“A leader and innovator in financial consumer protection”: the Financial Consumer Agency of Canada’s 2020-21 Business Plan

The Financial Consumer Agency of Canada (FCAC or the Agency) has released its 2020-21 Business Plan (the Plan). The Plan provides a better understanding of the FCAC’s priorities, planned initiatives and upcoming activities, which can help regulated entities better prepare for potential impacts on entities’ operations.

What you need to know

• Released April 30, the Plan introduces the FCAC’s new vision of being a “leader and innovator in financial consumer protection”, and a new mission: “to protect consumers of financial products and services, to supervise regulated entities and to educate Canadians and strengthen their financial literacy”.
• The FCAC’s 2020-21 activities are organized according to four priorities:
  1. Enhancing the FCAC’s regulatory effectiveness;
  2. Ensuring the FCAC is an insightful and effective authority in financial education;
  3. Investing in the future; and
  4. Capitalizing on the diversity of the FCAC’s talent.
• The new Commissioner’s first business plan is ambitious, designed to build a modern, more technology-savvy organization focused on leveraging available data to more efficiently and effectively tackle future challenges.

Overview of the plan

Organized around the above-mentioned four priorities, the Plan includes 13 strategic objectives which are to be achieved through the delivery of 37 different initiatives. The complete Plan can be viewed here, but key elements are as follows; highlighted in bold are those activities that could more directly and immediately affect regulated entities:

Supervision and enforcement responsibilities:

1. Continuing with the implementation of the new Financial Consumer Protection Framework (FCPF) achieved through ongoing consultation with the banks to develop the necessary guidance as well as update the necessary FCAC policies and procedures.
2. Continuing with the implementation of the FCAC’s supervision framework introduced in 2018; key initiatives for the coming year include:
   1. Developing a comprehensive case management system centralizing FCAC data across business lines and implementing a business intelligence strategy to support decision making, information-sharing and research.
   2. Conducting and completing market conduct profiles of select financial institutions to generate data and analyze present and inherent risks present in business activities.
3. Conducting an industry review of select small- and medium-sized banks with a focus on their sales practices and complaint-handling procedures. The results of this review would be published in the next fiscal year (2021–22).
4. Developing and implementing a data intake and prioritization strategy to enhance the Agency’s enforcement work.
5. Creating a secretariat in the Commissioner’s office to ensure a transparent and responsive adjudication process which will include the development of policies and procedures reflecting the Commissioner’s new powers under the FCPF.

Financial literacy responsibilities:

1. Renewing Canada’s financial literacy strategy by conducting research and stakeholder consultation to identify priority areas and target groups.
2. Assessing existing educational resources to identify gaps and inform future resource development.
3. Measuring the impact of FCAC’s online content, tools and programs and working with stakeholders to develop a plan to extend the reach of such resources.

Modernizing the Agency’s operations:

Notwithstanding the fact that the FCAC will be extremely busy in 2020-21 with the upcoming FCPF, with the continued implementation of its new supervision framework and with the development of a renewed financial literacy strategy, the FCAC has a very ambitious agenda to modernize its operations. With 21 of the 37 activities planned for 2020-21, it intends to “build its expertise, optimize its programs and modernize its practices” and to “capitalize on the diversity of FCAC’s talent”. Key activities to achieve these objectives include:

1. Building expertise and capacity to respond to and anticipate new developments and emerging trends, including research on consumer-directed banking, the creation of an oversight framework for payment services operators and the protection of consumer data.
2. Establishing a comprehensive and integrated approach to the FCAC’s research and policy function by developing a strategic roadmap to modernize these functions and by establishing a process to identify, prioritize and monitor emerging trends, risks and issues relevant to financial consumers.
3. Establishing an Agency-wide approach to communication, outreach and engagement which includes developing a three-year public affairs strategy, developing a crisis communication plan and conducting a review of the FCAC web pages.
4. Building the FCAC’s foundation through activities such as introducing a new organizational structure, leveraging digital technologies to encourage employee collaboration and mobility, implementing a data and analytics strategy regarding data sharing, and developing an evaluation plan to systematically assess the Agency’s programs, initiatives and policy work and updating the Agency’s intranet.
   
   Of interest to regulated entities is the FCAC’s plan to review how the Agency apportions its operating budget among regulated entities.
5. Undertaking other activities focused on attracting, developing and retaining an engaged workforce.

Other interesting details from the Plan:

It is expected that FCAC staffing for 2020-21 should reach 205 full-time equivalents, up from 145 in 2019-20 (almost double what is was in 2017-18 at 105).

The FCAC is planning on experimenting this year with a tax refund saving pilot which aims to help individuals direct their tax refunds immediately into savings.