Announced as part of the federal budget, news of the review comes six months after the department of finance said that it would investigate the merits of following the UK and Europe in pursuing an open banking model.

The government says that making it easier for people to let third parties access their banking data could spur providers to offer more tailored products and services, on a more competitive and innovative basis. In addition, customers could benefit from greater transparency, helping them to make more informed decision and move and manage their money better.

However, the budget acknowledges the potential pitfalls of open banking, stressing it would have to have the "highest regard" for consumer privacy, data security and financial stability.

The Canadian Bankers Association has already raised concerns about all three of these issues. In a response to the department of finance late last year, the association warned that giving third parties access to customer data could "give rise to contagion, reputational and other types of risks with broad-ranging consequences".

Nevertheless, the association says that it would "welcome the opportunity" to work with the government on understanding the risks and how they can be mitigated.

Elsewhere in the budget, the government says it will introduce legislative amendments to implement a new framework for the oversight of retail payments, while a review of the Canadian Payments Act will look to ensure that Payments Canada is "well positioned to continue to fulfill its public policy objectives of ensuring the efficiency, safety and soundness of its systems."