The sales culture of banks can lead to mis-selling of financial products and can lead to employees breaching the rules.
That’s a key finding of a review of Canada’s banking practices undertaken by the Financial Consumer Agency of Canada (FCAC) which says consumers’ interests are not always the priority with banks focused “predominately on selling products and services.”
“Banks are in the business of making money. We know that. 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,” said Lucie Tedesco, Commissioner, Financial Consumer Agency of Canada.
In response, the Canadian Bankers Association says that the banks are client focused; and meet ethical standards and the law when helping customers to meet their financial goals.
“The six largest banks in Canada cooperated fully with FCAC and we are encouraged that the Review found no widespread mis-selling and that banks get this right the vast majority of the time,” said Neil Parmenter, President and CEO, Canadian Bankers Association.
FCAC says that at a result of its review, it will “buttress its supervisory and enforcement teams and implement a modernized supervision approach that will allow it to monitor banks more proactively.”
The agency also intends to provide more information for consumers so they know their rights and the questions they should ask when buying products and services.