Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
BoC’s Carolyn Rogers Calls Banks an Oligopoly
Bank of Canada | Oct 14, 2025
Carolyn Rogers Says It's Time to Face How Concentration Hurts Innovation and Productivity
While almost everyone knows and/or has come to the same conclusion at one point or another, to hear the Bank of Canada's Senior Deputy Governor Carolyn Rogers deliver the same warning at the Canadian Club in Toronto on October 9, 2025, signals that perhaps the political critics against introducing more innovation and competition in the banking industry are going to have to acquiesce or Canada's economy and living standards will continue to crumble. The Bank of Canada's speech veers from the institutions usual restraint, which was published under the speech title, 'Productivity's competitive edge'.
See: How Competition Powers Canada’s Economic Growth
In short, Rogers said while Canada’s banking system remains stable, it is also highly concentrated, a structure now holding back innovation, competition, and national productivity. Below we break down some of the key and relevant quotes.
Select Quotes from Bank of Canada Speech
1. “It would also be hard to argue, on any objective measure, that Canada’s banking system is anything other than an oligopoly.”
Rogers’ statement cut through years of careful language. Six institutions dominate almost every part of the financial system. When a few players control access to credit, payments, and capital, competition (and thus productivity) slows. Oligopolist margins stay high not from efficiency but from market power.
Consumers face limited choice, and startups face unfair barriers that restrict their ability to grow.
See: CMA Lessons on Competition and Growth for Canada
Over time, and in the face of growing geopolitical risk, the impact of stagnation ripples across the economy as productivity weakens, innovation slows, and the cost of doing business is stubbornly high.
2. “The six largest banks collectively hold about 93 percent of all banking assets.”
It's immensely profitable for banks to scale without real competition. When a handful of banks dominate that are protected by the government, the incentive to innovate diminishes.
New entrants face steep obstacles that make entry prohibitively expensive. Customer mobility is low because switching banks is difficult, and incumbents have little reason to compete on service or cost.
This level of concentration kills inertia before it's had a chance to get off the ground. A sort of regulatory conservatism where policy focuses on maintaining stability instead of competition and encouraging growth.
It also contributes to the misallocation of capital, with funding often directed toward established low-risk assets instead of dynamic and productive new ventures.
3. “Many argue that this level of concentration has clear negative impacts on productivity, innovation, capital allocation, cost and consumer choice.”
The adverse impacts of this prolonged conservative approach is visible in every part of the financial system. Weakened competitive pressure keep fees high and innovation limited. Fintech firms and non banks are stifled by access restrictions and a lack of infrastructure sharing.
See: Canada’s Productivity Depends on Intangible Tech Adoption
The dominance of large incumbents has created a drag on productivity, discouraging foreign and domestic investment in innovative financial technologies and systems. Regulators, under constant lobbying pressure from powerful incumbent players, risk capture and caution.
Consumers end up paying more, while the wider economy suffers from slower capital formation and lower economic growth.
4. “Greater contestability, more new entrants and more innovation in our financial sector would lead to competition that’s good for consumers, for productivity and for our economy.”
Rogers' speech didn't stop at the problems. She pointed directly at the solutions that are actively in Canada's financial innovation pipeline that would open markets and increase contestability (read: competition).
Real Time Rail and open banking were designed to do just that. Both initiatives aim to make payments faster and more accessible while empowering consumers to use their data to get better services.
Yet both have been slowed by lack of political urgency. Every delay reinforces the oligopoly’s power and widens Canada’s productivity gap with other advanced economies.
5. “We should lean into it.”
Rogers closed by calling for action. Canada’s stability is valuable, but without competition, it becomes stagnation. Stability alone cannot deliver growth or innovation.
See: Canada’s Public Sector Costs and Productivity Gap | Top 15 Canadian Fintech blogs
The future depends on whether policymakers are willing to favour market openness, accountability, and the kind of innovation that allows new participants to compete on equal ground.
Implications and Takeaways
While Canada’s policymakers have inched towards open banking and Real Time Rails, political will remains uncertain. The government signalled intent in previous statements, and regulators have continued to prepare the technical frameworks.
However industry and fintech groups and business leaders need visible deadlines, transparent implementation plans, and strong data rights today, not years from now after already waiting half a decade.
But rhetoric could be changing into real momentum because Canada's back is up against the wall and success depends on whether political leaders, not only regulators, commit to timelines, accountability, and measurable progress.
See: Agentic AI in Banking From Pilots to Real Impact
The federal economic budget is due this fall, and if the statement lacks specific commitments, the oligopoly will remain untouched yet again. If it includes firm milestones, open access, and clear delivery dates, Canada could finally begin to modernize its financial infrastructure and restore productivity growth.
Why It Matters
By calling Canada’s banking system an oligopoly, the Bank of Canada directly linked banking concentration to productivity. Real Time Rails and open banking are are linchpins to unlock competition, expand consumer choice, and modernize how money moves. The National Crowdfunding and Fintech Association of Canada continues to advocate for more competition, access to capital, and policy frameworks that enable fintech innovation.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create aa vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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