Key Trends and Shifts in OSFI’s Risk Outlook (2022-2026)

Abstract: As Canadian financial companies try to read the tea leaves on looming risks in 2025 – 26, it is informative to look back over the past five years. What are OSFI’s focuses each year and can we see any trends and shifts. While core concerns like cybersecurity, real estate lending, and credit risk have remained constant, the 2025-2026 report signals a significant escalation in AI-driven financial crime, cross-border liquidity risks, and regulatory oversight on governance and technology. Compared to previous years, OSFI has placed greater emphasis on foreign interference, digital vulnerabilities, and the rapid impact of macroeconomic volatility on financial stability. The ongoing commercial real estate downturn and rising mortgage renewal risks also remain key areas of focus. As OSFI tightens its regulatory stance, financial institutions must proactively enhance compliance, cyber resilience, and risk mitigation strategies to navigate an increasingly complex and uncertain landscape. Click here for key takeaways from the 2025 – 2026 Outlook.

Over the past five years, the Office of the Superintendent of Financial Institutions (OSFI) attempts to draft a risk outlook to address emerging threats and structural shifts in Canada’s financial system. While all Canadian financial companies are running a risk assessment on the uncertainty of 2025-2026, it is helpful to compare the report with previous years to see trends.

While some risks—such as cyber threats, real estate vulnerabilities, and credit risk—have remained constant, OSFI’s latest report signals a growing focus on AI-driven financial crime, cross-border liquidity stress, and governance reforms.

Risk Areas in OSFI’s Risk Outlooks from 2022 to 2025
(For mobile readers, please view this matrix in desktop mode.)

Summary of changes over the past 5 years in OSFI’s Risk Outlooks:

• Cybersecurity & Financial Crime: The focus on cyber risks and financial crimes has highened, particularly with the rise of AI-driven fraud and the need for enhanced anti-money laundering (AML) measures.​
• Real Estate & Mortgage Lending: Concerns continue regarding mortgage renewals at higher interest rates and vulnerabilities in the condo market, especially in urban hubs (Toronto, Vancouver, etc.).​
• Commercial Credit & Liquidity Risks: There is a continued emphasis on the “fragility” or vulnerability of corporate debt and the potential for liquidity stresses. Growing focus on macroeconomic stress scenarios.​
• Geopolitical & Macroeconomic Risks: OSFI has increasingly highlighted the implications of global instability and cross-border liquidity risks, indicating a trend towards more comprehensive systemic stress-testing.​
• Regulatory & Governance Changes: Finally, there is an understandable shift towards scrutiny on AI governance and updates to liquidity risk management frameworks.

Cybersecurity and financial crime are center stage in the assessment. While previous risk outlooks flagged digital innovation and cyber risk as areas of concern, the 2025-2026 report elevates AI-driven fraud, third-party vulnerabilities, and foreign interference to top-tier risks. OSFI warns that criminals and state-linked actors are becoming more sophisticated, leveraging AI and digital tools for money laundering, fraud, and cyber intrusions. As a result, financial institutions will face stricter anti-money laundering (AML) compliance expectations, enhanced cyber incident reporting requirements, and deeper scrutiny of third-party service providers.

Another persistent challenge is real estate lending and commercial credit risk. OSFI has consistently flagged vulnerabilities in mortgage lending and commercial real estate (CRE), but its latest report highlights renewal risks for borrowers facing higher interest rates and a weakening condo market. High-rise developments, particularly in cities like Toronto and Vancouver, are at risk of increased walkaways, which could put additional stress on lenders. At the same time, commercial real estate portfolios, especially office properties, are under pressure from high vacancy rates. Institutions with exposure to these markets should prepare for heightened regulatory scrutiny on risk concentration and credit portfolio management.

Geopolitical and macroeconomic risks have also become a growing area of concern. While liquidity and funding risks have been on OSFI’s radar for several years, the 2025-2026 ARO emphasizes cross-border liquidity risks and foreign currency exposures, particularly in an era of instantaneous capital flows and digital transactions. OSFI warns that while deposit markets remain stable, global uncertainty could cause sudden shifts in investor sentiment, requiring financial institutions to have robust contingency funding plans. Additionally, OSFI has signaled new regulatory initiatives, including AI governance guidelines, liquidity adequacy revisions, and updates to corporate governance frameworks.

For lenders operating in Canada, we see the need for proactive risk management and regulatory preparedness. Members should strengthen their cyber resilience strategies, reassess credit risk exposure, and enhance liquidity planning to navigate an increasingly volatile financial landscape. OSFI’s heightened focus on financial integrity, AML compliance, and AI governance means that lenders will need to adapt to evolving regulatory expectations, ensuring they remain compliant while capitalizing on emerging opportunities in the market.

Click here for key takeaways from the 2025 – 2026 Outlook

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