I would like to thank the Committee for inviting the Canadian Bankers Association to discuss
consumer protection in banking. My name is Darren Hannah. I am the Vice-President of Finance,
Risk, and Prudential Policy, and joining me is my colleague, Sandy Stephens, Assistant General
The Canadian Bankers Association represents 63 domestic banks, foreign bank subsidiaries, and
foreign bank branches operating in Canada. Banks help families buy a home and save for
retirement, help small businesses grow and thrive, and help drive the economy. Banks provide over
half of all business lending in Canada. Canada’s banks are prudent lenders and continually work to
make credit available to credit-worthy Canadians and businesses in Canada.
Banks are customer focused
Banks are in the customer service business, with a history of building longstanding relationships with their clients. A key part of developing that relationship is providing advice about products and services to help customers realize their financial goals, and respecting customers’ rights to freely choose their financial products and services. And, with more than 40 banks offering financial products and services – in addition to hundreds of credit unions and caisses populaires – customers know that they are in the driver’s seat when it comes to choice.
With this in mind, bank employees receive training and information on principles for putting the
client first. Banks work hard to provide the services and products that are right for their customers
and this means they have to keep their clients’ needs and interests in mind, providing the
information they need to make informed decisions when choosing financial products and services.
Banks take compliance seriously
Banks have a strong track record of following both the letter and the spirit of the law in dealing with
customers. Banks devote considerable time, effort, and resources to ensuring strong compliance.
They take extensive steps to make sure that customers subscribe to the products and services they
want and which they have consented to receive.
Banks have clear guidelines, policies, and procedures in place to ensure products are described
accurately and completely to their clients.
Banks also have established Codes of Conduct that articulate employee behaviour including
expectations related to integrity and sales practices. All employees are required to attest to
compliance with the Code of Conduct on an annual basis. Should an employee not adhere to the
bank’s Code of Conduct, banks take corrective action to address employee behaviour.
Client-centred employee performance and incentives
Bank performance management systems and incentives are designed to reinforce appropriate
practices, conduct, and culture that promote a client-centric, advice-driven approach. Performance
management systems include several layers of controls, governance, and oversight to ensure
appropriate conduct, and to detect and address potential incidents of inappropriate behaviour.
A key factor in the goal setting process for employees is that sales objectives are designed to align
with creating value for customers, and that objectives are reasonably obtainable and aligned across
products and channels.
Canadians are well-served by their banks
Customers are well-served by their banksAs I have already mentioned, banks work hard to meet
the needs of their customers and banks are competing with each other to attract and retain
customers. Canadians appreciate the reliability, trustworthiness and stability of Canada’s banks. No
less important is the value that customers feel they get from their bank. Banks have worked hard to
make banking more convenient – extending branch hours, introducing mobile banking and
payments, and enhancing online banking – enabling banking literally around the clock and around
the world. Canadians have noticed and value these improvements.
A key part of customer satisfaction is how banks respond to complaints. Should a bank customer
have a complaint, banks have a very robust and thorough internal complaint process. In fact, very
few complaints are not resolved within the bank. In those cases, complaints are reviewed by an
independent Ombudsman and in 2016 only 515 complaints were reviewed by the external
complaints bodies. With more than nine billion customer transactions flowing through banks each
year from millions of bank customers, the small number of complaints demonstrates a positive
customer experience across all banks.
FCAC / OSFI
Finally, I want to comment briefly on the banks’ relationship with our regulators. We work closely
with FCAC and OSFI on consumer and prudential matters respectively. Canada’s streamlined and
effective financial regulatory system has become a model for the world, providing a strong federal
consumer and prudential regulatory regime in which banks operate.
Specifically on consumer regulations, banks cooperate with the FCAC to ensure compliance with
those regulations including express consent and disclosure. As you have heard, the FCAC
regularly conducts reviews of the banks’ business practices, and banks cooperate with them on
Thank you again for the opportunity to present our views and I look forward to your questions.