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 Counsel.

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.


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 these reviews.

Thank you again for the opportunity to present our views and I look forward to your questions.

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