The Office of the Superintendent of Financial Institutions (OSFI) is seeking to improve financial firms’ readiness for and resilience to risks ranging from hackers to high household debt loads.
The federal regulator released a new strategic plan on Thursday that sets out OSFI’s vision for the next several years (2019 to 2022).
The plan details OSFI’s main objectives, which include improving firms’ preparedness for and resilience to financial risks, and their ability to identify and handle non-financial risks (such as technology risks, cyber risks and conduct risks).
“Household debt, asset imbalances, extreme weather events and cyber-attacks are among the key risks to federally regulated financial institutions,” OSFI said in a statement.
Against that backdrop, it also noted that the Canadian financial sector has grown significantly since the financial crisis.
For instance, over the past five years, OSFI said deposits at the Big Six banks have increased by more than 50%, their international assets have grown by 67% and total assets at firms under OSFI oversight has grown by almost 40% to more than $7 trillion.
Additionally, the growth of fintech, industry fragmentation and the provision of financial services outside of OSFI oversight have also increased the system’s complexity, it noted.
“While Canada’s financial system has been stable, OSFI cannot be complacent and must be ever vigilant,” OSFI said.
The regulator said its latest strategic plan will be used as a “management tool” to keep it on track as the industry evolves and the risk environment develops too.
“The Canadian financial sector is constantly undergoing change. Our strategic plan charts a path for the future that builds on past achievements, while focusing us on future challenges so OSFI can continue to provide strong prudential regulation and supervision,” OSFI superintendent Jeremy Rudin said in a statement.