BCFSA CEO Signals Pivotal Moment for B.C.’s Credit Unions

• Industry Communications

7 October 2025

Credit unions in B.C. and across Canada are navigating a defining moment in cooperative finance, as its core strengths are being tested by an ever-changing provincial, national, and global landscape.

That was the message from Tolga Yalkin, CEO of BC Financial Services Authority, who spoke Monday at Central 1’s Momentum Conference, in Whistler, B.C. where financial services leaders met to discuss emerging challenges and new opportunities for the sector.

In his speech, Yalkin identified two credible structural pathways for the credit union sector that each offer opportunities to build resilience while staying true to cooperative values.

Read the full text of Yalkin’s speech below.

Speech | Tolga Yalkin, Oct. 6, 2025

Check against delivery.

I speak to you today at a moment of consequence for cooperative finance—not only in British Columbia, but across Canada.

For generations, credit unions have been a cornerstone of inclusive finance, offering community-based service, local governance, and member ownership.

They have been both economic engines and social anchors across this province and, indeed, across the country.

The cooperative model on which they are based continues to demonstrate real strengths — in purpose, community connection, and trust. But those strengths are being tested.

The environment is changing: technologically, economically, and demographically.

Membership growth has slowed. Market share in core products has declined. Technology capabilities vary widely. And shared infrastructure, once a defining strength of the cooperative model, has thinned.

Understandably, the system is asking itself hard questions: first and foremost among them, whether its structure still provides the basis from which to deliver on its purpose.

A global trend 

And it makes sense to be asking this, because globally and here in Canada, prudential authorities are confronting the same challenge.

How to help ensure that financial systems are built not only to withstand disruption, but to remain viable and relevant in the face of ongoing change.

That question sits at the heart of the Basel Committee on Banking Supervision’s 2024 update to its Core Principles for Effective Banking Supervision—the first substantive update since 2012, bringing structure and business-model sustainability squarely into the supervisory frame.

The update marks a quiet but meaningful shift in the way resilience is defined.

It moves beyond traditional measures of capital and liquidity to focus on whether institutions’ business models and structures are sustainable over time.

Three new priorities now define safety and soundness:

• Operational resilience – ensuring institutions can maintain critical services through disruption.
• Business-model sustainability – testing whether strategies and structures remain viable in a changing environment.
• Climate-related financial risk – recognizing that long-term stability requires adaptation to long-term shifts.

Together, these changes signal a broader philosophy: that resilience is not just about surviving shocks but about sustaining purpose and capacity over time.

In Canada, OSFI has been embedding these principles into its own regulatory framework, reflecting the same emphasis on operational resilience, technology risk, and sustainable business models.

This coherence between global standards and national practice underscores a shared evolution: a prudential approach that centres on resilience as a defining measure of sound oversight.

This resilience depends not only on prudent risk management, but the soundness of the structures through which it is exercised.

And that’s why, since stepping into this role, we’ve worked to create a deliberate, open conversation about the future of the system—not just about compliance or oversight, but about structure itself: how it enables resilience, supports confidence, and prepares the system for what lies ahead.

Two structural pathways 

Through those discussions, two credible structural pathways have emerged.

The first is consolidation — creating a smaller number of credit unions with the capacity to invest in shared systems, talent, and innovation.

This model allows for deeper capability: in technology, risk management, and strategic execution.

It can improve consistency of service and strengthen the collective ability to compete in a market dominated by scale.

But consolidation also requires disciplined integration and alignment of systems, processes, and cultures.

Without that discipline, efficiencies can be lost and integration costs can mount.

The credit unions that succeed will be those that manage cultural alignment, harmonize technology, and build unified approaches to risk and governance while maintaining the member connection that defines the cooperative model.

In short, consolidation offers the potential for structural strength, but it must be matched by careful integration and operational coherence.

A successful consolidation will be judged not only by its scale, but by how effectively it builds capability and coherence across what comes together.

The second is a federated provincial model, one that keeps credit unions independent, but binds them through shared infrastructure, services, and standards.

This model preserves diversity while creating collective capability.

It asks less of institutions in terms of merger, but more in terms of collaboration.

It requires strong coordination, aligned incentives, and governance frameworks that enable joint decision-making without diluting accountability.

Critically, federation depends on clear and strong central governance and risk management—capable of enforcing shared standards, coordinating strategy, and acting decisively when needed.

Without that central discipline, federation risks becoming a loose affiliation rather than a cohesive system.

Done well, it can create a structure that behaves like one organism when it matters—efficient, coordinated, and resilient—while retaining local ownership and voice.

Done poorly, it can weaken risk management and slow collective decision-making at the very moments when decisiveness is most needed.

Both pathways represent serious responses to systemic risk. 

Each can strengthen the system’s capacity to withstand disruption and invest for the future.

But neither path is sufficient on its own.

They are necessary but insufficient conditions for navigating the future effectively.

Managing risk within structure 

Structure sets the foundation, but resilience is determined in practice:

• by the strength of risk governance; 
• discipline in decision-making; and 
• the willingness to act early when vulnerabilities appear. 

That responsibility is shared.

BCFSA will continue to clarify expectations and test outcomes.

Each credit union will have to demonstrate, through its actions, that its governance, capital, and controls are commensurate to the risks it faces.

Structure provides the starting point, but resilience depends on what happens within it, on the discipline and quality of risk management that follows.

The opportunity before us is to build a system that proves its resilience—not by circumstance, but by design.

Thank you.