Flinks: What does $103M get the National Bank?

On the heels of their $11M Series A round investment in July last year, National Bank steps up to acquire a majority stake in fintech startup Flinks.

What does it mean for Canada’s sixth largest lender, National Bank?  The move uncannily mirrors the US investment news that J.P. Morgan was a named investor in Plaid‘s last equity round.

Are we at an Open Banking inflection point? A resounding … maybe.

Flinks is a home-grown aggregation startup. The Plaid of the North. The company acts as a data aggregator connecting the plumbing so that borrowers can provide their financial data to third parties. The company puts the borrower at the center of their business model

Think GDPR: the customer owns their own data and Flinks simply seeks the permission from the consumer to be the custodian of this data by scrapping their account passing on this information to a designate third party.

By definition, Flinks and Plaid are open banking evangelists. They provide the magic spigot to unlock financial data from the Big Five. So it is interesting to have the National Bank (6th-place contender) taking a majority stake. What does this mean when we are just in the afterglow of Ottawa’s Open Banking Report where there was much ado about nothing promising a made-in-Canada one-way data API gateway by 2023 Q-something? This is not a 2-way ecosystem that allows for data to be unfettered as it is in the UK making it one of the fastest fintech growth hubs globally.

Ottawa’s Open Banking initiative promised that in 18 – 24 months we may have what we have now with Flinks and Plaid.

Does National hope to create an open-banking service offering. Is this the legitimacy that third-party data providers need to break down the line between incumbent and fintech-forward banking? Could National be the rogue incumbent offering what Canadian consumers all want: borrow-centric banking services?

Let me know what you think.