A conversation with Jaspal Matharu, Director of Supervision
“Putting consumers first is the lens through which we shape our strategy, inform our research, and design our supervisory interventions.”
The financial sector is going through a period of significant technology-driven innovation. How is FCAC protecting financial consumers during all this change?
FCAC’s core mandate and central role is to safeguard Canadians as consumers of the financial products and services offered by federally regulated financial entities. The financial sector has embraced technological innovation, and that is reshaping the financial landscape with new products and services—and consumers’ expectations are evolving in parallel. Putting consumers first is the principle that anchors our work. That’s more than a guiding philosophy: it’s the lens through which we shape our strategy, inform our research, and design our supervisory interventions. We believe that consumers should benefit from competitive choice and innovation, backed by strong protections when dealing with federally regulated financial entities.
How does the supervision team you lead contribute to protecting financial consumers?
We supervise over 300 federally regulated financial entities, including banks, insurance companies, and trust and loan companies. That means we oversee their compliance with the laws, the codes of conduct, and the public commitments that are in place to protect financial consumers. One cornerstone I would point to is the Financial Consumer Protection Framework, which introduced over 60 new and enhanced consumer-protection measures into the Bank Act in 2022. Simply put, our risk-based oversight of these market conduct obligations promotes trust and helps keep our financial system safe for Canadians.
The latest federal budget makes it clear the government wants more competition and innovation. How does FCAC balance supervision and regulation with the need for innovation in the financial sector?
At FCAC, we advocate for innovation that enables both competition and consumer choice. The recent shifts in the financial landscape have invited us to reflect on how we approach our work and adapt our methods to serve Canadians even better. For example, we are taking a more proactive, risk-based approach to supervision. While financial services providers introduce new offerings and distribution models into the marketplace, we are leveraging data to identify where consumer-facing risks may emerge. By clearly communicating our expectations and guidance, and by keeping open, transparent lines of communication with financial entities, we help them understand their obligations, so that they can respond quickly to market and regulatory changes and address emerging risks early. This approach supports responsible financial innovation as well as competition, while also ensuring that consumer protection is consistently at the forefront. Putting consumers first is not just FCAC's mandate; it's a good way of doing business.
What are some examples of supervision activities that reflect this modernized approach?
One good example is our use of mandatory reporting, which gives us timely data on issues like complaints and compliance concerns. We take insights from that data and pair them with targeted compliance assessments like Thematic Reviews and Compliance Examinations, to see how financial entities are meeting their consumer protection obligations in practice. If we see gaps, we share our findings, require corrective action, and take enforcement actions if needed. Beyond that, we’ve also recently introduced an internal Market Conduct Risk Assessment Model, which pulls in additional data that allows us to better tailor our oversight to institutions that pose varying degrees of risk, and lets us identify emerging risks and patterns early. As a result, we can act before issues escalate.
Supervising financial institutions is complex work. If a financial consumer asked you to give them a concrete example of how your work positively impacts their finances, what would you tell them?
Let me start out by sharing a personal anecdote: I recently accompanied my 2 daughters to open student chequing accounts. These were basic accounts, but my daughters really appreciated the bank employee’s attention and detailed explanations about the products they were receiving. This is a basic example of disclosure, which is a foundation of financial consumer protection. It may seem simplistic, but it’s an important concept, because for consumers to make informed financial decisions, the information they receive needs to be clear and accurate. That’s logical but it’s also a regulatory requirement, and it’s part of what we supervise at FCAC. While disclosure helps consumers make informed decisions, in a marketplace with a large variety of product options, other protections also help improve consumer outcomes. The obligation for financial entities to sell products and services that are appropriate for consumers’ needs and circumstances helps prevent harm. Part of that obligation is for entities to build incentive structures for their employees that are aligned with sound outcomes for consumers. When they manage this well, the risk of inappropriate offerings is diminished.
What happens when your team discovers that a financial institution is not complying with consumer protection measures?
While the onus is on federally regulated financial entities to meet their obligations, breaches do happen. If ever a financial institution does not comply with its consumer protection obligations, FCAC takes supervisory and enforcement actions to bring the financial institution back into compliance and to make consumers whole. Federally regulated entities are expected to take active steps to remediate consumers who have experienced financial harm as a result of a breach of consumer protection measures. We would assess the extent of the impact, and we expect that affected consumers receive remediation that reflects any associated charges or penalties, and interest as appropriate. To give you some concrete numbers: through our supervision of regulated entities, more than $130 million has been reimbursed to consumer and business accounts since 2024. But as I have already explained, we have many preventive measures and technology solutions in place with the aim of intervening before we get to that point. The goal is to prevent financial harm from occurring in the first place.
Many FCAC Newsletter subscribers work in the financial sector. Do you have any last thoughts to share on what financial entities can expect from FCAC’s Supervision team in the year ahead?
First and foremost, consistent with our compliance promotion mandate, we want to support financial entities by providing clarity around expectations. In the coming year, we will continue to work closely with them, developing guidance and supervisory engagements that support their efforts to meet federal market conduct obligations. Appropriate products and services will continue to be a priority for FCAC as consumers’ needs evolve and the financial industry introduces new and innovative products and services to meet those needs. We also plan to increase the number and frequency of compliance examinations as part of our broader supervisory program. These proactive measures are intended to put the right guardrails in place—guardrails that help protect consumers and that also enable the financial industry to bring new and innovative products and services to the marketplace to meet consumers’ evolving needs.
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