Speech at the Canadian Institute’s 31st Flagship Conference on Regulatory Compliance for Financial Institutions by Director of Supervision Jaspal Matharu

November 25, 2025

Toronto, Ontario

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Good afternoon, everyone. 

As we all know, the financial sector is, as ever, moving with unceasing momentum. Technology continues to reshape the landscape, and consumer expectations evolve in parallel. These shifts invite us to reflect on how we approach our work, and how we adapt our methods to serve Canadians.

Recent months have brought renewed attention to the broader economic and geopolitical context in which we operate. The government’s latest budget underscores a clear ambition: to foster greater competition and promote consumer choice through innovation, while maintaining the high standards of consumer protection that Canadians expect. 

These priorities are especially relevant as we navigate a period marked by uncertainty and change, both at home and around the world. 

From our vantage point, the recent federal budget represents a strong reaffirmation of FCAC’s core mandate and its central role of safeguarding Canadians as consumers of financial products and services offered by federally regulated financial institutions. This was clearly echoed in the federal budget’s measures related to fraud, prevention of economic abuse, study of bank fees, and other measures relevant to FCAC. 

In this fast-paced environment, FCAC’s approach is guided by a renewed commitment to proactive and risk-based supervision. We remain focused on understanding where consumer-facing risks may emerge, particularly as institutions introduce new products, services, and distribution models.  We continue to be an advocate for innovation that enables competition and consumer choice. 

Moreover, we understand our role to be clear in this regard; to ensure consumer protection guardrails remain in place so Canadians benefit from choice and fair competition and continue to have trust and confidence in the financial system.

Putting financial consumers first

As we consider the evolving landscape of financial services, it is essential to return to the principle that anchors our work: putting consumers first. This commitment is more than a guiding philosophy—it is the lens through which we shape our strategy, inform our research, and design our supervisory interventions.

It is essential that federally regulated financial institutions invest in highly skilled and dedicated compliance professionals, such as yourselves. Time and again, your work demonstrates a deep understanding of the importance of the value of upholding robust market conduct standards.

Which is to say, putting consumers first is also a good way of doing business and an essential component of sound business practices 

While generally our interactions are positive in nature, at one point or another, each of us has encountered a challenge with a financial product or service, or has helped someone we care about navigate this complex world. These shared experiences remind us that the work we do is not abstract; it is rooted in the everyday realities of the people we serve. 

By remaining attentive to the experiences and needs of Canadians, especially those navigating financial hardship, we are able to identify emerging challenges early in the process, and respond proactively and with agility. Our efforts in financial education and outreach are designed to empower individuals, helping them build resilience and make informed choices in a complex marketplace.

Transparency stands as a cornerstone of FCAC’s approach. Through clear communication of expectations and guidance, we enable regulated entities to understand their obligations and foster a culture of compliance. This clarity not only supports a competitive environment but also serves as a preventative measure—protecting financial consumers by addressing risks before they materialize.

Our focus as a regulator, combined with a steadfast commitment to financial consumers, serves to cultivate a financial ecosystem where all participants share responsibility for raising standards and maintaining trust. With this approach, we work together to ensure that the financial sector remains stable, resilient, and worthy of the confidence Canadians place in it.

Renewing the National Financial Literacy Strategy

Confidence is nurtured not only by strong consumer protections, but also by financial knowledge and capability. That is why, as we consider the priorities that shape our work, I would be remiss if I did not highlight the National Financial Literacy Strategy. This strategy calls on all members of the financial ecosystem to share responsibility for building a more inclusive, accessible, and effective financial system—one that empowers Canadians to make informed financial decisions at every stage of their life.

Recognizing the evolving needs of consumers and the changing landscape of financial services, we are currently reflecting on the renewal of the National Financial Literacy Strategy. This process is grounded in engagement with stakeholders across the financial sector, and I want to thank you for the thoughtful input many of you have provided.

FCAC’s financial literacy work is grounded in research.  We recently released new insights from the Canadian Financial Capability Survey—our national benchmark on how Canadians seek financial advice. 

The findings are telling: while 35% of Canadians sought financial advice in the past year, most turned to free sources, with friends and family leading the way. Banks, investment firms, and professional advisors also play an important role, but younger Canadians are increasingly looking to social media and informal networks. 

These trends remind us why financial literacy matters. Talking about money—openly and without stigma—helps Canadians navigate choices confidently, whether they’re planning for the future or managing challenges today.

Financial Consumer Protection Framework 

Within this evolving and increasingly complex world, I would point to the Financial Consumer Protection Framework as a cornerstone of positive change. Now 3 years into its implementation, the Framework has elevated the market conduct obligations for federally regulated financial institutions, emphasizing a culture where positive consumer outcomes are not just considered, but prioritized.

As many of you may know, to support the implementation of the Framework, FCAC’s supervisory work has undergone significant modernization. Our goal is to be more proactive and data-informed, to ensure our oversight remains effective in a rapidly evolving financial landscape.  

Mandatory reporting has become a foundational element of this approach, with newly introduced requirements such as quarterly complaints reporting and Directors’ reports to FCAC’s Commissioner now providing the Agency with valuable insights into consumer experiences and institutional responses. These data help us to spot trends, identify best practices, and address concerns before they become systemic. They are also a useful way of demonstrating to FCAC the compliance culture and performance of your internal regulatory compliance management programs and systems. 

Another central part of this evolution has been the launch of our compliance examinations program. FCAC’s compliance examinations provide the Agency with a deeper understanding of institutional practices and adherence to market conduct obligations. 

For those unfamiliar with the process, an FCAC compliance examination typically involves a comprehensive review of how an institution manages specific market conduct obligations. We assess the entire framework, including systems, controls, and sample interactions, to verify compliance. 

Upon completion, observations are shared with the institution. Where deficiencies are identified and depending on the nature of findings, the institution may be required to submit an action plan or enter into a compliance agreement to implement corrective measures. In more serious cases, enforcement action may follow. This proactive approach strengthens compliance and reduces reliance on self-reporting, which ultimately safeguards consumers and reinforces trust in the financial system. 

Thematic reviews, which we implemented a couple of years ago, also remain a key element of our modernized supervisory program. Two recent reviews of small and medium-sized banks—one on complaint handling and the other on electronic alerts or “e-alerts”—have provided important perspectives on industry practices and consumer outcomes. 

For instance, in our complaint-handling review, we found that some banks did not treat all expressions of dissatisfaction as formal complaints and, in certain cases, failed to resolve complaints within the prescribed 56-day period. Similarly, our review of e-alerts revealed that not all consumers were fully benefitting from these protections due to delays, incomplete information, or missing contact details. 

These findings were shared through published reports so that all regulated entities—not just those examined—can assess their own programs and strengthen them accordingly. Our ongoing thematic review on appropriate product sales continues this work, examining how institutions align products with consumer needs and expectations.

Enhanced risk-informed approach 

As part of FCAC’s commitment to modernizing supervision, we are introducing a new internal Market Conduct Risk Assessment Model. This model marks a significant shift towards a more data-driven, proactive, tailored, and entity-specific approach to oversight.  We know that a one-size-fits-all approach to supervision is not an effective use of our or your time.

Please allow me to contextualize how FCAC strives to enhance its data-driven, outcome-based Supervisory program. The risk model incorporates several key dimensions, to provide a comprehensive assessment of market conduct risk. One important aspect is entity size, which evaluates the scale and complexity of each regulated entity. By considering factors such as market share and operational scope, the model ensures that risk assessments are tailored to the realities of both large and small entities. 

Another critical dimension is compliance behaviour. Here, the model analyzes historical adherence to regulatory requirements, drawing on a range of data sources including quarterly complaints records, reportable compliance issues, compliance examination results, and other supervisory engagement outcomes. This approach allows us to identify patterns, monitor ongoing compliance, and respond proactively to emerging risks.

For the next phase in the further maturing of this model, we plan to examine sales, marketing, and compensation practices, recognizing that incentive structures and promotional strategies can influence compliance risk. By assessing these elements, we gain insight into how business practices may impact consumer outcomes and overall market conduct integrity. 

Finally, the risk model incorporates other intelligence, drawing on additional data sources such as insights from other regulators and even social media. This enables us to capture emerging or external risk signals including consumer sentiment, ensuring that our assessments and efficient use of compliance-assessment resources remain current and responsive to the broader risk environment.

For FCAC, the risk model and enhanced Supervisory Framework enable more precise and timely interventions, strengthen consumer protection, and improve regulatory efficiency. Supervisory actions will be better targeted and risk-informed, with earlier and more meaningful engagement with industry. And arguably the most important benefit is that FCAC can have meaningful discussions with financial institutions about entity-specific risks.

This means greater transparency in how FCAC assesses risk and determines supervisory actions. These improvements encourage institutions to maintain robust compliance programs, address vulnerabilities proactively, and continuously improve their practices.  Again, I would like to underscore that our Senior Supervisors are committed to sharing insights into key risk factors and expectations, to help entities align with best practices.

To summarize, effective supervision is like tending a garden: regular care, attention, and timely intervention help the Financial Consumer Protection Framework to flourish, and weed out risks before they can lead to consumer harm. 

Furthermore, the relationship between federally regulated financial institutions (FRFIs) and FCAC’s Supervision and Enforcement team is critical to the effectiveness of consumer protection in Canada. Open lines of communication, transparency, and responsiveness form the foundation of our approach, enabling both parties to engage early to address emerging risks before they escalate. 

FRFIs that actively invest in this relationship benefit from greater confidence that they are staying ahead of regulatory issues and can demonstrate their commitment to resolving consumer protection concerns in a timely and proactive manner.  

This ongoing dialogue helps ensure that institutions are not only compliant but are also equipped to respond swiftly to shifting market dynamics and evolving regulatory expectations. By fostering a culture of transparency and early engagement, FRFIs reinforce trust with both regulators and consumers, underscoring their dedication to fair outcomes and a strong compliance culture.

Ultimately, pairing this relationship with the risk model will represent a key enhancement to our supervisory approach. It supports a level playing field, ensures proper guardrails are in place, and helps maintain a financial ecosystem where innovation and competition can thrive responsibly, with consumer protection consistently at the forefront. 

Supervisory focus and expectations

As we look ahead, I’d like to share some reflections on the areas where our supervisory lens has been most focused in recent months. These are themes that have surfaced not only through our own assessments, but also through the many conversations we’ve had with you and your colleagues across the sector. 

The sector’s embrace of innovation—whether through new technologies or novel distribution models—has brought with it a host of opportunities, but also new questions about how responsibilities are allocated when a FRFI’s products or services are offered through trusted partners or intermediaries. Our supervisory approach to these increasingly popular arrangements is guided by a commitment to supporting responsible innovation. 

Our expectation is that institutions will take care to ensure clarity and consistency in these relationships. Consumers should be able to easily distinguish between products and services sold, or whose sale is furthered, by the institution itself and  those provided by a third party. This means that disclosures should be prominent and unambiguous, and that branding should not create confusion about who is responsible for the product.  

When these distinctions are maintained, consumers are better positioned to understand not only the nature of the product or service they hold, but also the avenues available to them should they wish to raise a concern. In practice, the regulatory framework governing a product—whether that framework is federal or provincial—can shape the protections and complaint processes that are accessible to the consumer. 

Where clarity is lacking, there is a risk that individuals may not fully understand the consumer protection rights and remedies available to them.  For institutions, careful attention to these details is not simply a matter of compliance, but a reflection of a broader commitment to fairness, to responsible conduct, to transparency, and to building consumer confidence. 

Complaint handling, in this context, becomes more than a procedural requirement; it is a measure of how well institutions support their customers in navigating issues and concerns.  

The way concerns are addressed speaks volumes about an institution’s commitment to fairness and transparency. We have observed a range of practices across the sector, and it is clear that a timely final substantive written response to consumer complaints— a response that truly reflects the institution’s best efforts and best and final offer—can make a meaningful difference for consumers. Ensuring that individuals understand their right to escalate a complaint, and that the path to resolution is clear, are hallmarks of a system that puts consumers first. 

As most in this room are aware, FCAC’s Commissioner has placed greater emphasis on ensuring that consumer voices are heard through the proper channels, so they can receive the best possible outcome for their situation. With clear roles and responsibilities, we help ensure that consumers have straightforward, reliable access to the proper channels for resolution. 

We recently reinforced our expectations for clarity in our industry communications, emphasizing that financial institutions and the external complaints body, the Ombudsman for Banking Services and Investments (OBSI), are the appropriate avenues for handling complaints for banks and federal credit unions, for example, while FCAC serves as a much-needed resource to help educate, guide and support consumers through the complaints process. 

Ultimately, proper resolutions hinge on institutions responding swiftly and thoughtfully when things go wrong or when consumers are dissatisfied. The trust that consumers place in their financial institutions is built not only on compliance, but on a willingness to make things right. In this regard, FCAC has communicated its expectation that federally regulated entities take active steps to remediate consumers who have experienced financial harm following a breach of a market conduct obligation. 

This means assessing the extent of the impact and ensuring that affected consumers are made whole, with remediation that also reflects any associated charges or penalties, and interest as appropriate. Through our supervision of regulated entities, well over $38 million was reimbursed to more than 745,000 consumer and business accounts during fiscal year 2024–2025. Institutions that approach remediation with diligence and transparency reinforce confidence in the sector and demonstrate a commitment to fair outcomes and putting their consumers first.   

Of course, the most effective way to address financial harm is to prevent it from occurring in the first place. This is where the appropriateness of products and services comes to the fore, as well as the importance of implementing measures and technology solutions to prevent harm from occurring. As the needs and circumstances of consumers continue to evolve, institutions that invest in robust policies, attentive oversight, and thoughtful sales practices are well positioned to anticipate and mitigate potential sources of dissatisfaction. 

When incentive structures for bank employees are aligned with sound outcomes for consumers and product governance is rigorous, the risk of inappropriate offerings is diminished. In this way, a culture of care and discernment not only reduces the likelihood of complaints and the need for remediation, but also strengthens the foundation of trust upon which the relationship between consumers and their financial institutions is built. 

To achieve these objectives, we will continue to work closely with industry, developing guidance and supervisory engagements to support institutions in their efforts to meet federal market conduct obligations. In addition, we plan to increase the number and frequency of compliance examinations as part of our broader supervisory program. These proactive measures are intended to ensure that the right guardrails are in place—guardrails that ensure consumers are protected while also enabling industry to bring to the marketplace new and innovative products and services that meet consumers’ evolving needs.

Conclusion 

As we look to the future, our collective efforts will continue to contribute to a financial sector that is resilient, responsive, and worthy of the trust Canadians place in it. Our focus on putting consumers first will remain steadfast and, indeed, was echoed in federal budget measures to address fraud, economic abuse, bank fees, and more. 

The financial landscape will no doubt present new challenges and opportunities, but by remaining attentive to consumer needs, upholding high standards of conduct, and fostering open and transparent dialogue, we can ensure that progress benefits everyone.  

In closing, and on behalf of FCAC, I would like to express our appreciation for your commitment to the business of consumer protection.