Episode 38: Keeping your money safe

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Transcript of the recording

Elizabeth (Liz) Dempsey:
Hello everyone and welcome to a very special episode of the Pay Pod. I'm Liz Dempsey, the manager of event strategy and engagement at Payments Canada, and today I'm joined by not only our Chief information officer, Shawn Van Ray, but CDIC's newly named Chief Executive Officer Gina Byrne. Welcome to you both and Gina, congratulations on such a well-deserved appointment.

Gina Byrne:
Thank you Liz. It's really great to be here.

Shawn Van Raay:
Congratulations Gina. Looking forward to our conversation today.

Liz Dempsey:
November is financial literacy month and I think we can all agree there is no better topic to discuss than keeping your money safe. Each of your organizations — CDIC and Payments Canada — play a critical role in ensuring that the money we keep in Canada's financial institutions is both protected and can also be sent and received safely. But the funny thing is, I bet a lot of Canadians take what each of your organizations do as a given and don't really understand what it takes to safeguard our money every day.

Let's change that right now and get into questions. This is a get to know you question. Gina, can you tell us about CDIC's role in Canada's financial ecosystem? Then Shawn, what does a day in the life of the CIO of Payments Canada look like?

Gina Byrne:
Sure, thanks Liz. So CDIC is a federal crown corporation, which means we're accountable to Parliament through the Minister of Finance and National Revenue, where we operate at arm's length from the federal government. 

For listeners who aren't familiar with us, CDIC ensures your deposits up to $100.000.00 per deposit category, per member, if one of our member institutions fails. We do this by acting as a resolution authority and by supporting the stability of Canada's financial system. We currently have 84 members, including most banks and some federally regulated credit unions and trust and loan companies. We don't use any tax dollars to operate as we are fully funded by the premiums paid by our members. Those premiums go into a deposit insurance fund that's invested and it's used to reimburse insured deposits, or support resolution if a member fails.

One important thing to note is that people don't need to sign up for CDIC protection. It's actually free and automatic when they place a deposit with one of our members. To describe our role in the financial ecosystem, it's really helpful to focus on what I'd say are two key elements of CDIC's work: resolution preparedness and public awareness. CDIC is Canada's resolution authority, which means we're responsible for handling the failure of our members.

Between 1967 and 1996, CDIC successfully managed 43 bank failures, affecting some two million depositors. We haven't had a bank failure since then, so it's been nearly 30 years, but if hypothetically, one of our members failed tomorrow, CDIC would step in to make sure depositors have continued access to their insured funds and that financial stability is maintained. Depending on the scenario, we can assist or force the sale of a troubled member, provide direct financial assistance or create a bridge bank to keep operations going until a buyer can be found. If the financial institution closes, we can promptly reimburse people for their insured money.

The second element of our work that I think is really interesting is our public awareness campaigns. We leverage traditional, digital and social media as well as partner with social media influencers and sports organizations to increase people's awareness of CDIC and federal deposit insurance. We do this because research shows that public awareness of deposit protection can reduce the risk of bank runs by nearly 50 per cent. Bank runs by definition happen quickly.
Let's say Shawn gets wind there’s a risk, pulls his money from the bank, he calls you Liz, and you panic and you withdraw your money. Liz tells her family, they tell others, word spreads on social media. Within a day or two, everyone pulls their savings and the bank has failed. What we know is that the risk of this happening is significantly reduced when people know that their money is insured by CDIC. Our own research also shows that people who are aware of CDIC are more confident in Canada’s banking system and more likely to purchase products from a CDIC member.

So these two elements, the preparedness and public awareness, are really mutually reinforcing, and your listeners may have seen our ads featuring CDIC as an everyday hero, barely catching people's wallets, midair. It's a visual metaphor for our role as a quiet guardian of people's savings, working in the background, but ready to step in when needed. Ultimately our message is if a bank fails, don't worry, we got you.

Liz Dempsey:
I have seen those ads, they’re very effective! And Shawn, turning to you, what does a day in the life of the CIO of Payments Canada look like?

Shawn Van Raay:
Well thanks Liz, and again, it's great to be here. I think I'll take a cue as well from Gina and just describe a little bit about our organization. We are a public purpose utility organization and we exist as a nonprofit organization under the Canadian Payments Act. And what we do is we clear and settle all the financial transactions between the financial institutions in Canada.

So we are, again, we don't take any taxpayer money, we are funded by our members' transactions and like Gina, no one needs to sign up for our services. We are part of the banking ecosystem providing safety and security for financial transactions in Canada. Our job is to make sure that we are working behind the scenes and ensuring the safety and soundness of the financial market within Canada.

That includes, in 2024 for example, we cleared and settled over $107 trillion. That's nearly $424 billion each and every business day. So the impact and the significance of the work we do for the stability of Canadians is material. 

Think of the payments that go to sell your mortgage, the payments that go between provinces, the payments that support oil companies, things of that nature. These are all high value payments that really drive our economy. So for us at Payments Canada, it's really important for us to make sure that we have a safe, secure, stable, and reliable ecosystem that Canadians ultimately don't need to hear about and really can just trust that the money is moving between institutions.

We operate primarily two key systems today. One is Lynx, and Lynx is our high value system. So many of you may have heard the term wire, from sending a wire, which is a large value transfer, something maybe to do a house again, something to do a large down payment, maybe you're buying a car. If you're fortunate enough, given Gina thinks I have a lot of money, maybe I'm buying a car by cash, and using a wire to do so. But that gives me an opportunity to move money securely and stably within Canada using the high value payment system we call Lynx.

We also run what's called ACSS, which is our automated clearing settlement system, ultimately the batch system, and this creates batch payment settlement between institutions. So think of this as your payroll, your bill payments, the everyday transactions that you do that need to go from bank to bank to make sure that you are paid or your bills are paid or you're moving money between friends at smaller amounts. Again, we settle all the transactions between these systems, and soon we will do all the clearing and settlement for the RTR, which is the Real-Time Rail.

So coming in the near, very near future will be an opportunity for Canadians to move money from account to account instantly based on a trusted and reliable system. So as we build that, we too will operate the clearing and settlement for that function. So a day in my life is quiet, hopefully, it's behind the scenes and it's stable, safe and secure.

Liz Dempsey:
Great, thank you Shawn. And building on that, I can already see the similarities between CDIC and Payments Canada. So let's talk a little bit about how each organization compliments the other. Gina, let's start with you.

Gina Byrne:
Yeah, it's a great question Liz. And in prepping for this podcast, I was trying to think of ways I could describe Payments Canada and CDIC's relationship, and the analogy that came to mind was something like city infrastructure. So I think of Payments Canada like the city's utility grid, the system of roads, water pipes, power lines, it connects to every building, it makes sure money like electricity and water flows smoothly between the homes, the stores, the office towers and the banks. And even if one building goes down, the utility grid needs to stay fully operational so the rest of the city keeps running.

CDICs role, it's a little bit different. If a building, say a bank, catches fire or collapses, CDIC is like the emergency response team, we make sure everyone inside — our depositors — gets out safely with their belongings, which would be their insured deposits. We cover the damages up to a certain limit so no one loses their life savings.

And as a resolution authority, we're also sort of like a city's demolition and reconstruction team. If a building becomes structurally unsafe, we step in early to stabilize it or take it down in a controlled way so it doesn't topple into neighboring buildings and wreck the whole block. So while CDIC protects the people inside the building and handles the controlled demolition, Payments Canada ensures the rest of the city stays connected and that the essential services, the movement of money never stops.

The work we do, it's so behind the scenes that it can be taken for granted. I mean we've already talked about this, but in fact we really want our work to be so seamless, people don't even feel it.

Even payments, for example, when the system's working, it's practically invisible. It's the moment when a bank fails or worse, the system stops working, that people start to worry. That's also the moment when the curtains really pull back and both of our organizations come under the spotlight. So both of our roles are key to a functioning economy, but in different ways. A robust payment system ensures that money moves, while a strong deposit insurance framework supports the health and stability of Canada’s financial system. But I'd say we have to keep in mind nothing's ever static. For us, digital innovation, including AI-driven financial tools, they're rapidly changing the way depositors carry out their transactions and manage their money. And because of these factors, CDIC is really making sure it must be agile and constantly adapt to evolving needs.

Liz Dempsey: 
Great. And Shawn?

Shawn Van Raay:
Sure. I think I love the analogy, Gina, of the infrastructure. Really we do want to make sure that we are flowing and providing services, not indifferent than the way you expect the lights to turn on when you hit the switch, the tap the water runs when you turn the tap on and that it's never a worry or a reason to understand why that happens behind the scenes and that's our job. So I think you've hit the nail on the head.

One of the other, I think, analogies that’s interesting, one of the key roles for us is not only the movement of money, but also the setting up and establishment of by-laws and rules between the banks and how they are obligated to make sure that they are solid between each other. So prior to a bank, or in the hypothetical case of a bank failing, what we want to make sure of is that the entire ecosystem is secure. And so what we don't provide necessarily insurance, what we do provide is our financial risk frameworks to make sure that in the event that institution does become in trouble, that it's not systemic to other institutions in Canada and that there's enough collateral and coverage for other institutions and that money moves, we don't create systemic risk across our entire ecosystem.

So in the case of you've got the building that's on fire and you're doing the rescue or potentially demolition — I thought that was a fantastic analogy — our job is to make sure that that doesn't necessarily catch to the next building.
So we're providing the insulation to make sure the next building doesn't catch on fire or it doesn't spread beyond that one institution. And so we establish a very comprehensive, and to your point, an evolving set of by-laws and rules that recognize the changing nature of payments.

So payments aren't static, the way we expect, as consumers and as businesses, to interact with each other, the nature of money movement has changed and continues to change. Again, whether it's AI or whether it's just different types of digital asset controls and digital asset money movement. As those change, it's incumbent upon us to make sure that we're recognizing the financial risk of those, recognizing the impact it can have on consumers and on the business alike. And so we constantly look at our financial risk frameworks, our by-laws, our rules to make sure that we are again, seamlessly providing the right protection, safety, and soundness for our members and ultimately for Canadians.

The other evolving piece that we continue to explore is our membership changes. The number of players in the payment ecosystem continues to change. And I think, again, if I might leverage your analogy even further, we can think of the big banks in Canada, the large institutions that we all deal with day to day as office towers, as the 25 foot stories that might need rescuing, saving. But the reality is today, if we think of that analogy, there are many new fintechs and paytechs who are joining our ecosystem and we need to make sure that as they join our system and as they join and participate in our economy, they're doing so in a safe, secure, and predictable manner. And that as they push the envelope of what, as consumers, we can expect and demand, that we can all still rely on the safety and soundness and structure of the underpinning utility behind them.

So as we see in the Retail Payments Activities Act, the updated Canadian Payments Act, it's important for us to really make sure that we are evolving our rules and we're being very diligent in applying our safety, security and financial risk frameworks around those entities so Canadians can trust those, no different than the way they trust their large institutions today. So I think the other thing that we keep an eye on very closely is the evolving nature of our membership. And so as we think about that city analogy and where we have large institutions represented by office towers, we are seeing an ecosystem of paytechs and fintechs, which would be represented by smaller buildings and smaller players. And it's our job as we see and open the doors through the Retail Payments Activities Act and the changes to the CP Act, Canadian Payments Act, so as we allow more members to participate into our economy, that we create the same safety structural soundness that we have for the large institutions.

And so we are extremely diligent in making sure that we're applying the right rules, the right frameworks, and the right coverage for Canadians for all types of financial transactions.

Liz Dempsey:
Great, thank you Shawn. And I'm feeling that my money is very safe, but I have to get doomsday here. What plans do each of you have in place to respond to a crisis, Gina, in your case, a bank failure, and Shawn, in yours, a system?

Gina Byrne:
Thanks, I love this question. Liz. Crisis preparedness, it's really CDIC’s specialty. We're constantly thinking about doomsday scenarios, so depositors don't have to. In the first few decades, two decades I'd say, of CDIC's existence, we were essentially what's known as a pay box that acted only once a bank has failed and was closed.

Preventative action, which may have provided a less costly solution in some cases hadn't really been part of our toolbox, but that all changed following a series of bank failures in the mid eighties. We were given a stronger mandate that also granted us stronger powers. Today we can do more than just shutter an institution and pay out deposits. We can support the sale of shares or assets and amalgamation with another institution, recapitalization or other private sector solutions.

CDIC also has the ability to conduct what we call special examinations of our members. These exams increase our level of preparedness, helping us identify the best resolution tool to apply in any given crisis while estimating our potential loss exposure. There are a lot of factors that go into a resolution tool we apply in a crisis, like the size and complexity of the bank, even the availability of private sector solutions. In the case of Canada's six largest banks, also known as domestic systemically important banks or DCIBs, CDIC's resolution planning by-law requires that they develop and maintain their own plans in the event that there’s a failure. This is crucial since the big six offer a range of financial services critical to the stability of the Canadian economy and the financial system.

It's a different story for our small and medium, medium-sized banks. CDIC actually develops their resolution plans in-house here. The extent and frequency at which we do this is driven by the size, complexity, and risk profile of our member.

So if that time comes, how will we perform? How confident are we that we can deliver?

Well, we spend a lot of time training and preparing for crisis. It's what we do. In the absence of bank failures, we conduct crisis simulations and other testing exercises through our simulation center of excellence. We do several exercises a year with internal and sometimes external stakeholders. The simulations allow us to test our tools and decision making in response to a wide range of crisis scenarios. It's really a unique opportunity to sit in the hot seat, but in a safe and controlled environment. The fact is we can't control if or even how a bank fails, but what we can do is make sure we're ready to respond when it does.

Liz Dempsey: 
Great, thank you Gina and Shawn?

Shawn Van Raay:
I think there's a lot of overlap and certainly for us we are as diligent making sure that we're exercising our crisis management and our disaster recovery. We work with our members, with our partners, with our industry, with our regulators to make sure that in the event that we have a system issue, whether it's an operational issue or whether heaven forbid it a cyber issue, that we've got a very coordinated and thorough plan to address and communicate how that would impact potentially Canadians and the institutions that they use.

I think the other thing that's important for us to recognize is ultimately we move, in addition to all the rules and by-laws and the work that we do to support that, ultimately as we move money, that's a technology operation. And so our focus really is making sure that we have the strongest, most stable and secure environment that we can to support that. And while we take reference and we take guidance from certainly the industry and the work we do domestically in our institutions, we also look globally.

We make sure we evaluate the work that other central banks are doing, whether it's in the United States, whether it's in Europe or whether it's anywhere around the world, and understand that the role that they play and how they address security, how they address availability, how they address operational stability really are things that we can learn from and we share that.

So our opportunities that we have when we do have an incident, whether it's small, our opportunities for us to share with other global banks, central banks, so they can prove their system to be more resilient because at the end of day, our economy, although it's Canadian, is part of a larger global economy and when we rise, the entire economy rises. And so it's incumbent upon us to learn from our counterparts abroad and also to make sure that we contribute to the global economy to make sure that our environment is stable and supported in contributing.

Liz Dempsey:
Thank you so much for that, Shawn. So this isn't guesswork here. Each of you have extensive experience in protecting Canadians and it's backed by research. Can each of you talk about the kind of research you conduct each year and how you ensure it stays relevant?

Gina Byrne:
Thanks, Liz, happy to speak to this one. CDIC routinely conducts surveys, studies and focus groups to ensure that the public is confident in the safety of their deposits and that our tools are fit for purpose. Our public awareness strategy, which is entirely evidence-based, is a great example.

Our goal is to maintain general public awareness of CDIC and federal deposit insurance between 60 and 65 per cent. For women, we target between 55 and 60 per cent. I'm really happy to report that we hit record levels for both groups this year. General public awareness is currently at 69 per cent, and for the first time ever, awareness for women is at 61 per cent, and that's all I'd say on the backdrop of not having a failure in 30 years, so it's an amazing accomplishment for us.
We also do quarterly awareness surveys to make sure we're hitting our targets and to measure things like people's confidence in the financial system and where they consume information about CDIC. And every year we re-evaluate our key performance indicators to keep our strategy on track and adjust our media activities. We also regularly test our crisis communications messaging and approaches in a failure situation.

Earlier this year, we conducted focus groups across Canada to get a deeper understanding of what depositors want to hear from, whom, when and how during a bank failure. We presented the participants with a range of hypothetical failure scenarios and we asked them to provide their initial reaction to CDIC's involvement and messaging. One of our key findings was that CDIC's public presence is often seen as critical in a failure; impacted depositors wanted a steady stream of clear information on multiple channels.

We followed this up in July with a depositor expectation study that focused specifically on a scenario where a bank was closed and CDIC was reimbursing depositors. The study looked at how soon people expected their money, how they wanted to hear from us and how they wanted to receive their payment. Interestingly, 51 per cent of respondents like the idea of receiving a cheque in the mail, even if it would take six to nine business days.

The final thing I thought I'd mention is our research on depositor trends. In 2024, we wrapped up a deposit insurance study to see if our current deposit insurance framework really adequately still protects depositors and supports financial stability. We've had a $100,000 coverage limit since 2005, and with the rise in uninsured deposits, it was the right time to look at this. What we found was reassuring: the framework is strong, but there are certain groups that could benefit from more protection.

What we did is we shared our findings with the Department of Finance, and in August, they launched a review of the federal deposit insurance framework. CDIC welcomes the opportunity to modernize the framework so it matches today's realities and evolving depositor needs. Of course, any changes would be under the authority of the Minister of Finance and National Revenue.

Liz Dempsey:
Great, thank you Gina and Shawn?

Shawn Van Raay:
I think research is a big part of our organization, both from understanding how we support our institutions, how we make sure we are meeting our regulatory obligations and ultimately understanding the trends of Canadians at large. To that end, we do produce a report called the Canadian Payments Methods and Trends report, and I think it's a fascinating read.
There are a few interesting pieces I think I'll just share with you just to highlight how that might influence some of the work that we do. In 2024, for example, e-commerce transactions totalled 77 billion, and while that seems like a lot, it's just six per cent of all retail sales.

So while we're still feeling a material impact on, a material part of our day on e-commerce, six per cent of all retail sales. 13 per cent of Canadians are using smart home devices or social media purchases, each and every month. Twenty-eight per cent find AI generated online shopping part of the new trend and as part of our new experience online, and to that end, 64 per cent of businesses are exploring some form of agentic AI.

So think of the day coming, with chat GPT, will be able to find your train ticket and then book your train ticket for you. So we're seeing a very changing trend in the economy and how Canadians are choosing to pay on a day-to-day basis. Equally interesting, however, for us is the concept of fraud. And as we change the payment behaviour of Canadians and the frequency and speed with which we pay, our openness and our exposure to fraud changes dramatically.

Canadians are three times more likely to encounter fraud using cash versus credit cards. So despite what we might think, our cash actually becomes a bigger weapon for us for fraudsters than their credit cards. Thirteen per cent of all Canadians experienced some form of fraud in a six month period in 2025. That's a substantial amount. What's more concerning is 25 per cent of newcomers have experienced some form of fraud in the same period of time. So we're seeing a higher disproportional percent in newcomers there.

And while fraud might seem like something that affects other people, the reality is one in four Canadians risk missing bill payments due to scam fears. This might be us ignoring an email or a text that might be legitimate, but ultimately our antenna is up because we are worried about fraud.

So for us, as we at Payments Canada build Real-Time Rail systems and enhance our high value systems, continue to evolve our batch systems, it's important for us to make sure that we are recognizing the risks and the concerns Canadians have regarding fraud. And the research helps us to support that.

Liz Dempsey:
So let me ask you this last question, in recognition of financial literacy month: how educated and informed do each of you feel Canadians are about understanding the financial landscape, and what advice would you give our listeners to protect themselves?

Gina Byrne:
Great. So as I mentioned earlier, people in Canada, they have a strong awareness of CDIC and federal deposit insurance. We were even able to exceed our awareness targets for women this year. Although awareness among young women is still lagging, this is work for us that is never one and done, it requires ongoing visibility and engagement. Busy periods like financial literacy month are key opportunities to spread awareness of CDIC and deposit insurance.

Every November we ramp up our market presence and activities. This includes our collaborations with influencers, promotion of online financial literacy hub and training, game and partnerships with the Canadian Football League and the Canadian Hockey League, both of which have a huge female fan base. My one piece of advice to listeners is know what's protected and know where your money is held. Not all products are insured. For example, mutual funds, stocks and bonds and cryptocurrency are not covered by CDIC. And not all financial institutions are CDIC members.

A few minutes on cdic.ca can tell you exactly which of your deposits are covered. A great visual clue is CD's Purple Lock logo, look for it on your financial institution's doors, ATMs, and mobile banking apps. Once you see it, you'll notice it everywhere. Financial literacy isn't about knowing everything, it's about knowing where to get trusted information and when it comes to protecting your savings, CDIC's website is really the best place to start.

Shawn Van Raay:
I think Canadians generally are very curious about payments and I think they're very open to trying new types of payments and new forms of payments. We see we had one of the fastest adoptions of tap in the world, one of the first countries to really adopt the chip and pin. So our country as a whole, historically, has been very eager to adopt new technologies and new payment methods and trends.

And so I think that Canadians, as they are curious, they explore and they understand what the ramifications and what the opportunities are. I think with that, however, the advice I would give is to make sure that we don't take our eyes off fraud, that we continue to talk about fraud. And I think that we continue to be open about fraud either when we've been victims or when we know about victims.

One of the most concerning stats around fraud globally is the amount of unreported, and so when we think about what's called authorized push payment, you'll hear sometimes APP or app scams, and these are things you'll be familiar with like romance scams or I've got a king in Jordan, wants $25 million. These types of email scams. The reality is they can often be embarrassing if we fall and prey to them, whether romance or other.

What's important is that we are open and honest and recognize that we're all vulnerable to these things no matter what walk of life we're in, no matter who we are. And so it's important for us to continue to be open and frank about our money, whether it's our vulnerability, our experience in fraud, how we choose to use money, our experiences in changing technologies, our experiences with agentic payments, as we continue to share with each other, with our institutions, with our regulators, and with our legislators and with our governing bodies. It helps them to shape the policies and the rules that will make us all safer and continue to foster innovation in Canada.

So my advice is think about money very, very carefully. Think about the fraud and the opportunities to secure your money and be open to talking about it with your family and friends.

Liz Dempsey:
Thank you both so much for such a great talk today. I thought my money was safe before, now I'm certain.

Shawn Van Raay:
Thank you very much, Liz and Gina, I had a real blast talking to you today. This is a topic I'm passionate about and really appreciate your time today.

Gina Byrne:
Thanks Liz, and thanks Shawn. It was really great to be on today and I agree we learned a lot of new information and I feel very safe about my money.

Liz Dempsey:
And just before we go, please also go to our website, payments.ca. to sign up for our newsletters so you'll never miss new developments and trends in payments, and of course, what we'll be talking about at The SUMMIT, our annual payment conference happening in May, 2026. To our listeners, thank you for joining us and thank you for your interest in payments.