Finance Committee on June 12th, 2017

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Chair.

Gentlemen, welcome to the House of Commons. We deeply appreciate the quality of the people we have in front of us today.

I will, in the same spirit as that of Mr. Fergus, ask one question of all three of you.

Gentlemen, you spoke about advising people in your business and about having no sales targets. Everything is going well. You say, “We are here, first and foremost, for the people and the customer.” That's not exactly what we have seen on TV and not exactly what we heard two days ago here in this parliamentary committee.

I was wondering what kind of watchdog you have in your business. When I talk about a watchdog, it's someone who can listen in on a phone call when one of your employees calls to speak to a customer. Do you have that kind of watchdog who can just listen in, without the knowledge of your employee?

[The Chair, Liberal, Wayne Easter]

Mr. Pilkington.

[Andrew Pilkington]

Yes, we do.

We record every call that comes into the phone channel. If there is ever an issue and a customer complains about something, then we can go back and actually listen to that call in its entirety. Every single call is recorded and held indefinitely.

We have regular monitoring. There are teams of people whose sole responsibility is to actually select calls at random and listen to those calls. Where they see that an employee has not necessarily done the right thing in terms of the advice offered or that they need some refresher training, then we'll go away and do that, and coach the employee. There is regular, ongoing monitoring by the actual line of business. Then, of course, we have partners in compliance, for example, who will come in. Audits, as well, will happen in order to ensure that everybody is doing the right thing.

[The Chair, Liberal, Wayne Easter]

Mr. McPhedran.

[James McPhedran]

Similarly, in our contacts and our channels, we record every call. We also have a mechanism whereby we do speech analytics. If there are things we want to look at specifically, we can pull those calls out and have a look there.

In our branch channel, it's done mostly through coaching from their supervisor. As well, the volume of surveys we do—we'll do over a million this year—is such that each branch gets feedback, mostly on a weekly basis, as to the interactions their staff are having with their customers. It's very robust. This is something we look at for compliance reasons. More importantly, it's vital for us to do the things we need to be doing for customers.

[The Chair, Liberal, Wayne Easter]

CIBC.

[Scott Wambolt]

Similar to the other gentleman, we have recording devices in place in our contact centres. We record all of the calls, and we audit them. It's usually more for coaching or training as opposed to a watchdog-type approach. We keep them on file in case there's ever a dispute or a client calls in and claims something. We can go back and validate it through the recordings.

In our banking centres, the dominant theme is to do what's right for the client. We measure that at a banking centre level, in terms of client satisfaction. We also have coaches who are deployed across the country. They are able to help various members of our team in the banking centres, should we spot something that may not be quite right. They can intervene and train, retrain, coach, and help guide that staff member to the appropriate behaviour.

[The Chair, Liberal, Wayne Easter]

Mr. Deltell.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I want to go a bit further. It's quite interesting to know that every call is recorded.

Can the consumer ask to get access to that? Is that possible? If someone thinks he has not been treated well by your employee, can he call up your bank and say, “Well, just listen to the recording, and then you will see that he was not good”? Can a consumer do that?

[Andrew Pilkington]

If customers make a complaint about a specific interaction, obviously we'll listen to the call and investigate it. If we feel the employee did not do right by the customer, we'll clearly rectify it with the customer. If the customer is insistent there was an issue, but we feel the employee has done everything right and has followed the proper procedures and training, then occasionally we'll have the customer join a call and actually listen to the actual call itself. That's normally when the matter ends.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

So, the one who is listening to the call is one of your employees? Is that correct?

[Andrew Pilkington]

The one who is monitoring the call?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Yes. That third party is your employee?

[Andrew Pilkington]

The third party would be an employee.

We would have people in the line of business, the phone channel business, whose jobs are to listen to those calls day in and day out, and to coach and train the people who are working on the front line. However, we also have other, as we call them, lines of defence—compliance, order, etc.—that would actually come in and do testing and monitoring as well.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Okay, but do I understand correctly that there is a so-called watchdog? I just want to understand what you are talking about. The one who is listening, the one who coaches, is one of your employees.

Would you welcome someone outside of your bank system to be the watchdog?

[James McPhedran]

I'll speak on behalf of Scotiabank. The majority of our concerns are rectified through our internal channels, whether that be what we call our office of the president or our internal ombudsman. The number of concerns that are rectified there is in the 95% plus range.

Ultimately, if it gets referred to an external ombudsperson—that happens on occasion—we're supportive of that.

[The Chair, Liberal, Wayne Easter]

Do you want to add anything, Mr. Wambolt, or has it all been said?

[Scott Wambolt]

It's pretty much all been said other than we think the ultimate watchdogs are our clients. If they become dissatisfied with CIBC, there are any number of competitors they can go to. We poll our clients on a very regular basis. We report back, banking centre by banking centre, what their clients are saying, and that includes verbatim comments from our clients.

[The Chair, Liberal, Wayne Easter]

One should never make assumptions, but I assume that all these calls have the runner that tells an individual that the line is being monitored, etc., correct?

[Andrew Pilkington]

Absolutely. That's correct.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you.

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for being here. I feel this is an important time for our study on bank behaviour.

Up to this point, I have not really been reassured by your comments because you have to an extent denied that there is a problem with the culture. You repeated what the Canadian Bankers Association has said, that having sales targets contributes to the culture that places the client first. However, those who have worked in the banks have actually told us the opposite, that sales targets have resulted in clients not being a priority.

I first want to talk to the TD Bank representative because that bank was mentioned on a number of occasions in the testimonies that I have received from former employees. Some of them talked about a culture that made them feel obliged to sell products if they wanted to reach their targets. So they put their own interest or the bank's interest before the clients' interest. To reach those targets, employees were therefore sometimes obliged to do things that may or may not have been legal.

Are your employees required to go as far as falsifying documents and providing products without the clients' consent in order to achieve the targets you set for them? Do you recognize that this is a problem in your bank? Are you aware that the problem exists in your bank?

[The Chair, Liberal, Wayne Easter]

Who wants to start?

Mr. Pilkington.

[Andrew Pilkington]

We, obviously, do not encourage employees to falsify documents. It is not a frequent occurrence. When it does happen and there's an example of forgery taking place, we move quickly to an investigation, and we would terminate that employee forthwith. We would never encourage any underhanded dealings and fraud like that. It's fraud. It's against our code of conduct. We're very clear about that.

When employees come into the bank, they actually all read the code of conduct, and they attest that they will follow it. That's an annual event, as well, so they have to reread the code of conduct and attest to it.

In fact, let me just read one or two sentences from our code of conduct from the piece that actually covers sales misconduct. It says:

...whenever employees are servicing customers or providing advice or recommendations, we must deal fairly with our customers. As such, we must not allow our desire to increase our performance results to come before our focus on our customers.

So, we're very clear in the code. We back that up, as I mentioned earlier, with a lot of different systems and processes to ensure that if we see any behaviour that is undesirable, that is not in keeping with customers' interests, then we act very quickly.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

You ask your employees to sell more and more. Do you think that is in the clients' interests? Isn't it rather in the interests of your profits and the bank's shareholders?