Bill McFarland

CEO and Senior Partner
PwC Canada

Diane Kazarian

National Financial Services Leader
PwC Canada

@DianeKazarian

Our 2016 report on Canada’s banking sector finds Canada’s Big Six banks generating strong revenues and posting solid returns. They also improved their 2016 first quarter results in relation to last year—despite low economic growth and falling commodity prices.

As these headwinds affect the Canadian economy and banking sector, the banks are working hard to respond to a growing and potentially profound shift in he financial services world. A host of new players have emerged, eager to use financial technology—FinTech—solutions to disrupt the global banking industry.

Capitalizing on the latest mobile, cloud and digital technologies, FinTech startups are targeting the intersection of profit pools and customer pain points with innovative, easy-to-use and cost-efficient solutions. The Canadian banks are not standing still and are devising strategies and initiatives to innovate and embrace the FinTech movement.

In our report, we explore how banks are collaborating with FinTechs to bring new solutions to market and help create a vibrant environment that combines the financial stability of banks with a creative and entrepreneurial spirit.

Embracing the FinTech movement

As the FinTech-driven movement gains momentum, Canada’s banks are monitoring the evolution of this emerging ecosystem and actively pursuing opportunities to play an integral part in it. Banks recognize that they have much to gain from FinTechs’ innovations: soon, many FinTech driven offerings may become pivotal elements in banks’ operating models, enabling banks to reduce costs, reach underserved markets and open up new products and revenue streams.

To achieve this, a FinTech ecosystem needs to be embedded into the banks’ transformation strategies to drive change across the organization—people, processes and technologies. It will challenge banks to really understand where FinTechs are succeeding, and either prepare to collaborate and integrate them meaningfully, or compete. 

Read more about the FinTech ecosystem >

Components of the FinTech ecosystem

Act now but think long term
Think from the customer's perspective
Adopt new thinking aroung getting concepts to market
Invest in your future by investing in technology
Collaborate
Stay the course and don't slow down

A way forward

The FinTech movement is only going to gain momentum in the years to come, and Canada’s banks continue to take ownership of the reinvention of banking. Embracing FinTech isn’t a short-term play. It requires patience, discipline and a commitment to realizing long-term results.

See the six considerations that the financial services sector must consider when integrating FinTech in their strategy >

“It’s all about making things easy for our customers. That’s what drives the test about what technology choices we make.”

Peter Aceto
CEO, Tangerine Bank

Read more from Peter and watch his video >>

Snapshots of the Big Six

When compared to other banks globally, Canadian banks remain well regarded. For the eighth consecutive year the World Economic Forum has ranked Canada’s banks the soundest in the world1.

Here are some highlights for each of the Big Six Canadian banks from the past year (all data from each bank’s annual report).

1. “Canadian banks ranked world’s soundest for 8th straight year”. Business News Network. September 30, 2015. http://www.bnn.ca/News/2015/9/30/Canadian-banks-ranked-worlds-soundest-for-eighth-straight-year.aspx. Retrieved February 16, 2016. Here are some key data points from the performance each of the Big Six Canadian banks over the past year.
Canadian Banks BMO
Canadian Banks Scotiabank
Canadian Banks CIBC
Canadian Banks Naional Bank
Canadian Banks RBC
Canadian Banks TD

“The regulatory barrier scares people away. It shouldn’t. The regulators are open-minded and looking for partners to help them understand how to react to a world that is changing very quickly. It’s a great time to start a business in regulated industry.”

Mike Katchen,
CEO, WealthSimple

“[Digital] is no longer just technology or a cost centre...digital has now become a revenue generator and cost saver, a productivity play.”

Cesar Rainusso,
Vice President and Head of North American Digital Channels, Bank of Montreal

“Leadership has to accept that this is a cultural shift. It’s easy to hide behind legacy systems and archaic back-end systems. The reality is, it’s an opportunity. You either step up or step out.”

Rizwan Khalfan,
Senior Vice President and Chief Digital Officer, TD Bank Group

“Eighty percent of people at Nest Wealth have vast experience in the financial services industry. You really need to understand the distinction between starting a company in financial services and any other industry when it comes to using technology effectively.”

Randy Cass,
CEO and founder, Nest Wealth

Contacts

Diane Kazarian
National Financial Services Leader
Tel: +1 416 365 8228
Email
Jason Boggs
National Financial Services Consulting Leader
Tel: +1 416 941 8311
Email
Joel So
Partner
Tel: +1 416 687 8509
Email
Yair Weisblum
Partner
Tel: +1 416 814 5892
Email

#cdnbanks

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http://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2016/banking-and-capital-markets.html

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