Thank you, Mr. Chair, and members of the committee, for inviting us to participate in this pre-budget consultation.
My name is Alex Vronces. I'm the executive director of Fintechs Canada, which is an industry association of Canada's most innovative financial technology companies.
Collectively, our members serve millions of Canadians on a daily basis, which means that our members help your constituents manage their finances and pay for things every day. This is why the premise of our pre-budget submission isn't an easy thing for me to say out loud. We represent a growing chunk of the financial sector, yet here I am to tell you that the financial sector is letting Canadian consumers and businesses down.
Over the course of their lives, consumers pay thousands of dollars in banking fees. For many of them, you can imagine that what they're paying exceeds what their savings are able to generate in interest. The Canadian Federation of Independent Business surveys its members and puts out report cards on Canada's banks. They consistently get low scores for their customer service, access to capital, and fees. According to research from Payments Canada and Ernst & Young, Canadian businesses pay $14 billion to $32 billion every five years just to receive and send money.
The fees and customer dissatisfaction in Canada aren't unique. What's unique in Canada is that we get to do something about it. Other advanced economies, including much of Europe, the United Kingdom, Australia and the United States, have had the same issues, but they've been making their financial sectors work harder for their citizens. They've been doing it by modernizing their financial sector laws and infrastructure.
In other countries, citizens have been put in control of their financial information. This protects their financial security while giving them a way to access the tools they need to meet their financial goals, but that's not yet in Canada. Millions of Canadians choose to share their financial information in exchange for better services. A great example of this is a program that lets Canadians use proof of rent payments to build their credit score, so that one day they can qualify for a mortgage.
The way Canadians are forced by their banks to share that financial information today is unreliable and risky. Businesses in other countries have been given lower-cost and faster ways to send and receive money, but that's not yet in Canada.
Our members are finding that small businesses aren't being paid on time, according to their own research. That is forcing businesses to take out loans to make ends meet, whether that's to make payroll or fulfill a new order. According to the World Bank, Canada is one of the few countries in the world to not have a real-time payment system. When the United Kingdom built theirs, one of our members was able to slash costs for its customers by 20% immediately after gaining access to it.
This is why we encourage the government to double down on its recent commitments to make the financial sector more affordable for Canadians.
We ask this committee to recommend that the government, one, gives Canadians a way to shop around for the best services. It can do this by implementing an open banking framework that puts Canadians in control of their financial formation.
Two, we ask this committee to recommend that the government protect Canadians' sensitive financial information. It can do this by establishing an independent oversight body that's going to be the referee of the framework, making sure that everyone is following the rules.
Three, we ask this committee to recommend that the government uphold the integrity of our financial sector. It can do this by supporting Payments Canada's efforts to build a real-time payment system.
Four, we ask this committee to recommend that the government give Canadians lower-cost, safer and faster ways to send and receive money. It can do this by amending the Canadian Payments Act to include credit unions and payment service providers in Canada's supervised payment system.
Other countries have done this and more. While other countries are making their financial sectors work harder for their citizens and small businesses, Canadians continue to wait for a financial sector that works harder for them.
On behalf of Fintechs Canada and all of our members, thank you again for the opportunity to participate in this consultation. We and our members are keen to keep working with all of you to make the financial sector more affordable for Canadians.