State of Fair Banking 2020

February 4, 2021 | Article

Defining Fair Banking

Pursuing the mission of ‘Building banking that benefits all’ requires a working definition of what that type of banking looks like. It needs to go beyond a set of ‘customer promises’ and needs to articulate a definition of fairness that enables banking consumers to spot fair banking when they see it.

We believe fair banking is any financial product or service that lives up to the following set of principles:

• Pricing is clear, transparent, and well understood
• Pricing is representative of the cost of funds, cost of administration and risk, rather than what the market will bear
• It is clear to all parties how any personal data is being used by the lender
• Personal data is only used for purposes agreed to by both the borrower and lender
• The terms and conditions, including penalties and the rights of each party are clearly explained and well understood by both lender and borrower
• Products are only recommended that will bring the borrower closer to their expressed goals
• The borrower is clear on what the institution will do (and not do), with deposits to earn a return
• The assessment of risk is objective, transparent and not prejudicial
• Financial institution recommendations are not biased towards in-house product recommendations
• Products empower consumers when they need access to financial services, not just when they do not

Since we released the last report in 2019, much has happened. The COVID-19 pandemic has shocked the world and trailing with it came an economic recession we have not witnessed in nearly a century. Although the novel coronavirus does not discriminate, the infectious disease as well as the economic precarity of the pandemic is impacting individuals differently depending on their socioeconomic status. In the next few weeks, we will discuss the implications and the questions raised from the data and what the status of fair banking looks like today.

The first iteration of this study from 2019 will prove to be an important baseline to understand how the challenges of the public health crisis has rippled into the financial health and wellbeing of everyday Canadians through 2020 and beyond.

What you will see on this site in the weeks to come

The DUCA Impact Lab Fair Banking Study is a comprehensive document outlining the high-level trends we see emerging from the research. There are several stories and insights we felt were worth a deeper dive. We will be digging into the data a bit more with stand-alone commentary focused on different themes from the report. These will include:

1. COVID-19
2. Gender
3. Race
4. Sales Culture
5. Power/Trust
6. Financial Health

We invite you to take your time reading and reflecting on the data within the attached study for 2020. We hope you can return to this page within the next few weeks as we continue to discuss the impact of this year’s State of Fair Banking in Canada. In the meantime, we hope you have a chance to read the report.

-        The DUCA Impact Lab