Thank you, and good afternoon, Mr. Chair.

My name is James McPhedran. I'm responsible for Scotiabank's retail distribution network in Canada. In this role I lead the bank's regional and local branch managers and employees and oversee our branch network. I have been a Scotiabank employee since 1996.

I want to acknowledge at the outset that we clearly understand the importance of the issues before the committee. The hearing addresses foundational elements, most important being culture and leadership, and I will address both topics in my brief remarks today.

Let me start by providing you with some context on Scotiabank's operations in Canada. We first opened our doors in 1832, and today we have more than 34,000 employees in Canada, including more than 14,000 employees in approximately 1,000 retail branches. We have more than eight million domestic customers, and we annually process more than 400 million customer transactions.

To better support our employees and serve our customers, we also collect more than one million pieces of employee and customer feedback each year.

Since the focus of the hearing is sales practices, let me begin by addressing that topic directly. We engage with customers in a robust process that includes four key elements.

The first is training to ensure employees are well equipped to support customers.

Next, our customer experience model guides employees to assess customer needs and develop a financial strategy.

Third, we have a variety of feedback mechanisms to ensure we hear from employees and customers regularly.

Lastly, we monitor sales to ensure compliance with our practices.

Scotiabank branches operate such that all of our employees are focused on the needs of the customer. Our tellers do not have sales targets, and branch advisers provide customers balanced advice based on their needs. We monitor and enhance sales practices and processes on an ongoing basis to ensure we are meeting the needs of our customers, and we are confident that our practices are sound. Occasionally there will be times when we don't meet customer needs. When this happens, we want to know so that we can make things right.

I also would like to take a moment to speak more broadly about culture and trust. At the heart of our culture is a singular mission. Scotiabank was founded to help people achieve their financial goals. The values of integrity and respect have always been core to our culture. They guide our behaviour. They define us as Scotiabankers, and they form the basis for our code of conduct.

Our industry is undergoing rapid change driven by customer preferences that are altering how banking services are delivered. The nature of the relationship between banks and their customers is evolving. Of the more than 400 million annual day-to-day transactions I mentioned earlier, more than 80% now take place outside the branch, mostly through online and mobile channels. Our digital transformation is driving many benefits for customers, simplifying their banking experience and offering improved convenience, ultimately leading to higher satisfaction. The changes are also empowering for our people. Digital technology allows us to be more customer focused and to spend more time giving advice.

Advice is a foundation of our retail business and it is core to the value that we provide to customers. We also hear from employees that providing customers with advice, whether it's about purchasing their first home, setting up an RESP for a child, or planning for retirement, is a big part of what they enjoy about their jobs.

Through it all, the foundation of banking remains relationships, and the cornerstone of every relationship is trust. Regardless of how services are delivered, we have never taken this trust for granted.

We have received input from more than 700,000 customers in Canada so far this year, and our satisfaction levels are strong. In fact, the highest feedback scores consistently go to our front-line teams that our customers appreciate for their friendliness and responsive and attentive behaviour.

Let me close by saying that our people take their responsibility very seriously and that we are deeply proud of our team of Scotiabankers across this country. They embody the values of our organization, they work hard on behalf of our customers, and they do so with integrity.

Thank you for the opportunity to participate in this hearing. I hope I have been able to shed some light on Scotiabank's culture and leadership approach, and the strong and enduring values that guide our team every day.

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