FCAC mystery shopping report shows banks need to do more
May 27, 2022
Global Korean Post
The Financial Consumer Agency of Canada (FCAC) released the results of a mystery shopping exercise conducted at Canada’s 6 largest banks.
FCAC protects financial consumers by supervising the compliance of federally regulated financial entities, such as banks, with their legislative obligations, codes of conduct and public commitments, and by strengthening the financial literacy of Canadians. As part of its mandate, FCAC regularly examines industry practices that impact consumers of financial products and services.
FCAC’s mystery shopping exercise took place between October and December 2019. The main objective was to better understand how front-line bank employees sell financial products and services and how consumers experience the sales process.
The mystery shopping exercise followed FCAC’s 2018 Domestic Bank Retail Sales Practices Review, which found that a sharp focus on sales was increasing the risk of banks placing sales ahead of the interests of customers.
A total of 712 different shops were conducted at Canada’s 6 largest banks: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank.
74% of shoppers described their overall experience as positive. However, even though they still rated their experience as positive, 32% of chequing account shoppers and 45% of credit card shoppers reported that bank employees recommended an inappropriate product.
Banks involved in the exercise will be provided information on their individual performance. FCAC will continue to monitor these important areas for improvement through its ongoing supervision of banks.
Mystery shopping is a form of consumer market research where individuals pose as customers and use semi-scripted scenarios to interact with employees (in this case, at bank branches). The shoppers are trained to record their observations about their encounters objectively, providing qualitative and quantitative data.
