Fintechs Canada responds to the government’s proposals to strengthen Canada’s financial sector

Fintechs Canada responded to the government’s proposals to strengthen Canada’s financial sector. The proposals outline initiatives under five key themes, including supporting a competitive market structure, enhancing consumer protections, modernizing the financial sector framework, adapting to geopolitical risks, and upholding world-class regulation. 

In their response, Fintechs Canada focuses on addressing questions related to supporting a competitive market and enhancing consumer protection, specifically as it relates to fraud. 

Supporting competition and innovation

To build a more dynamic and competitive financial ecosystem, Fintechs Canada recommend that the government prioritize the following:

1. Establishing explicit competition mandates for financial sector regulators. 
2. Expanding access to and promoting fair pricing of critical payments infrastructures, such as the RTR.
3. Modernizing Canada’s approach to granting bank licenses to make it easier for non-traditional financial institutions to enter the market. 
4. Giving Canadians the right to control their financial data by Implementing Canada’s consumer-driven banking framework.
5. Continuing the government’s digitalization of money review. 

Enhancing Consumer Protection Against Fraud 

With the increasing shift toward digital payments and the growing sophistication of cybercrime techniques, Fintechs Canada highlights significant concerns regarding payment fraud. “Global losses due to payment fraud are projected to continue rising, reaching $40.62 billion by 2027—an estimated 25 percent increase from 2020,” states the submission. To address these issues, Fintechs Canada recommends the following measures:

1. A general obligation for banks to fully reimburse their account holders in the event of any unauthorized movement of money.
2. A general obligation for banks to have policies and procedures in place to detect and prevent payments fraud.
3. An obligation for all federally regulated banks to collect and report anonymized and aggregated data related to fraud.

To view Fintech Canada’s submission, click here.