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.
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.
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.
CEO, Tangerine Bank
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).
Vice President and Head of North American Digital Channels, Bank of Montreal
Senior Vice President and Chief Digital Officer, TD Bank Group
CEO and founder, Nest Wealth
Based on a survey of 544 respondents, across 46 countries this report assesses the rise of new technologies in the financial services sector, the potential impact of FinTech on market players and their attitudes regarding the latest technological developments. Additionally, if offers strategic responses to this ever-changing environment.
81% of Banking and Capital Markets CEOs see the pace of technological change as a threat to growth and believe that technology is the trend most likely to transform the expectations of customers, regulators and other key stakeholders over the next five years.
70% of financial services CEOs see the limited availability of skills as a threat to growth, making this a bigger concern than the disruptive shifts in consumer spending and behaviour and competition from new market entrants. Yet only 28% are changing their focus on the skills and adaptability of their people.