Evidence of meeting #100 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was employees.
A video is available from Parliament.
5:35 p.m.
Liberal
The Chair Liberal Wayne Easter
Is that possible for the banks to do, in a way that doesn't compromise their commercial interests?
5:35 p.m.
Executive Vice-President, Personal and Commercial Banking, Royal Bank of Canada
Whatever you require, we're happy to provide.
5:35 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay. If the banks could then provide that information to the clerk, it would be helpful.
Robert, you had an earlier question as well in which you asked for information. Do you want that too?
5:35 p.m.
Executive Vice-President, Personal and Commercial Banking, Royal Bank of Canada
There's also the FCAC and OSFI review under way. It is comprehensive, as was referenced earlier. All these materials, as well as the ongoing monitoring practices and calibration practices for these programs, are being reviewed as part of that.
5:35 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Thank you, Mr. Chair.
Madame, Monsieurs, welcome to your House of Commons.
Gentlemen, don't take it personally, but I will ask my question to Madame Blanchet.
We are going to have the pleasure of speaking French together.
Can you hear me clearly?
5:35 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
Could you speak a little louder?
5:35 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Yes; once again I'm going to have to repeat what I said last week. You know, in the House, I am so modest and reserved that my voice does not carry. So I'm going to speak a little louder.
Mrs. Blanchet, as a director and key person at the National Bank, you are aware that there have been some very critical news reports about the Canadian banking world. You will also know that this parliamentary committee has over the past few weeks heard some very alarming testimony. People have said that today, a great deal of pressure is still being exerted on bank employees to sell financial products, even if this puts people in a dangerous financial situation.
First, I would like you to tell us why in your opinion banking services are not like other services. A shoe salesman, for instance, has to sell as many shoes as possible, but people who work in your business should not be engaging in high-pressure sales.
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
In fact, according to our client-oriented approach, we work first and foremost in the interest of our client. We explore his or her needs in order to propose the most pertinent solutions. Our clients ask us to be proactive and to anticipate their needs, to be relevant in all of our interactions with them, and that is why we focus our efforts on those interactions.
5:40 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
You have internal audit services. We were told earlier that all banking institutions record conversations between employees and clients. Is that also the case at the National Bank?
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
Yes, all of the conversations in our call centres are recorded. In certain situations the client can also have access to those recordings at his request.
5:40 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Good. So those recordings can be listened to. In fact, people do listen to them, but they are part of your enterprise and that is done in order to train your employees and to ensure that everything is done according to the rules. Is that correct?
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
Yes. We do use the recordings of calls to train our employees and get them to improve the relevance of the conversations. However, we have several internal sectors at the Bank that are independent, such as the internal audit sectors, that report directly to the president and the board of directors. We also use those mechanisms to ensure that we have what we call “a third line of defence”, and a good understanding of situations that might arise.
5:40 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
And are these people on the third line of defence, as you said, employees of the National Bank? Are they employees of the National Bank, paid by the National Bank?
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
Yes, the people on the third line of defence are employees of the National Bank. It is important to note that these sectors are independent. As I said, internal audit reports directly to the board of directors. We also have a client ombudsman and an employee ombudsman. We have both. They also are independent.
5:40 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Do you think that if this third line were truly independent—that is if the employees' salaries were not paid by the bank, the employer—this would allow them to have more autonomy, and greater moral authority?
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
As I mentioned in my opening statement, the sound management of risk is an inherent part of our corporate culture, and it is deeply rooted in our organization. We take this very seriously and we work in close cooperation with all of our internal independent sectors to constantly improve our practices.
5:40 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
I see. More specifically, would you prefer that these third line employees not be employees of the National Bank?
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
I would say no.
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
First, because they are very closely aligned with our practices. Our third line of defence employees are very aware of what goes on in our organization. They have access to all of the material we can make available, and we are very transparent about this. And so I would say no, I don't see the need for that.
5:40 p.m.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
How would you assess the risk of errors? When I say “risk of errors”, I am not referring to someone who makes a mistake writing down a number, but to someone who is using high-pressure sales tactics. The people who spoke to CBC/Radio-Canada were not from Mars, after all. The people who came to speak to us here and sometimes delivered very moving testimony were not from elsewhere. The people who call us at our riding offices are not disconnected from reality either. Canadians are the ones who are being subjected to these high-pressure sales tactics. You are in this environment on a daily basis, but on the other side of the fence; what percentage of clients would you say have been victims of high-pressure sales?
5:40 p.m.
Senior Vice-President, Distribution, Solutions and Processes Retail Banking, National Bank of Canada
I do not have that information in hand right now. What I can confirm is that operational quality and risk management are an inherent part of the management framework surrounding the performance of our employees. That is on an equal footing with reaching financial objectives. In that sense, there is no undue pressure. Exercising undue pressure on our employees is also completely against our ethics code.
