Financial Institutions Survey (FIS) 2023-24
Final report

POR 038-23
Contract # 59017-23-0006
Contract Date: 2023-09-06
Contract Value: $44,990.95 (including HST)

Prepared for the Office of the Superintendent of Financial Institutions information@osfi-bsif.gc.ca.

March 21, 2024

Prepared by:

The Strategic Counsel
1 St. Clair Ave. W., Suite 1200
Toronto, Ontario M4V 1K6
Tel: (416) 975-4465 Fax: (416) 975-1883
Email: info@thestrategiccounsel.com
www.thestrategiccounsel.com

Ce rapport est aussi disponible en français.

Final report

Prepared for: the Office of the Superintendent of Financial Institutions

Supplier Name: The Strategic Counsel

March 2024

This public opinion research report presents the results of an online survey conducted by The Strategic Counsel on behalf of the Office of the Superintendent of Financial Institutions. The research study was conducted with 99 CEOs of federally regulated insurance companies and financial institutions between January 10th and 31st, 2024.

Cette publication est aussi disponible en français sous le titre: Sondage de 2023‑2024 auprès des institutions financières (SIF).

This publication may be reproduced for non-commercial purposes only. Prior written permission must be obtained from the Office of the Superintendent of Financial Institutions (OSFI). For more information on this report, please contact OSFI at information@osfi-bsif.gc.ca.

Catalogue Number: IN4-30/2024E-PDF

International Standard Book Number (ISBN): 978-0-660-71066-2

Related Publication (Registration Number: POR 038-23)

Catalogue Number: IN4-30/2024F-PDF

International Standard Book Number (ISBN): 978-0-660-71067-9

© His Majesty the King in Right of Canada, as represented by the Minister of Finance, 2024.

Table of contents

1. Executive summary
   1. Background and objectives
   2. Methodology
   3. Key findings
2. Background
   1. Background to the study
   2. Research objectives
3. Methodology
   1. Sample design
   2. Fieldwork and response rates
   3. Pretesting
   4. Notes to reader
4. Detailed findings from the survey
   1. Overall impressions
      1. Satisfaction with OSFI as a regulator
      2. Future risk areas
   2. Guidance
      1. Ratings of OSFI regarding guidance
      2. Effectiveness of OSFI regarding guidance
   3. Approvals
      1. Satisfaction with OSFI’s approvals process
      2. Understanding of OSFI’s decision-making
   4. Supervision
      1. Ratings of OSFI’s supervision
      2. Effectiveness of OSFI’s supervision
   5. Communication with OSFI
   6. Final comments
5. Appendix
   1. Response rate
   2. E-mail communications
      1. Invitation letter from the superintendent
      2. Survey invitation from the Strategic Counsel
      3. Survey reminders
      4. Thank-you note
   3. Questionnaires
      1. English questionnaire
      2. French questionnaire
   4. Tabulated data

I. Executive summary

The Strategic Counsel (TSC) is pleased to submit this report to the Office of the Superintendent of Financial Institutions (OSFI) detailing the findings from the 2023-24 Financial Institutions Survey (FIS).

A. Background and objectives

OSFI is the primary regulator and supervisor of federally regulated financial institutions and federally administered pension plans in Canada. To assist OSFI in assessing how well it is achieving its mandate, since 2008 OSFI has been undertaking a high-level, biennial survey targeted at CEOs in all federally regulated financial institutions, including banks and other deposit-taking institutions (DTIs), as well as life and property and casualty insurance companies. The survey provides OSFI with an assessment of its performance and insights into the key drivers of satisfaction.

The results of the survey provide valuable guidance to OSFI on its overall performance and in specific areas of its mandate, identifying areas of strength for OSFI – where it’s viewed as performing well – as well as opportunities for improvements with respect to recommendations, activities, communications and processes.

B. Methodology

The survey, which was conducted in both official languages, was made available to all eligible respondents through a link embedded in a bilingual e-mail invitation which was sent by TSC. The list of CEO-level contacts for 236 federally regulated financial institutions was provided by OSFI.

A total of 99 completed surveys (n=60 insurance companies; n=39 DTIs) were received during the period in which the survey was in field, from January 10th to 31st, 2024, representing an overall response rate of 42%. Since the entire population or universe of the target audience was invited to participate in this survey, no margin of sampling error has been estimated or reported.

C. Key findings

Following an increase in satisfaction in the previous wave (2021), overall satisfaction with OSFI has dropped back to levels previously seen in 2018.

• Overall, satisfaction levels remain positive with over eight-in-ten (85%) who provide a rating of ‘very satisfied’ (43%) or ‘somewhat satisfied’ (42%).
• Satisfaction levels among DTIs and insurance companies do not vary significantly although, a much larger proportion of DTIs offer a rating of ‘very satisfied’ when compared to insurance companies.
• Cyber risk and IT security continue to be a top priority for DTIs. Insurance companies are equally likely to cite this issue as well as environmental risks/natural disasters as risk areas they feel should be a priority for OSFI in the next few years. Interestingly, mentions of regulatory burden and the regulatory environment by insurance companies increased significantly this wave.

As was the case in 2018 and 2021, results pertaining to OSFI’s guidance continue to be mixed. The trend lines show that some measures have improved or remained stable, while others have declined.

• OSFI’s rating on responding in a timely manner to market developments and industry suggestions that guidance needs updating has improved slightly since the previous wave with seven-in-ten (71%) who now say OSFI is ‘very good’ or ‘good,’ a level similar to that seen in 2018.
• While OSFI is viewed as effective in providing a clear indication of its expectations, ratings have dropped significantly and are much lower for:
• Developing guidance that strikes an appropriate balance between prudential considerations and the need for institutions to compete (declined 19 points from 2021);
• Consulting with the financial services industry when developing guidance (declined 17 points from 2021); and
• The extent to which it considers the nature, size and complexity of financial institutions (declined 15 points from 2018).
• Additionally, ratings of OSFI on communicating its response to industry feedback during consultations has dropped off since the previous wave in 2021 (although not significantly).
• In general, results for insurance companies are lower on most of the guidance metrics, compared to DTIs. Moreover, the gap between the two groups has widened considerably in some areas, most notably on:
• Developing guidance that strikes an appropriate balance between prudential considerations and the need for institutions to compete (a 40-point gap between DTIs and insurance companies);
• Consulting with the financial services industry when developing guidance (a 33-point gap); and
• Communicating its response, including rationale, to feedback provided by your industry sector during consultations related to guidance development (a 39-point gap).

Overall satisfaction with OSFI in processing regulatory approval applications has declined significantly since 2021.

• As with other results insurance companies expressed lower levels of satisfaction relative to DTIs. Notably, the proportion of insurance companies providing the top rating of ‘very satisfied’ has been declining since 2018.
• While most stakeholders understand the basis on which OSFI makes decisions about their application, insurance companies are much more likely to indicate this is the case relative to DTIs (a 19-point spread between the two groups). 

OSFI received high ratings for its effectiveness in supervising institutions from both DTIs and insurance companies.

• Ratings have, however, fallen back in the two specific areas of supervision which were assessed – providing an opportunity for the institution to discuss issues of concern, and the extent to which OSFI’s supervisory activities are scaled to reflect the nature, size, complexity and risk profile of the institution. 

Stakeholders remain highly satisfied with OSFI’s capacity to interact in the official language of their choice.

• Satisfaction on this metric has been virtually unanimous among both DTIs and insurance companies over the past two waves and there is little change in 2024 from the previous wave.

In open ended comments provided by DTIs and insurance companies at the conclusion of the survey, a number of issues were raised. 

• For insurance companies, comments were predominantly focused on reducing the pace of new and updated guidelines and providing companies with more time to respond.  This was also an issue for DTIs but to a somewhat lesser extent. DTIs focused equally on streamlining various initiatives and giving consideration to size and resource constraints.

For more information

Supplier Name: The Strategic Counsel
PWGSC Contract Number: 59017-23-0006
Contract Award Date: 2023-09-06
Contract Budget: $44,990.95

To obtain more information on this study, please e-mail information@osfi-bsif.gc.ca.

Statement of political neutrality

I hereby certify as Senior Officer of The Strategic Counsel that the deliverables fully comply with the Government of Canada political neutrality requirements outlined in the Policy on Communications and Federal Identity and the Directive on the Management of Communications of the Government of Canada and Procedures for Planning and Contracting Public Opinion Research. Specifically, the deliverables do not include information on electoral voting intentions, political party preferences, standings with the electorate or ratings of the performance of a political party or its leaders.

Signed: Donna Nixon, Partner

II. Background

A. Background to the study

Financial services are a highly regulated sector in Canada. To ensure the stability and success of financial institutions and pension plans, regulatory bodies have been established at both the federal and provincial levels to oversee the sector. The Office of the Superintendent of Financial Institutions (OSFI) is the primary regulator in Canada of more than 400 federally regulated financial institutions (all banks, federally incorporated or registered trust and loan companies, insurance companies, cooperative credit associations) and 1,200 administered pension plans, ensuring they are in sound financial condition and meeting their requirements.

Regular consultation with industry stakeholders is integral to OSFI’s collaborative approach in undertaking its mandate and to assessing how well it is performing in this respect. The Financial Institutions Survey (FIS), targeting CEOs in all federally regulated financial institutions, is a key element of OSFI’s stakeholder consultations program. This survey is conducted biennially, the last one having been completed in 2020-21. Previous waves of the FIS were conducted in 2007-2008, 2010-2011, 2012-2013, 2014-2015, 2016-2017 and 2018-2019.

B. Research objectives

The FIS focuses on examining and tracking stakeholder perceptions on OSFI’s performance overall and on specific aspects of its interactions with stakeholders, and evaluating its response to emerging issues. The core objectives of the 2023-2024 FIS include:

• Providing a high level assessment of OSFI’s overall performance, and identifying the drivers of satisfaction; and
• Assessing perceptions of OSFI’s performance in discharging its mandate, across a number of performance dimensions specific to its regulatory and supervisory activities.

The results and findings from this study provide data which is needed to meet OSFI’s performance reporting requirements and which enables OSFI to identify areas for improvement.

III. Methodology

In 2024, an online survey of 99 federally regulated financial institutions, including 39 deposit-taking institutions (DTIs) and 60 insurance companies, was completed based on information (i.e., contact details including name, organization, e-mail address, etc.) provided by the Office for the Superintendent of Financial Institutions (OSFI). The questionnaire (see Appendix: Questionnaires) was very similar to that which was employed in previous waves, allowing for data to be compared across the past two time periods (2021 and 2018). Although the questionnaire employed in 2024 contained only a subset of the questions from 2021. This was done to shorten the questionnaire and as an effort to reduce the burden of completing on financial institutions.

A. Sample design

OSFI provided The Strategic Counsel with an initial list of the universe of 236 federally regulated financial institutions in Canada. Each contact on the list was assigned a unique record and label so as to provide an e-mail invitation with a unique link.

B. Fieldwork and response rates

An initial e-mail communication was sent under the signature of the Superintendent of OSFI (see Appendix: E-mail Communications) to all 236 eligible institutions, alerting them to the upcoming survey. During this process, the contact list was updated to account for any CEOs who were no longer working for their corresponding institution. As a result of updating the list, one record was removed as the new CEO identified was a duplicate contact for another institution. Where multiple institutions had the same CEO, the institution with the largest asset size was retained. An additional record was also removed as the current CEO for the institution could not be identified. The initial e-mail communication from OSFI was then followed by a second e-mail invitation from The Strategic Counsel addressed to the remaining 234 CEOs of eligible institutions. The invitation was drafted in both official languages. Each invitation included a unique link to the survey which respondents could complete in their official language of choice. The unique link allowed The Strategic Counsel to monitor completions and direct reminders only to those who had not completed the survey. The survey was designed to permit the CEO of each institution to delegate a colleague or group of colleagues to complete the survey on his or her behalf. CEOs representing more than one financial institution were invited to participate on behalf of the institution with the largest asset size.

The Strategic Counsel also made a PDF version of the survey available to all respondents upon request. This permitted stakeholders to consult internally on a number of the questions prior to submitting their responses online. A total of 9 institutions requested a PDF copy.

The average interview duration was 10 minutes, however, this does not necessarily accurately reflect the actual time some may have spent completing the survey given that a number of respondents consulted colleagues in an effort to provide a collective response.

The survey was in field from January 10th to January 31st, 2024. To encourage higher response rates, several e-mail reminders were sent. The first e-mail reminder was issued on January 23rd, extending the closing date to January 31st. This was followed by another reminder on January 29th, reminding all institutions of the closing date.

As stated above, respondents were offered an opportunity to answer the survey in their official language of choice, English or French. A total of 94 institutions responded to the survey in English and 5 in French.

In total, 99 federally regulated financial institutions and insurance companies completed the survey, with an overall response rate of 42%.  The majority of those who completed the survey did so before the closing date of January 31st. However, two additional institutions responded to the survey after January 31st by submitting a PDF copy directly to TSC via e-mail. Responses from all institutions who submitted are reflected in this report.  As the FIS is a census survey, no margin of sampling error is reported. Details on the case dispositions and the calculation of the response rate for the total sample can be found in the Appendix: Response Rate.

Once the survey had closed, a thank-you note was sent to all respondents who completed the survey. In order to maintain respondent confidentiality, the thank-you note was sent from The Strategic Counsel on behalf of OSFI.

C. Pretesting

Following the programming and prior to a full launch of the survey, The Strategic Counsel and OSFI conducted several internal tests of the online link, in both languages. The purpose of the testing at this stage was to check the flow, timing, look and feel of the survey, as well as to ensure that all skips and logics were working as intended. Once the link had been thoroughly tested, a standard pre-test was deemed unnecessary given that the total sample for this particular survey was relatively small and highly targeted.

D. Notes to reader

• No weighting procedures were applied to the final data.
• Unless otherwise noted, results shown in this report are expressed as percentages and may not add up to 100% due to rounding and/or multiple responses to a given question.
• Throughout the report, total results are strictly referenced in the written findings and are not shown in the tables. The total results reflect the sum of the top two response categories (i.e., good/very good, somewhat satisfied/very satisfied, etc.)
• Unless otherwise indicated, data presented throughout the report excludes ‘Don’t know’ and ‘Not applicable’ response options.
• A full set of tabulated data is available under separate cover.

IV. Detailed findings from the survey

A. Overall impressions

1. Satisfaction with OSFI as a regulator

The majority of those surveyed continue to express high levels of satisfaction with OSFI as the principal prudential regulator and supervisor of Canada’s financial services industry. Although over eight-in-ten (85%) report being ‘very satisfied’ (43%) or ‘somewhat satisfied' (42%), satisfaction levels have dropped significantly since the previous iteration (by 9-points from 94% in 2021 to 85% in 2024). While below 2021 levels, current satisfaction is generally on par with levels reported in 2018.

In line with results from previous iterations in 2021 and 2018, DTIs (90%) provide higher satisfaction ratings than insurance companies (81%), although the proportion of DTIs who say they are ‘very’ or ‘somewhat’ satisfied has dropped significantly since the previous wave (90% in 2024 down from 100% in 2021).

Compared to insurance companies, DTIs are more likely to report being ‘very satisfied’ (67% vs. 27%), while insurance companies are more likely to say they are ‘somewhat satisfied’ with OSFI (54% vs. 23%).

Overall satisfaction with OSFI

2. Future risk areas

Both groups were asked to identify one or two risk areas that they believed should be priorities for OSFI in the next couple of years. Results are reported separately for DTIs and insurance companies in descending order of the frequency with which they were mentioned, as shown in the charts below.

Among DTIs, issues related to cyber risk and IT security continue to dominate responses to this question although not as strongly as they did in 2021. Over two-in-five (44%) identified this as a key risk area that OSFI should prioritize. In 2024, lending and mortgage-related risks were mentioned more often by DTIs, with just under one-in-five (17%) who identify it as a key area for OSFI, up from 5% in 2021. Over one-in-ten cite (14%) or AI, digitization, or the speed of change as risk areas (14% in each area) while slightly fewer mention credit or default risk (11%) or risks related to money laundering or fraud (11%).

Notably, mentions of risk management, operational risk and cultural risk are down from 22% in 2021 to 8% in 2024.

Risk areas that should be priorities for OSFI in the next couple of years

In line with results from 2021, representatives of insurance companies continue to cite environmental risks/natural disasters/climate change/earthquakes (37%) and cyber risk/IT security (31%) as high priorities for OSFI in the next couple of years. Just over one quarter (26%) mention regulatory burden/requirements/the regulatory environment, up significantly from 9% in 2021. Risk management/operational risk/culture risk (13%) and AI/digitization/speed of change (11%) were cited less frequently.

Risk areas that should be priorities for OSFI in the next couple of years

B. Guidance

Stakeholders were asked to rate OSFI on five dimensions of guidance, in addition to gauging OSFI’s overall effectiveness in providing a clear indication of its expectations.

1. Ratings of OSFI regarding guidance

OSFI receives the highest rating for responding in a timely manner to market developments or to industry suggestions that guidance needs updating (71% ‘good/very good’) and the lowest rating for communicating its response, including rationale, to feedback provided by the industry during consultations related to guidance development (60%). OSFI’s ratings with respect to responding in a timely manner that guidance needs updating returned to 2018 levels after a slight drop in 2021 (71% in 2024, up from 66% in 2021, similar to 73% in 2018). Notably, positive ratings of OSFI on consulting with the financial services industry when developing guidance declined significantly (61%, down from 79% in 2021). Ratings of OSFI on communicating its response to feedback provided by the industry during consultations also dropped by 13 points from 73% in 2021 to 60% in 2024, although this does not represent a statistically significant decline.

On all measures, ratings provided by DTIs are significantly higher than those offered by insurance companies, by between 29 and 39 points.

Ratings of OSFI on various aspects of guidance:

Overall ratings of OSFI in terms of responding in a timely manner to market developments or industry suggestions that guidance needs updating have improved slightly in 2024 (71% rated OSFI as ‘very good’ (29%) or ‘good’ (43%), up from 66% in 2021).

DTIs rated OSFI more positively on this measure relative to insurance companies (89% vs. 60% rated OSFI as ‘good/very good,’ respectively). A more significant proportion of DTIs provide OSFI the top rating of ‘very good’ (47%), relative to insurance companies (17%). By contrast, insurance companies relative to DTIs are more likely to offer a middling rating of ‘fair’ (37% vs. 8%, respectively).

OSFI rating of:

“Responding in a timely manner to market developments or to industry suggestions that guidance needs updating”

OSFI’s rating on consulting with the financial services industry when developing guidance declined significantly in 2024 (61% overall, with 23% saying ‘very good’; 38% saying ‘good’) compared to 2021 (78% overall, with 33% saying ‘very good’; 45% saying ‘good’).

In line with results from past iterations, a higher proportion of DTIs relative to insurance companies rate OSFI as ‘very good/good’ on this measure and the gap between sectors has increased (81% vs. 48%, respectively in 2024, a 33-point gap; 93% vs. 69%, respectively in 2021, a 24-point gap; 93% vs. 80%, respectively in 2018, a 13-point gap). The widening gap is primarily due to the difference in those who offer OSFI the top rating of ‘very good’ – 43% among DTIs versus 10% among insurance companies. Conversely, since 2018, the proportion of insurance companies who rate OSFI as ‘fair’ on this measure has increased significantly by 22 points from 15% in 2018 to over one-third (37%) in 2024.

OSFI rating of:

“Consulting with the financial services industry when developing guidance”

A majority of respondents (60%) rate OSFI positively (21% ‘very good’; 39% ‘good’) on communicating its response to feedback provided by the industry sector during consultations related to guidance development. However, ratings on this measure have also fallen off since 2018 at which time three-quarters (75%) of respondents offered a rating of ‘very good’ (23%) or ‘good’ (52%). This decline reflects a significant shift in the number of respondents who provide a rating of ‘fair’ on this measure (up from 16% in 2018 to 29% in 2024, a 13-point increase).

In keeping with the results reported in 2021, a higher proportion of DTIs rate OSFI positively (84% offer a rating of ‘very good’ (42%) or ‘good’ (42%)) compared to insurance companies (45% say ‘very good’ (8%) or ‘good’ (37%)).  This difference can be attributed to the significantly higher proportion of DTIs who provide OSFI the top rating of ‘very good’ (42%) relative to insurance companies (8%).

OSFI rating of:

“Communicating its response, including rationale, to feedback provided by your industry sector during consultations related to guidance development”

Less than half of respondents rated OSFI positively in terms of developing guidance that strikes an appropriate balance between prudential considerations and the need for institutions to compete (45% rate OSFI as ‘very good’ (13%) or ‘good’ (32%)). This represents a significant 19-point decline in positive ratings from 2021 (45% in 2024, down from 64% in 2021). Relative to 2021, respondents are less likely to provide OSFI a rating of ‘good’ (32% in 2024 vs. 51% in 2021) and more likely to provide a rating of ‘poor’ (21% in 2024 vs. 7% in 2021).

As with other measures, the proportion of DTIs who rate OSFI as ‘very good/good’ on this attribute is significantly higher relative to insurance companies (69% vs. 29%, respectively). Similar to the results noted above for OSFI on communicating its response, the difference in positive ratings between DTIs and insurance companies can be mostly attributed to the higher proportion of DTIs who provide the top rating of ‘very good’ (28% vs. 3%).

Since the previous wave there has been a significant decline in the proportion of insurance companies offering OSFI a positive rating of ‘very good/good’ (29% in 2024 down from 52% in 2021). This is largely due to a larger proportion who now offer OSFI a rating of ‘poor’ on this measure as compared to DTIs (32% and 5%, respectively).

OSFI rating of:

“Developing guidance that strikes an appropriate balance between prudential considerations and the need for institutions to compete”

Just over two-in-five respondents rate OSFI positively (42% gave a rating of ‘very good’ (9%) or ‘good’ (33%)) on the extent to which its guidance considers the nature, size and complexity of financial institutions. This reflects a significant decline in the ratings from 2018 (down from 57% in 2018 – a 15-point decline). Positive ratings on this performance measure dropped by 10 points from 52% in 2021 to 42% in 2024, although this does not represent a significant difference at the 95% confidence level. Relative to 2018 and 2021, a larger proportion of respondents now offer OSFI a less positive rating (31% gave OSFI a rating of ‘poor’ (23%) or ‘very poor’ (7%) compared to 16% (14% ‘poor’/2% ‘very poor’) and 13% (9% ‘poor’/4% ‘very poor’) in 2021 and 2018, respectively).

Positive ratings among DTIs and insurance companies have both declined, although not significantly (58% down from 67% for DTIs; 32% down from 42% for insurance companies). DTIs continue to be more likely than insurance companies to offer OSFI a positive rating (58% vs. 32%). The proportion of insurance companies rating OSFI positively on this measure has continued to decline. Current results show a significant decline in the ratings of 23 points from 2018 (32% ‘good/very good’ in 2024, down from 42% in 2021 and 55% in 2018).

OSFI rating of:

“The extent to which it considers the nature, size and complexity of financial institutions”

2. Effectiveness of OSFI regarding Guidance

The vast majority (87%) say that OSFI’s guidance is effective in providing a clear indication of its expectations, with just under one-third saying it is ‘very effective’ (32%) and over half saying it is ‘somewhat effective’ (55%). Results overall have remained relatively stable since 2018 (92% in 2021 and 86% in 2018).

There continues to be a significant gap in the ratings between DTIs and insurance companies. As compared to insurance companies a higher proportion of DTIs say OSFI is effective (97% ‘very/somewhat effective’ vs. 80% ‘very/somewhat effective’). Furthermore, DTIs are more likely to give OSFI the top rating of ‘very effective’ (53%) in this regard, relative to insurance companies (18%).

OSFI rating of:

“Effectiveness of OSFI’s guidance in providing a clear indication of its expectations”

C. Approvals

Just over two-in-five (43%) respondents indicated that their institution had made a request for a regulatory approval within the last two years.

There has been a slight dip in the proportion of DTIs making a request for a regulatory approval in the last two years, 34% in 2024 down from 48% in 2021. In contrast, there has been a slight increase in the number of insurance companies who indicate they have done the same, 48% in 2024 up from 38% in 2021.

Request for a regulatory approval in last two years

1. Satisfaction with OSFI’s approvals process

Among those respondents who had submitted a regulatory approval application to OSFI, a majority (58%) are ‘very satisfied’ (30%) or ‘somewhat satisfied’ (28%) with the process, although this reflects a decline in satisfaction from the previous wave (80% in 2021).

Satisfaction levels among DTIs and insurance companies do not vary significantly with 69% of DTIs saying they were ‘very satisfied’ (46%) or ‘somewhat satisfied’ (23%) compared to 52% of insurance companies who offer the same ratings of ‘very satisfied’ (22%) or ‘somewhat satisfied’ (30%). Notably, there has been a significant increase in the number insurance companies offering a rating of ‘somewhat dissatisfied’ since 2021 (33% in 2024, up from 8%).

Satisfaction with OSFI’s approvals process

2. Understanding of OSFI’s decision-making

The subset of respondents who had submitted an application to OSFI were also asked how well they understood OSFI’s decision-making process. Results have remained stable since 2018 with the majority of respondents who said they understood the process well (82%) – either ‘very well’ (31%) or ‘somewhat well’ (51%).

Continuing a trend observed in past iterations, insurance companies report higher levels of understanding (88% overall, with 35% saying ‘very well’ and 54% saying ‘somewhat well’) regarding the basis on which OSFI makes decisions about applications relative to DTIs (69% overall, with 23% saying ‘very well’ and 46% saying ‘somewhat well’).

Understanding of OSFI’s decision-making

D. Supervision

OSFI supervises financial institutions in accordance with its Supervisory Framework which was first introduced in 1999. The Framework is updated periodically and describes the principles, concepts and the core process that OSFI employs to guide its supervision of federally regulated financial institutions (FRFIs) in Canada.

1. Ratings of OSFI’s Supervision

Among small and mid-sized institutions, performance ratings on the extent to which OSFI’s supervisory activities are scaled to the nature, size, complexity and risk profile of the institution have dropped slightly as compared to 2021. Seven-in-ten (70%) provide a positive rating of ‘very good’ (22%) or ‘good’ (47%), whereas in 2021 just under four-in-five respondents provided a positive rating (78% overall, with 37% saying ‘very good’ and 41% saying ‘good’). There has been a significant decline in the proportion of institutions providing OSFI the top rating of ‘very good’ since 2021 (a 15-point decline from 37% in 2021).  Notably, this decline is also seen among insurance companies (17% offer a rating of ‘very good’ in 2024, down from 35% who offered the same rating in 2021).

By contrast, and following a trend observed in 2018 and 2021, DTIs continue to rate OSFI more positively on this measure (75% - 31% ‘very good’; 44% ‘good’) compared to insurance companies (66% - 17% ‘very good’; 49% ‘good’).

OSFI rating of:

The extent to which its supervisory activities (e.g. ongoing monitoring, onsite reviews, reporting requirements) are scaled to reflect the nature, size and complexity and risk profile of your institution

Over three-quarters rate OSFI positively in terms of providing institutions an opportunity to discuss issues of concern with OSFI prior to it coming to a conclusion (78% overall, with 42% rating OSFI as ‘very good’ and 36% providing a rating of ‘somewhat good’). This reflects a significant decline from the previous wave (a 12-point decline from 90% in 2021). This shift in ratings can be mostly attributed to a significant drop in the proportion of respondents providing OSFI the top rating of ‘very good’ (42%, down from 57% in 2021).

Ratings on this metric for both DTIs and insurance companies are similar with about four-in-five (79%) DTIs saying OSFI is ‘very good’ (59%) or ‘good’ (20%) and three-quarters (76%) of insurance companies offering the same (31% ‘very good’; 46% ‘good’). Notably, DTIs are more likely to rate OSFI as ‘very good’ (59%), relative to insurance companies (31%). Insurance companies are more likely to offer a rating of ‘good’ (46%) as compared to DTIs (21%). Furthermore, a significantly smaller proportion of insurance companies give OSFI the top rating of ‘very good’ (31%) in 2024, relative to 2021 (58% – a 27-point difference).

OSFI rating of:

Providing an opportunity for your company/institution to discuss issues of concern with OSFI prior to OSFI coming to a conclusion

2. Effectiveness of OSFI’s Supervision

OSFI receives strongly positive ratings for the effectiveness of its supervision (91%) with a majority rating OSFI as ‘very effective’ (54%) and over one-third rating OSFI as ‘somewhat effective’ (37%). This is in line with findings from 2018, although it reflects a significant decline in the proportion of respondents who provide the top rating of ‘very effective’ since 2021 (down 16 points from 70%). Although not statistically significant at the 95% confidence level, to maintain the strong positive ratings and counterbalance the significant decline in those who provide the top rating, there has been a wave-over-wave increase in the number who rate OSFI as ‘somewhat effective’ (from 25% in 2021 to 37% in 2024).

Ratings among DTIs and insurance companies do not vary significantly and have remained relatively stable between 2018 and 2024. The vast majority of DTIs rate OSFI positively (95%) saying they are either ‘very effective’ (63%) or ‘somewhat effective’ (32%), while just under nine-in-ten (88%) insurance companies say the same (48% ‘very effective’; 40% ‘somewhat effective’). Notably, there has been a significant decline in the proportion of insurance companies providing OSFI the top rating of ‘very effective’ (a drop of 21 points from 69% in 2021).

Effectiveness of OSFI’s supervision

E. Communication with OSFI

OSFI continues to receive strong positive ratings from respondents regarding its capacity to interact with institutions in their official language of choice, with 96% of respondents saying they are ‘very satisfied’ (91%) or ‘somewhat satisfied’ (5%).

There is little difference on this metric between DTIs (95% - 92% ‘very satisfied’; 3% ‘somewhat satisfied’) and insurance companies (97% - 90% ‘very satisfied’; 7% ‘somewhat satisfied’).

Satisfaction with communication with OSFI

F. Final comments

Respondents were given an opportunity to provide additional comments for OSFI concerning any of the issues raised in the questionnaire or general comments related to OSFI’s work and supervision.

Although relatively few DTIs provided additional comments (n=18), about three-in-ten (28%) mentioned a desire for OSFI to streamline initiatives and avoid duplication/redundancies. A further one-in-five (22%) discussed reducing the pace of new or updated guidelines and allowing more time for institutions to respond and implement. Just under one-in-five (17%) provided comments related to a need for OSFI to consider the size and resource constraints of institutions. One-in-ten (11%) discussed the turnover within OSFI’s supervisory team and a want for OSFI to minimize supervisory team changes. A range of other items were cited with less frequency, as shown in the table below.

DTI final comments

Among insurance companies, there was also a consensus regarding concerns about the pace of new and updated guidelines with over two-thirds (69%) providing comments related to it and the need for additional time to respond and implement. As with DTIs, one-quarter (27%) of insurance companies cite the need for OSFI to give greater consideration to the size and resource constraints of institutions.  One-in-five (20%) provided comments related to financial concerns and extra costs while less than one-in-five (18%) discussed the need for OSFI to streamline various initiatives. Over one-in-ten (14%) discussed transparency and better communication with OSFI while one-in-ten (10%) provided comments related to OSFI listening to stakeholders and adopting industry feedback.

Insurance final comments

V. Appendix

A. Response rate

In total, 99 federally regulated deposit-taking institutions and insurance companies completed the survey, with an overall response rate of 42%.

The response rate was calculated according to the standard Empirical Method formula of R / (U + IS + R), as follows:

• The number of responding units (completed) = 99

Divided by

• The sum of the unresolved numbers (0), the in scope non-responding (135) and the responding units (99) = 234

B. E-mail communications

1. Invitation letter from the Superintendent

January 3, 2024

To: Federally Regulated Financial Institutions

Subject: Confidential online survey commissioned by OSFI

I am writing to invite your participation in an important confidential online survey that is being conducted by The Strategic Counsel, an independent research firm, on behalf of the Office of the Superintendent of Financial Institutions (OSFI). OSFI regularly commissions studies with senior members of the financial community to obtain their assessment of OSFI’s effectiveness as a regulator and supervisor. Your participation in the survey is voluntary. Your acceptance or refusal to participate will not affect your relationship with OSFI; however, your feedback will help us to improve our performance, which we believe is of ultimate benefit to you and your organization.

In the coming days, The Strategic Counsel will contact you by e-mail with a link to the survey, which is hosted on a secure Internet site. Only The Strategic Counsel will have access to your electronic responses. The survey should take approximately 5-10 minutes to complete. You may pause and save your responses at any time. We encourage you to canvass your colleagues for their views, if you feel this would be helpful.

OSFI is committed to a confidential research process and the resulting report will present responses in summary form and without attribution. As part of OSFI’s commitment to transparency and accountability, the final results will be posted on OSFI’s website in June 2024.

If you would like to discuss this study, please feel free to contact Arwen Vesely, Manager, Stakeholder Affairs at OSFI, at (343) 596-0152, or Donna Nixon, Partner, The Strategic Counsel at (416) 975-4465 ext. 532.

We thank you for considering this request.

Sincerely,

Peter Routledge
Superintendent

2. Survey invitation from The Strategic Counsel

Subject: Online survey commissioned by OSFI / Sondage en ligne commandé par le BSIF

Hello/Bonjour,

(Le texte français suit l’anglais)

Recently, you will have received via email a letter of invitation from Peter Routledge, Superintendent of OSFI, requesting your participation in an online survey of senior members of federally regulated financial institutions. The purpose of the survey is to obtain your assessment of OSFI’s effectiveness as a regulator and supervisor. If you have not received the letter, please contact us and we will share a copy with you.

The Strategic Counsel, an independent research firm, is conducting this survey on behalf of OSFI. The survey will take no more than 10 minutes to complete and your responses will be treated in confidence. All the information you provide will be kept anonymous and will be reported only in aggregate form.

Please follow this link to complete the survey: [Link inserted]

We kindly ask that you complete the survey by January 24, 2024.

If you have any questions about the survey, please contact Donna Nixon, Partner, The Strategic Counsel at (613) 863-5350 (dnixon@thestrategiccounsel.com) or Arwen Vesely, Manager, Stakeholder Affairs at OSFI, at (343) 596-0152 (arwen.vesely@osfi-bsif.gc.ca).

OSFI appreciates your participation and looks forward to your feedback.

Thank you,

The Strategic Counsel

Having trouble accessing the survey online? Please email The Strategic Counsel at OSFI-BSIF@thestrategiccounsel.com.

If you do not wish to be contacted again about this survey, please click here to opt out of further emails.

This e-mail is being sent to you by The Strategic Counsel on behalf of OSFI. The Strategic Counsel attempts to comply with all the provisions of the Personal Information Protection and Electronic Documents Act (PIPEDA) and the Canada Anti-Spam legislation Act (CASL) for commercial e-mail. The Strategic Counsel is located at 1 St. Clair Ave. W, Suite 1200, Toronto, ON M4V 1K6.

3. Survey reminders

First reminder – Extension to closing date

Subject: Reminder: OSFI Survey – Extension : Closes January 31, 2024 / RAPPEL: Sondage du BSIF – Prolongation : La date limite est le 31 janvier 2024

Hello/Bonjour,

(Le texte français suit l’anglais)

This is a reminder concerning OSFI’s Financial Institutions Survey – the survey will now be closing at midnight on January 31, 2024. A short while ago, you received via email a letter of invitation from Peter Routledge, Superintendent of OSFI, requesting your participation in this survey. If you have not received the letter, please contact us and we will share a copy with you.

Your input is very important to the success of this study. If you have not yet had a chance to complete the survey, we would appreciate your participation.  The Strategic Counsel, an independent research firm, is conducting this survey on behalf of OSFI. The survey will take no more than 10 minutes to complete and your responses will be treated in confidence.

To proceed to the survey, please click on the following link: [Link]

If you have any questions about the survey, please contact Donna Nixon, Partner, The Strategic Counsel at (613) 863-5350 (dnixon@thestrategiccounsel.com) or Arwen Vesely, Manager, Stakeholder Affairs at OSFI, at (343) 596-0152 (arwen.vesely@osfi-bsif.gc.ca).

OSFI appreciates your participation and looks forward to your feedback.

Thank you,

The Strategic Counsel

Having trouble accessing the survey online? Please email The Strategic Counsel at OSFI-BSIF@thestrategiccounsel.com.

If you do not wish to be contacted again about this survey, please click here to opt out of further emails.

This e-mail is being sent to you by The Strategic Counsel on behalf of OSFI. The Strategic Counsel attempts to comply with all the provisions of the Personal Information Protection and Electronic Documents Act (PIPEDA) and the Canada Anti-Spam legislation Act (CASL) for commercial e-mail. The Strategic Counsel is located at 1 St. Clair Ave. W, Suite 1200, Toronto, ON M4V 1K6.

Final reminder

Subject: Reminder: Deadline for OSFI Survey – January 31, 2024 / RAPPEL: Date de clôture du sondage du BSIF – 31 janvier 2024

Hello/Bonjour,

(Le texte français suit l’anglais)

This is a reminder concerning the closing date for OSFI’s Financial Institutions Survey – the survey will be closing at midnight on January 31, 2024. Your input is very important to the success of this study. If you have not yet had a chance to complete the survey, we would appreciate your participation.

The Strategic Counsel, an independent research firm, is conducting this survey on behalf of OSFI. The survey will take no more than 10 minutes to complete and your responses will be treated in confidence.

To proceed to the survey, please click on the following link: [Link]

If you have any questions about the survey, please contact Donna Nixon, Partner, The Strategic Counsel at (613) 863-5350 (dnixon@thestrategiccounsel.com) or Arwen Vesely, Manager, Stakeholder Affairs at OSFI, at (343) 596-0152 (arwen.vesely@osfi-bsif.gc.ca).

OSFI appreciates your participation and looks forward to your feedback.

Thank you,

The Strategic Counsel

Having trouble accessing the survey online? Please email The Strategic Counsel at OSFI-BSIF@thestrategiccounsel.com.

If you do not wish to be contacted again about this survey, please click here to opt out of further emails.

This e-mail is being sent to you by The Strategic Counsel on behalf of OSFI. The Strategic Counsel attempts to comply with all the provisions of the Personal Information Protection and Electronic Documents Act (PIPEDA) and the Canada Anti-Spam legislation Act (CASL) for commercial e-mail. The Strategic Counsel is located at 1 St. Clair Ave. W, Suite 1200, Toronto, ON M4V 1K6.

4. Thank-You note

Email address: OSFI-BSIF@thestrategiccounsel.com

Subject: Thank You – OSFI Survey/Remerciements – Sondage du BSIF

Hello/Bonjour,

(Le texte français suit l’anglais)

The Strategic Counsel, on behalf of OSFI, would like to thank you for taking part in OSFI’s 2024 Financial Institutions Survey. Your participation is greatly appreciated and your input will be valuable to OSFI as it works towards improving its performance as a regulator and supervisor.

In the interests of transparency and accountability, the results will be posted on Library and Archives Canada (LAC) in August of 2024. OSFI is committed to a confidential research process and the report will present responses in summary form only, and without attribution.

Thank you again.

Regards,

The Strategic Counsel

If you do not wish to be contacted again about this survey, please click here to opt out of further emails.

This e-mail is being sent to you by The Strategic Counsel on behalf of OSFI. The Strategic Counsel attempts to comply with all the provisions of the Personal Information Protection and Electronic Documents Act (PIPEDA) and the Canada Anti-Spam legislation Act (CASL) for commercial e-mail. The Strategic Counsel is located at 1 St. Clair Ave. W, Suite 1200, Toronto, ON M4V 1K6.

C. Questionnaires

1. English questionnaire

Financial Institutions Survey (FIS) 2023-2024

Official Language Active Offer

Please select your preferred language / Veuillez sélectionner la langue de votre choix :

• English
• Français

Introduction

The Strategic Counsel has been retained by the Office of the Superintendent of Financial Institutions (OSFI) to conduct the 2023-2024 edition of its biennial survey with Chief Executive Officers of Federally Regulated Financial Institutions.

You are invited to provide your assessment of OSFI’s effectiveness as a supervisor and regulator.  Your feedback is critical for OSFI to understand how well it is achieving its strategic objectives, in order to be accountable to stakeholders like yourself and to improve its effectiveness. Participation in the survey is voluntary and will take about 5-10 minutes.

You can be assured that The Strategic Counsel, as an independent third party, will hold your responses in strict confidence. OSFI will not know who participated in the research or what specific institutions have said about it.

As a standard industry practice, The Strategic Counsel has put in place secure procedures to ensure that confidentiality is maintained at all times. Please click here to view their privacy policy. The Strategic Counsel will provide OSFI with a report aggregating the findings from this survey. The results of the research will be posted on OSFI’s website.

To begin the survey, please click on the [>>] button below.

Please only use the [<<] or [>>] buttons to navigate through the survey.

Overall Impressions

1. Overall, how satisfied are you with OSFI as the principal prudential regulator and supervisor of Canada’s financial services industry?

• Very Dissatisfied
• Somewhat Dissatisfied
• Neither Satisfied nor Dissatisfied
• Somewhat Satisfied
• Very Satisfied
• Don’t Know

4. What one or two risk areas do you believe should be priorities for OSFI in the next couple of years pertaining to (institutions in the insurance sector/institutions in the deposit-taking sector)? [Non-mandatory]

• [Open end]

Guidance

As needed, OSFI develops Guidance (which may include guidelines and advisories) for (institutions in the insurance sector/institutions in the deposit-taking sector).

How would you rate OSFI with respect to:

5. Responding in a timely manner to market developments or to industry suggestions that guidance needs updating

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

6. Consulting with the financial services industry when developing guidance

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

9. Communicating its response, including rationale, to feedback provided by your industry sector during consultations related to guidance development

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

11. How would you rate OSFI with respect to developing guidance that strikes an appropriate balance between prudential considerations and the need for institutions to compete?

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

12. [Programming instruction: Only ask of small and mid-sized Institutions] How would you rate OSFI’s guidance on the extent to which it considers the nature, size and complexity of financial institutions?

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

13. Overall, how effective do you think OSFI’s guidance is in providing a clear indication of its expectations?

• Very Ineffective
• Somewhat Ineffective
• Neither Effective nor Ineffective
• Somewhat Effective
• Very Effective
• Don’t know

Approvals

As you know, OSFI’s Superintendent, and in some cases the Minister of Finance, must approve certain business transactions or initiatives (institutions in the insurance sector/institutions in the deposit-taking sector) wish to take.

The following question(s) pertain to OSFI’s approvals process as it relates to your institution.

14. Has your institution made a request for a regulatory approval in the last two years?

• Yes - Continue to question 15
• No - Skip to question 18
• Don’t know - Skip to question 18

15. What is your institution’s overall level of satisfaction with OSFI in processing regulatory approval applications?

• Very Dissatisfied
• Somewhat Dissatisfied
• Neither Satisfied nor Dissatisfied
• Somewhat Satisfied
• Very Satisfied
• Don’t Know

16. How well does your institution understand the basis on which OSFI makes decisions about your applications?

• Very Poorly
• Somewhat Poorly
• Neither Well nor Poorly
• Somewhat Well
• Very Well
• Don’t Know

Supervision

The following questions pertain to OSFI’s supervision as it relates to your institution.

How would you rate OSFI with respect to:

18. [Programming instruction: Only ask of small and mid-sized Institutions]  The extent to which its supervisory activities (e.g. ongoing monitoring, onsite reviews, reporting requirements) are scaled to reflect the nature, size and complexity and risk profile of your institution.

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

19. Providing an opportunity for your institution to discuss issues of concern with OSFI prior to OSFI coming to a conclusion.

• Very Poor
• Poor
• Fair
• Good
• Very Good
• Don’t Know

22. Overall, how effective do you think OSFI is in supervising (e.g. ongoing monitoring, on‑site reviews including supervisory recommendations, reporting requirements, etc.) your institution?

• Very Ineffective
• Somewhat Ineffective
• Neither Effective nor Ineffective
• Somewhat Effective
• Very Effective
• Don’t Know

Communication

23. Thinking about your dealings with OSFI’s staff on any supervisory or regulatory matter, how satisfied are you with OSFI’s capacity to interact with you in the official language of your choice (i.e., English or French)?

• Very Dissatisfied
• Somewhat Dissatisfied
• Neither Satisfied nor Dissatisfied
• Somewhat Satisfied
• Very Satisfied
• Don’t Know
• Not applicable

Final Comments

26. Are there any other comments you would like to make concerning the issues raised in this questionnaire or anything else (for example, how OSFI could help to reduce regulatory burden on FRFI’s, etc.)? [NON-MANDATORY]

• [Open end]
  

Exit screen

Thank you. The survey is now complete. Please click on the "submit" button below to submit your results.

The Strategic Counsel would like to thank you for your participation on behalf of OSFI.

French Questionnaire

D. Tabulated data

The full set of tabulated data is submitted under separate cover.