PocketSmith, the discount will not apply.

Our Canadian customers can still do the following

1. Import transaction files downloaded from your bank into PocketSmith, using our bank file upload features
2. Continue to use all other features of PocketSmith and control your finances with all your data in one place
3. Email our Support team for any non-bank feed-related assistance required

With that clarified, please keep reading for what is next for us in Canada. Or, if you skipped here, feel free to jump back to the top for some background leading to this change.

What we’re going to do in the future

The best way to move forward will be for the Canadian government to introduce open banking, so we’ll be lobbying for better Canadian consumer data rights. People worldwide are starting to enjoy the additional data access that Consumer Data Right (CDR) laws provide them, and Canada needs to catch up.

In time, we’d like to pull together a community to guide how individuals want to use a CDR in Canada. We’ll consider making submissions to the Canadian open banking working group, providing the unique perspective of PocketSmith and its users. The working group meetings being undertaken currently are packed with aggregators and banks. They should hear our voice and that of our users.

In the future, we’ll be able to re-enter the Canadian market. We have a fantastic product that a Consumer Data Right in Canada should elevate — that is, your ability to own and share your financial data with the providers you choose.

What the banks could do

But putting aside our moves, let’s focus on the real boogyman: The banks. Ever since we’ve existed — nearly 15 years — any bank could have provided their customers secure access to their account and transactional data.

They’ve set up these systems before. Every bank with a native mobile app uses the technology banks could use to provide customer access to their data. Some banks did provide these public APIs (the “challenger” banks, a plethora of which launched around three to five years ago) — these have almost been wholly bought out by big banks, stifling further innovation.

All bank feed data providers are willing to work with banks to implement secure data access methods that don’t risk people breaching their online banking terms and conditions. Any bank can reach out to either Plaid or Yodlee, and their technical teams would be happy to ensure a reliable and pain-free bank feed.

The upshot is that banks serve their shareholders. Sadly, they believe that the most significant shareholder value comes from something other than allowing customers to control their data. Their drive for profit means they need to be forced by legislation to provide this customer-centric service.

What the government should do

Open banking is a certainty. The USA is the only locality where we’ve seen any secure data sharing occur without government intervention. Notably, these are a small group of huge consumer banks who previously used traditional bank feed technology anyway — implementing more efficient data sharing will have saved them high costs.

Elsewhere, the UK and EU have had the revised Payment Services Directive (PSD2) regulations since 2019, and in July 2021, Australia has the CDR legislation come into full effect. These laws were designed by governing bodies within these localities, mandating the bank’s responsibility to provide their customers with interoperable data sharing for their financial data.

In Canada, this process has just gotten underway. In March 2022, the government appointed a leader for the development of open banking in Canada, and open banking working group meetings commenced in July 2022.

Because of this late start, the time horizon might not be great. For example, Australia’s CDR commission was formed in May 2017, but meaningful bank feeds from mid-tier banks only became available to data providers in July 2021. Extrapolating from Canada’s appointment of a leader in March 2022, it would be reasonable to expect a four-year timeframe before anything becomes a reality here; the year 2026.

Governments and banks both work on years-long timeframes. With that understanding, the best thing a government can do in the short term would be to allow traditional bank feeds to be legitimized until an open banking system is in place. A mandate from the Canadian government to move traditional bank feeds from a grey area into an unfortunate necessity would make a huge difference.

And finally, we hope that the Canadian government learns from the mistakes made in previous attempts at open banking legislation. The PSD2 in Europe did not include savings or mortgage accounts, and the CDR in Australia needed more reasonable provisions for joint account sharing. The open banking steering committee should take on the learnings from the industry in these localities.

What you can do

The main power you have is moving your business to a bank that allows Yodlee and Plaid to gather your data for you. Our best Canadian feeds Learn Center article will be kept up-to-date with the options that you should look into if you want good feeds in PocketSmith.

You can also make it clear to your government representative that a Consumer Data Right and open banking is crucial to you as a Canadian citizen. We’ve seen time and again that the only way that the banking industry will respect their customers’ desire to use products like PocketSmith is through being forced by a government authority with legal power over the bank to do the right thing.

What can we say in conclusion?

… except that we’re incredibly disappointed that it’s come to this. We’re proud to service the world with PocketSmith, and Canada has been a fundamental slice of the global pie for us. Most of our Canadian customers have been a delight to work with, and we can completely empathize with the frustration expressed by those that weren’t.

We still welcome users from Canada, but we wish the circumstances were different so that we could offer you the support you deserve for bank feeds. We have the best file upload feature in the market, and we’re also continuing to improve on this in the coming months.

We’re hopeful that the Canadian government will move swiftly on open banking now that there are multiple global examples of how to achieve it. We’d love to be wrong about our extrapolation of 2026 being when we see open banking become operational inside PocketSmith for Canadian customers. We’re also hopeful that the banks will start working with data aggregators instead of being antagonistic — but that’s a long shot.

So with that, it’s been an exceptional ride, Canadian users. Thank you for placing your support and trust in us — we hope that this is just a temporary bump in our long road together. We’d love to hear any thoughts you have, and we’d also love for you to give your bank hell for being anti-consumer. Take that, banks.

James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with three humans, one axolotl, one rabbit, one dog, and too many possums.