Canada’s real-time payments modernisation: A turning point for financial institutions

GlobalData

Mon, Jun 2, 2025, 4:56 AM 5 min read

Canada’s payments ecosystem is at a pivotal stage of transformation. The journey toward simplification and modernisation is accelerating, with efforts such as the introduction of Real-Time Rail (RTR) and increased regulatory oversight reshaping the landscape. This impending change will greatly impact the nation’s financial services industry, which is anchored by five dominant banks that control over 90% of the country’s total banking assets and financial services market share.

Despite their historical strength and resilience – particularly during periods of global financial stress – Canadian banks now face major technical challenges. Legacy infrastructure and fragmented data environments are increasingly at odds with the growing demand for faster, more transparent, and more secure payment experiences. At the same time, traditional financial institutions must navigate these pressures while contending with broader economic headwinds.

Now, under new mandates such as the Retail Payment Activities Act (RPAA), the Bank of Canada has begun registering payment service providers (PSPs), a shift that brings these players under formal oversight for the first time, enabling them to build trust, scale with more confidence and gain direct access to core payment systems. This levelling of the regulatory playing field is expected to increase market participation and foster healthy competition alongside traditional banks.

As the high-value and real-time payment rails continue to evolve under regulatory oversight, institutions are under pressure to modernise both operationally and technologically. They’re actively exploring new infrastructure, data capabilities and monitoring tools to support this shift. This is a crucial moment for Canadian banks to strengthen their operational readiness, not just to meet evolving expectations but to lead in a real-time economy. The momentum is here, both in regulation and innovation. Now, it’s about execution.

As Canada moves toward a real-time financial ecosystem, resilience has become a strategic priority — not just a compliance checkbox. Institutions today must approach resilience as a multi-layered strategy across business, operational and technical domains. These layers are interconnected: technology provides the foundation, operations drive execution and business resilience is the ultimate goal.

At the top of the stack, business resilience is about safeguarding critical services and customer commitments, particularly during times of stress. According to the Bank of Canada’s Operational Resilience and Operational Risk Management Guideline, Canadian institutions are now expected to identify their most essential business functions, define impact tolerances and establish plans to maintain service delivery. Payments Canada has reinforced this focus through high-availability investments, such as the launch of a secondary data centre for Lynx, the country’s high-value payment system.