Financial technology is transforming how Canadians pay and manage money with unique solutions. However, innovation alone isn’t enough for securing a fintech partnership with banks. You must ensure thorough legal compliance before trying to collaborate with a Canadian bank.
Understanding both federal and provincial regulations ensures your fintech remains compliant and credible. A clear grasp of these laws not only builds trust with banking partners but also demonstrates your commitment to responsible financial operations. Read on to learn more.
Is Fintech in Demand in Canada?
The fintech market in Canada is expanding rapidly, with more people using financial technology. About 69% of Canadians used fintech services in the first quarter of 2025, such as digital apps for payments.
With the increasing adoption of fintech services, banks are now more than eager to partner with money service businesses (MSBs), payment service providers (PSPs), and crypto exchanges.Â
These collaborations benefit both sides. Banks gain innovation and agility, while your fintech gains market credibility and broader consumer access.
Legal Regulations to Consider When Forming a Fintech Partnership With Banks
To increase your chances of securing a partnership with one of Canada’s big 5 banks, start by ensuring strong legal compliance. Below are key regulations to consider before moving forward:
- FINTRAC Compliance
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) regulates how fintechs detect and report money-laundering and terrorist-financing activities. When partnering with a bank, you must:Â
- Register as an MSB with FINTRAC
- Implement anti-money laundering (AML) and know-your-customer (KYC) policies
- Perform regular compliance audits and keep transaction records for a minimum of five years
Demonstrating AML readiness is essential for meeting federal regulatory requirements and showing banks that you operate your MSB with integrity.
- Bank Of Canada Compliance
The Retail Payment Activities Act (RPAA) requires PSPs to register with the Bank of Canada. This regulation has been designed to offer security and reliability during retail payment activities.Â
Both local and foreign PSPs serving Canadian customers must complete RPAA registration before partnering with a bank. You must also implement a robust risk management framework for Bank of Canada compliance.Â
By aligning your business policies and frameworks with the Bank of Canada standards, you can build trust and reliability. An active RPAA license also allows banks to see that you’re operating legally in the country.
- PIPEDA Compliance
The Personal Information Protection and Electronic Documents Act (PIPEDA) governs how Canadian businesses collect, store, and share personal information. When integrating with a bank’s systems, you must:Â
- Obtain valid customer consent before processing personal data
- Ensure data storage and encryption meet national security standards
- Maintain transparency regarding how user data is handled
Establishing strong data-privacy practices will allow you to earn the trust of your consumers and potential banking partners. These measures also help you present your business as a reliable one.
- Provincial Regulations
Additional provincial regulations apply when operating in provinces such as Quebec. You must obtain a provincial MSB license from Revenu Quebec after completing FINTRAC license registration. Compliance with provincial regulations allows you to partner with a bank in the same province easily.
Canadian banks are cautious of partnering with fintechs that are partially compliant with AML and terrorist financing regulations. Incomplete compliance indicates your business lacks knowledge of provincial regulations, which is a red flag for banking partners.
Understanding regional variations ensures your fintech operations remain compliant across jurisdictions and helps you form national banking partnerships.
How to Partner With a Canadian Bank?
Forming a fintech partnership with banks is easier if you follow a structured method, such as the steps below:
- Build a compliant business model that aligns with FINTRAC, Bank of Canada, PIPEDA, and Revenu Quebec guidelines
- Prepare a robust compliance program, AML program, and KYC policies
- Engage with outreach teams within the big 5 Canadian banksÂ
- Sign a formal partnership agreement developed and reviewed by a fintech compliance professional, AML officer, and MLRO
Banks in Canada prefer to partner with MSBs and PSPs that show transparency and are ready to adapt to regulatory changes.
What are the Benefits of a Fintech Partnership With Banks?
A fintech partnership with a Canadian bank can be beneficial because it offers your business proper infrastructure for scaling. You can use your banking partner’s support and name to boost your business reputation.
Collaborating with one of the big 5 Canadian banks assists in improving your fintech services, such as payment processing. Detecting fraudulent and suspicious transactions is also easier with a bank partner’s expertise.
While the bank will gain agility from your fintech solutions, you will benefit from enhanced stability due to the partnership.
FAQs
Who are the Big 5 Canadian Banks?
The big 5 Canadian banks are the largest national banks in the country, including Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CIBC).
How is Fintech Used in Banking?
Fintech solutions can be used by banks to power digital payment systems and fintech apps. Banks can also integrate your automation tools to detect fraudulent transactions and process loans for personalized consumer experiences.
Do Canadian Banks Partner With Fintech Companies?
Yes, Canadian banks, including the big 5 banks, partner with fintech startups and enterprises. Every bank will assess your business for regulatory readiness and AML compliance before considering a partnership.
How Does a Fintech Compliance Professional Help With Partnerships Between Banks and Fintechs?
Fintech compliance professionals at Renno Co. & Fintech help you comply with FINTRAC, Bank of Canada, and PIPEDA regulations. We conduct AML effectiveness reviews to assess weaknesses within your AML program and correct them. The overall result of our intervention is an increased chance of a fintech partnership with banks.
Form A Legally Binding Fintech Partnership With Banks With Renno Co. & Fintech
Successfully building a fintech partnership with banks requires meeting Canadian regulatory standards and the operational expectations of banking partners. Renno Co. & Fintech can assist you in forming such a partnership by developing your compliance program, risk management framework, and KYC policies. Contact us today to learn more about partnering with a bank in Canada.
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