Remarks by Lucie Tedesco, Commissioner of the Financial Consumer Agency of Canada, at the Annual Industry Session 2017 

February 6, 2017
Toronto, Ontario
Industry Session 2017

Check against delivery.

I am very happy to be here and honoured to have the opportunity to share with you some of the things that have been on my radar screen as of late. 

So, thank you for being here and making this event a priority. 

With so many industry compliance experts in one place—I understand we have over 140 individuals from more than 70 institutions and a great cross-section of the industry—today’s session will really give us a unique opportunity to share perspectives on challenges that are, quite frankly, common to all of us.

But first, I would like to say a few words about compliance and the individuals who are tasked with ensuring that their organizations do not cross the lines drawn by legislators, regulators and their board of directors.   

There is no question that compliance has significantly evolved since I started practising law, circa the stone ages. 

In my day, legal departments were the ones entrusted with the responsibility of ensuring organizational compliance. 

Today, most organizations have separate legal and compliance functions, recognizing the distinctive but complementary role each plays—with legal being responsible for defending an organization’s position under the law, and compliance being responsible for ensuring the organization meets its regulatory requirements.

To quote a recent report from Ernst and Young:

“Compliance teams now play an increasing role in facilitating organizational success.”

That makes sense when you think that an organization’s success largely depends on its public image. 

And compliance, in my view, is instrumental in helping uphold a positive image and building consumer trust.  A compliant organization, in a consumer’s mind, is a trustworthy organization. 

The report goes on to say, and I am paraphrasing, that the days of defensive activity being sufficient are long gone. 

Compliance teams are now expected by their boards, their senior management teams and the regulators, to look ahead, anticipate risks and support operating businesses to help them perform better. 

When I meet with your CEOs and Boards of Directors– usually annually—I typically review with them the institution’s compliance record, consumer complaints, the relationship between the institution and the FCAC, FCAC’s near-term priorities and finally I convey my long list of expectations going forward. 

And, chief among those expectations are:

1. Instilling a corporate culture of compliance and customer centricity
2. Continuing to invest in compliance expertise and resources; and  
3. Ensuring compliance is as part of product oversight and governance processes    

I am confident that by meeting those expectations, institutions will secure the best possible outcomes for consumers. 

Because well-informed, well-protected consumers make loyal consumers.   

Consumers can be confident that, in Canada, their interests are safeguarded by the laws, regulations and frameworks in place to protect them.

I call tell you, as Chair of the International Financial Consumer Protection Organization (Finconet for short) that the Canadian financial consumer protection regime serves as a model for others around the world. 

This did not happen by accident.  It happened in large part as a result of work we have done together.

But now those protections risk being challenged by innovation.

Fintech is introducing new models, services and players to the marketplace. The conveniences it offers to customers and the opportunities it presents for businesses are undeniable.

At the same time, new questions arise about regulation and consumer protection.

We are working on those issues, preparing for the future and positioning ourselves to succeed in the face of this rapid innovation.

We are adopting a more proactive, risk-based approach to supervision.  We are conducting industry reviews.  We are strengthening and adapting our investigation skills. 

And we are increasing engagement with our regulated institutions at the working, executive and board levels—because we are confident that in doing so, we will be more robust, proactive, transparent and predictable.

So in wrapping-up, I would like to leave you with some asks. 

My first ask is:

Be present:  Embed yourselves in the lines of business, so that you can address issues with new products and services before those products and services are introduced to the market.  Fixing issues after the fact is no longer enough and increases your institution’s exposure to violations.

Be proactive:  Test the policies and procedures you have in place to comply with the consumer provisions.  Don’t wait for us to do it. Anticipate issues and prevent them from impacting consumers. 

With the new supervision framework, we will be relying on you to proactively advise us of any changes or issues that may threaten your customers’ well-being.   

Be transparent:  Communicate with FCAC early, and often. Keep us in the loop.  If you are involved with the business lines, then you’re able to flag issues and resolve them. 

And, if you can’t solve them, involve us from the outset.  I guarantee you we will do everything we can to work through the issues with you.   Let’s work on the basis of no surprises.

I have to say the thing that disappoints me the most is hearing about a compliance issue or business developments in the news. 

My last ask is:

Act swiftly:  Act swiftly when compliance breaches are identified.  Look, we are all committed to ensuring compliance with the legislative framework.  And I understand that some things might get in the way of resolving certain issues. 

Technology is a good example.  But I am here to tell you that your responsiveness and your approach to resolving issues are critical to protecting consumers.   Breaches of legislative and regulatory requirement must be addressed rapidly and effectively.

In closing, I would like to thank you for what you do for your organizations because that work, ultimately, benefits your customers and our financial consumers.

I often hear members of our compliance team say how much they value the solid working relationships they have with you. I know how much they appreciate your cooperation and collaboration. 

I can assure you that this is not something that they take for granted. 

I can also assure you that they derive much more satisfaction troubleshooting with you on issues, than resorting to ticking boxes on a compliance checklist.

With that, I thank you for listening and hope that you find today’s session meaningful and of value.  

Thank you.