The news: Banks need to be more transparent about fees, according to a Friday report by the Financial Consumer Agency of Canada. 

The FCAC found that:

• Multiple charges, including foreign exchange and cross-border debit fees, often stack on one transaction, making the real cost hard to see. 
• Transfer-out fees act as a potential barrier to switching providers.
• And use-based fees are hard for customers to calculate.

Seventeen percent of Gen Z and millennial Canadians who bank with traditional institutions intend to switch their primary bank within the next year, per JD Power—the highest share in five years. Four of the five leading reasons for switching relate to product offerings, including fees, rates, and promotions.

It’s also getting easier to switch: Canada is developing an open banking framework that would let consumers securely share their financial data with competing providers. The framework is expected to roll out in phases through 2027.

Smaller institutions already have an advantage in customer satisfaction. Midsize Canadian banks scored 641 out of 1,000 in JD Power's 2026 study, compared with 610 for the Big Five. Digital-first Tangerine, which offers no-fee accounts, ranked highest overall with a score of 676.

Implications for banks: For traditional banks, customer acquisition and retention in the age of agentic AI and open banking will go beyond simplifying fee disclosures. 

As consumers gain more ways to compare alternatives, banks will face greater pressure to justify what customers are paying for. That's particularly important given 26% of traditional bank customers in Canada don't know what benefits their checking accounts provide, per JD Power.

Banks that fail to communicate their value risk making price the deciding factor. Transparent pricing, personalized fee information, and clearer explanations of account benefits can help incumbents defend customer relationships. But banks charging higher fees will also need to ensure their products and services deliver enough value to justify the difference, particularly as digital-first competitors make lower-cost alternatives easier to discover.

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