Thank you very much.
I'd like to update Mr. Revell's title. He just got a new job. He's also doing two jobs at once—the senior vice-president and chief information officer of retail and business banking at CIBC. Outside of his banking hours, he spends a lot of time supporting tech start-ups, particularly in the Kitchener-Waterloo area. I thought you should know that.
Good afternoon. I want to thank you for inviting the CBA to participate in these hearings.
There are three things I want to talk to you about today. Let me start with online banking.
This committee has considered what e-commerce might look like in the future, but it's important to recognize that here in Canada today, we have a successful example of Internet-based commerce that can serve as a model for the expansion of e-commerce in other areas of the economy. Obviously, I'm talking about online banking, which Canada's banks offer to their 25 million customers across the country.
Online banking is the most widely used form of Internet commerce in Canada, with over two-thirds of Canadians reporting that they used online banking in 2010.
Whether it's paying the phone bill, the cable bill, utilities, toll roads like the 407 north of Toronto, newspaper subscriptions, or a whole host of other kinds of invoices, Canadians can do all of this and more online through their bank's website. They can also transfer funds between accounts. They can buy and sell stocks. They can invest in mutual funds. They can send money to friends and family. They can buy travel insurance. The list goes on.
As you know, technology continues to evolve. As this committee has heard, for example, from a number of other organizations, we're now offering mobile banking services that allow Canadians to carry out a variety of day-to-day banking transactions through their smart phones. In the future, it was just recently announced, Canadians will also be able to use their bank authentication credentials to obtain access to online services provided by the Government of Canada.
This leads me to my second key point, and that's the critical factor of trust. Underpinning the banks' e-commerce experience is the single most valuable commodity for any online provider, and that is consumer trust: trust that their bank will keep their personal information and their financial resources safe; trust that the bank will deliver on its promises—deliver its product, deliver its services; and trust that the bank will provide them with a recourse mechanism and protection for consumers, should something go wrong along the way.
Research shows that Canadians—82% of them, in fact—are confident that banks continually update their technologies so online and electronic transactions are safe. And that confidence is justified. Since 1996, banks have invested more than $56 billion to ensure that the Canadian banking system is accessible, convenient, and secure—and those investments in security will continue.
My point is that ensuring robust security standards to protect customer information and to protect the integrity of payment transactions in effect must be “table stakes” for anyone who wants to accept or process customer payments. The question, of course, is how to get there.
We think that building mechanisms for secure digital ID and secure authentication is a key first step, and we know that useful work is already being undertaken in this area by the federal government.
I'd like to conclude with some comments about Canada's effective payments system, particularly payment cards. It's the 25 million consumers in Canada who drive our economy through their purchases. They rely on an efficient and effective payments system that's there for them 24/7. And they derive a great deal of benefit from that.
Consumers in Canada, for instance, have tremendous choice, with hundreds of institutions offering credit cards with a wide range of features that can fit every profile and every pocketbook. Many cards include rewards, and Canadians really value those rewards; they use them. Consumers also benefit from very high security standards, and if there's a problem, it gets fixed quickly and painlessly. You've heard it before at this committee, it's the zero-liability promise.
Consumers benefit, but let's not forget—as Diane was mentioning just a moment ago—so do businesses. For businesses, payment cards speed up the checkout line. Payments are virtually instantaneous, and they provide security of payment. Imagine if every payment transaction took an extra 30 seconds; it would use up an additional 27 million hours of staff time every year. Remember when businesses had to extend credit just to be able to get the sale? Or remember when the store manager had to come by and verify your ID so you could cash a cheque? You don't have to do that any more, because of the payment system we have.
Payment cards also enable online sales, and that helps expand business. Card payments also mean less cash on hand, and that means less cost of counting, handling, and making deposits. And it makes it considerably safer for employees. Consider the teenager working the midnight shift at a convenience store. People go after the cash; they don't go after credit card slips.
The payment system in Canada is very easy to take for granted because it works so well. It's critically important here that future public policy decisions continue to ensure that the efficiency, the resiliency, and the security of the payment system in Canada are not compromised, because the price we would all pay would be a significant and negative impact on the economy.
I would like to conclude just by saying that as this committee and as policy-makers consider the future of e-commerce in other sectors of the Canadian economy, we think some important lessons can be learned from our experience in the online banking world. We look forward to discussing these points and thank you very much for the opportunity of appearing.