On 27 April 2017, I attended the Colloque Digital Banking event organised by Finance Montréal (Finance Montréal being of the main financial innovation clusters in the city, created in 2010 by financial institutions at the invitation of the Quebec government).
This one-day event focused on the future of Canadian banking and featured well-known speakers such as former Desjardins Group’s CEO Alban D’Amours, big data expert Dirk deRoos, and Cesar Rainusso (known for his extensive digital transformation experience in the banking sector). Here are my takeaways:
Banking innovation is nothing new
Alban D’Amours, who acted as keynote speaker, recognised that the use of the term “fintech” has exploded in the past five years. However, that doesn’t mean innovation in the banking sector had never existed prior to this. D’Amours reminisced about the 1960s when Desjardins was one of the first financial institutions in Canada to introduce automation in back-office activities, ensuring higher efficiency in operations reconciliation.
He concluded by saying fintech isn’t a fad, but rather a philosophy that continuously improves banking processes and frameworks.
Canadian fintech investment is lagging … yet catching up
A survey by the MaRS Discovery District in Toronto indicates that investment in Fintech technologies in Canada is expected to reach nearly $15bn by 2018. That’s a sharp increase from $12bn in 2013, yet a drop in the bucket if you consider worldwide investments of $345bn.
Such is a reminder that Canada is perhaps a growing force on the global fintech scene, but far from a powerhouse such as the UK.
Canadian bank branches continue to close
As expected, the number of Canadian bank branches is expected to shrink this year (based on a study by the Canadian Bankers Association, 45 branches have closed between 2014 and 2015). Despite online banking being the main way to perform banking activities for 55% of Canadians, this doesn’t mean personalisation is dead and gone. Au contraire: advancements in robo-advisors and chatbots will allow consumers to receive personalised services, yet continue to utilise the convenience of online banking.
Cesar Rainusso mentioned that the trend could accelerate even more due to a possible market consolidation between incumbent financial institutions and non-banks (mainly the tech giants of the world).
Internal tribalism is hurting banks
Dirk deRoos stated that “up to 80% of data isn’t shared across teams within financial institutions”. This is mainly due to “protect your own turf” mentalities and corporate silos, as data represents power.
The Internet of Things (IoT) could be a solution to combat these inefficiencies by allowing various departments to collect and share data internally, therefore fostering collaboration and creating new intra-partnerships. Challenges with such an approach include the vast amount of data IoT analytics produce, and the “talent gap” in such an area.
It was an interesting event in which many insightful points were raised. Banking in the “Great White North” is undergoing many changes, but is also exploring exciting opportunities.
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