Canada's financial consumer watchdog will strengthen its supervisory and enforcement teams, modernize its supervision approach to monitor banks more proactively, and enhance consumer information after reviewing bank sales practices.
The Financial Consumer Agency of Canada found that banks with strong sales cultures can increase risks that customers will be mis-sold products and employees will breach obligations around market conduct, according to a report published by the agency Tuesday after nine months studying the issue.
"Banks are in the business of making money, we know that," FCAC Commissioner Lucie Tedesco said in a Tuesday statement. "But the way they sell financial products and manage employee performance, combined with how they set up their governance frameworks can lead to sales cultures that are not always aligned with consumers' interests."
The Ottawa-based agency decided to scrutinize bank sales practices a year ago following reports by the Canadian Broadcasting Corp. that employees of Toronto-Dominion Bank and other lenders used improper tactics to meet sales goals. The agency aimed to have initial findings made public by the end of 2017, but later opted to issue one report in the first quarter of 2018.
The FCAC said it's investigating alleged breaches of market conduct obligations that may have been identified during its review.
