Starting a financial institution in Canada.

Starting a bank, trust company or loan company in Canada.

It should come as no surprise that there are numerous regulatory requirements you must meet before opening a bank, trust company, or loan company in Canada. The good news is that the legislative “message” (as of late) from the Canadian government seems to be one that is encouraging an increase in the level of competition overall. This bodes well for those who wish to apply for a banking charter or be approved to open a trust company or loan company. Understand, however, that there has been no relaxing of the regulations. The Canadian government may be encouraging competition, but they are in no mood to place Canada’s world class financial system at risk.

Contact OSFI and SIT

If you’re serious about starting a bank, trust company or loan company, Strategic Information Technology (SIT) recommends that you contact both OSFI and SIT early in the process. OSFI will help you map out the regulatory steps you must take, while SIT can help educate you on the banking system and software you’ll require to achieve your goals.

Before contacting OSFI, you may also want to check out OSFI's Guide for Incorporating Banks and Federally Regulated Trust and Loan Companies.

Familiarize yourself with a few facts.

To get you started, take a moment to read some of our facts and information regarding the OSFI approval process:

  • OSFI (the Office of Superintendent of Financial Institutions) is responsible for administrating the granting of charters for banks, trust companies, and loan companies. OSFI acts according to a number of federal statutes, most namely the Bank Act and the Trust and Loan Companies Act.
  • You must meet the criteria of OSFI to commence the operation of a bank, trust company or loan company. Collectively, OSFI refers to all of these institutions as FRFI’s (Federally Regulated Financial Institutions).
  • All FRFI’s that will be taking deposits (including term deposits) will be required to become a member of the CDIC (Canada Deposit and Insurance Corporation). The only exception to this rule is for those institutions that will be taking on deposits greater than $150,000.
  • There is no option available for opting out of CDIC for loan or trust companies.
  • Applicants may also be required to join the CPA (Canadian Payments Association). For banks this is not an option. Trust companies and loan companies who want to accept transferable deposits can apply for membership in the CPA.
  • In addition to federal regulations, FRFI’s must seek out applicable provincial legislations that apply for the provinces in which the FRFI wants to do business.

Getting Started: A banking systems perspective.

Portfolio Plus, SIT’s flagship product, is in use by numerous large and small Canadian banks, trust companies, and loan companies. SIT is experienced in new (de novo) startups and as such can help accelerate your plans. Fortunately, the Plug-In BankingTM architecture of Portfolio Plus allows an institution to start with a minimal purchase of the components they need to commence business, and then grow according to their success. This approach works. We’ve proven it with large and small financial institutions alike.

Be ready to adapt.

It has been said that successful customers are the ultimate litmus test for any banking software system. SIT has plenty of successful customers. What SIT is most proud of, however, is that a number of our customers changed their strategies along the way. As such, they required new banking functionality. Portfolio Plus, with it’s Plug-In BankingTM architecture, allowed them to plug in new functionality when they needed to. It allowed them to adapt to a new strategy or opportunity.

Portfolio Plus includes modules for loans, term deposits, investments, retail banking, point-of-sale (POS), ATM, web banking, accounting, and more. Need to integrate with other banking systems? No problem. You can always utilize the advanced XML and messaging capabilities of Portfolio Plus to ensure you can bring your legacy systems into the future.


Questions?    We have answers.

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