Expanding the boundaries of its role and its involvement in public policy development, developing its own culture and engaging stakeholders are all on the list of items the Office of the Superintendent of Financial Institutions (OSFI) is focused on in the next three years, along with efforts to modernize its supervisory framework by April 2024, and modernize its data collection efforts going forward.

The regulator’s 2022-2025 Strategic Plan discusses the regulator’s plans to transform itself and outlines the actions it will take to contribute to the public’s confidence in the country’s financial system into the future.

Emerging risk 

“While OSFI has gained knowledge from past financial crises and bouts of financial volatility, the office must adapt to emerging risk facing the financial sector. This transformational strategic plan will position OSFI, in a deliberate and methodical manner, to respond to new and enduring risk. It will also help enhance OSFI’s ability to identify risk early, and to respond quickly and authoritatively to the most urgent issues facing the Canadian financial system,” the regulator states in its announcement about the publication of OSFI’s plan.

It adds that the plan is needed, as the institution’s role is becoming more visible to Canadians. “As our involvement in public policy matters intensifies, the strategic plan will help OSFI develop effective, fit for purpose, prudential responses to emerging and developing risk areas facing Canada’s financial system.” 

Data management and analytics 

The regulator, which oversees more than 400 financial institutions and 1,200 pension plans, says it will focus on its own culture, on risk, strategy and governance, stakeholder and partner engagement, policy innovation, its supervisory framework and data management and analytics (OSFI plans to become a leading data and analytics-driven regulator). “While it concentrates on our transformation, OSFI will not divert our focus from our core business activities,” says the regulator.

Building on its 2021 publication, Blueprint for OSFI’s Transformation 2022-2025, the strategic plan looks at each element, discusses where the organization is headed, its current initiatives, and describes what success will look like when the regulator has achieved it.

Risks are more complex and interrelated 

In particular, the report focuses on risk in particular, saying “it is evident that the risks we face are now more complex and interrelated than ever before. It is evident to us that volatility will arise from several identifiable sources,” says OSFI, citing climate change and digitalization as two key concerns. “Going forward, we can fully expect that uncertainty will (also) emerge from other, not yet identified sources.”

Among its other stated initiatives, the report states that it plans to establish a new “and empowered” transformation office. It then plans to establish an independent chief strategy and risk office, which will be well resourced, with a goal of helping the organization make risk-intelligent decisions that are delegated to those best positioned to make them. It plans to proactively influence policymaking, and explore the creation of an independent and external, board-type risk advisory council. Focus will also be on establishing a formal strategic stakeholder relations function, expanding stakeholder monitoring, and developing a stakeholder engagement plan that will address every strategic issue or risk.

Increased transparency 

The superintendent and the organization’s chief actuary are also slated for higher profile work, as the organization says it plans to increase opportunities for both to be more transparent with the public and with stakeholders. Finally, they say the organization plans to create an analytics advisory committee “in support of continuous improvement in our data and analytics capabilities.” 

“OSFI’s 2022-2025 Strategic Plan is the next step in our transformation. It not only sets out our goals and priorities for the next three years, it outlines the concrete actions we will take to ensure that we continue to contribute to confidence in Canada’s financial system,” says the report.