Good afternoon.

My name is D'Arcy McDonald, and I'm the senior vice-president of retail payments and unsecured lending for Scotiabank. I'm pleased to participate in this important study and look forward to the discussion today.

Scotiabank has almost 200 years of history in supporting Canadians with their financial needs, employs 40,000 people in Canada and serves more than 11 million clients from coast to coast to coast. We take our role as an important pillar of the Canadian economy seriously. We're also a leading bank across North America, including a top ten foreign bank in the United States and the fifth largest bank in Mexico, with additional market-leading presence in the Caribbean and Latin America.

At Scotiabank, our credit card offerings are part of our overall portfolio of products and services available to both individuals and small businesses whose banking needs we serve everyday. Our array of credit cards provides secure payment mechanism, fraud detection, liability protections and, depending on the card, rewards for purchases. We are proud to provide cards that offer both consumers and merchants protection when they use a card for payment.

In addition, our cards help those with no or low credit to build their credit rating, helping them to then qualify for loans and mortgages and to make purchases for products where credit is critical.

Our goal at Scotiabank is to build relationships with our clients and ensure that they have the financial products they need and the products that work for their individual circumstances like credit cards, chequing accounts, investment accounts and/or mortgages. This is an important part of our overall strategy to act as the primary banking partner for our customers. Credit cards are often alongside other products and provide clear and substantial benefits.

Canadian consumers see credit cards as a secure and convenient tool to pay for everyday household purchases, travel and a range of other expenses. Scotiabank offers a variety of consumer and small business credit cards suitable for a variety of customers according to their interests and needs so that clients can select the best cards for their lifestyle. We work hard to ensure that the features, services and benefits, including rewards, reflect what our individual consumers and small business customers are looking for in credit cards.

We give customers choice. Examples of the choices we provide to our personal and small business customers include cards that offer low interest rates; cards that offer no or low annual fees; cards for students and new Canadians; cards for travellers with no foreign exchange and other benefits like insurance coverage; cards that offer cash back on purchases and cards that offer Scene+ points that can be redeemed for groceries, travel, gift cards or movies. This flexibility is a critical part of our commitment to ensuring that we provide the right cards to the right customers from both a business perspective but also from a risk perspective.

At Scotiabank, we pride ourselves on the close relationships we have with our small businesses. We work with them to understand their business banking needs and provide relevant advice, tools, products and services to help their businesses thrive. We offer cards that help small businesses manage their daily expenses, enabling them to separate personal and business expenses, which simplifies tax accounting and helps with spend management and cash flow prediction. I mention this to point out that our customers are savvy users, and they use these tools to access multiple benefits from their credit cards. Both our individual and our small business customers use credit cards as a payment tool rather than a credit vehicle if it works for them as appropriate and/or their business needs.

Finally, I want to speak about a topic that we know is top of mind for Canadians and for our credit card customers: fraud and cybersecurity. As we continue the rapid evolution to more digital platforms, it is more important than ever to have robust systems to ensure that payment systems and consumer data is secure. In Canada, fraud has increased since the pandemic. The increase in fraud has impacted our clients and had a significant cost to our businesses. Scotiabank vigorously invests to monitor and protect our customers and businesses from fraud. Each year we spend tens of millions of dollars specifically to manage credit card fraud from the moment someone applies for a new card to how it is used for transactions online and in person.

I'd like to close by emphasizing two points. First, credit cards are a secure form of payment that enable retailers to facilitate payments in real time without taking on credit risk. These payments happen seamlessly, both in store and online, because of investments made by the wider ecosystem as we innovate to provide better services. We do not take those benefits for granted.

Second, Scotiabank and Canadian banks more broadly are heavily regulated compared to other institutions in the wider credit card and payment ecosystem. Aside from the code of conduct, rules set by OSFI, the FCAC, the Competition Bureau and the Bank of Canada, we reinforce the security of our credit card businesses for consumers. When customers use a credit card by a licensed bank in Canada, they have important rights and responsibilities that are protected by those rules and regulations. At Scotiabank, we are proud of our credit cards that offer peace of mind to our customers from coast to coast to coast.

Thank you for your time today. I look forward to answering your questions.