For this report, PwC Canada collaborated with our global network to capture the real world implications of technological advances on the Financial Services industry. We found that the ten key drivers and six priorities ring true globally for 2020. In addition, the unique dynamics within different countries will drive emphasis and timing prioritization for certain areas.
For Canada, our Financial Services landscape is uniquely defined by our small number of large banks, the economic role of small businesses, strong regulation, and collaborative innovation:
- Small number of large banks, with a high level of penetration across the entire spectrum of products and services, driving greater collaboration and consensus
- High number of small and medium-sized businesses that are increasingly competitive, diverse and embracing technology, representing a significant innovation opportunity for banks
- A prudent and robust regulatory authority that provides a stable environment enabling the sector to evolve into a growth platform
- Presence of emerging and established FinTech incubators that are in close proximity to each other, driving stronger co-creation opportunities and activity
With an emphasis on ecosystem collaboration, technology will play a key role and enabler in the ‘new normal’. This means technology priorities for Canadian banks should be:
- Implementing architectural and integration technologies that enable collaboration and co-creation.
Market pressures have intensified banks’ desire to partner with third-parties to provide a positive customer experience in a cost effective and timely manner. Banks can address these challenges by evolving their technology architecture, making it more agile and allowing for richer user experiences and product innovation.
- Modernizing the core, opening APIs and increasing system agility to respond to new innovation.
Banks continue to evolve and innovate in their response to FinTech activity. Application programming interfaces (APIs) and modernizing core banking systems have become important elements of banks’ strategies—enabling them to embrace, work with, and in some cases, build their own disruptive FinTech.
- Capitalizing on opportunities to get ahead of emerging technologies like Blockchain, Artificial Intelligence and Robotics.
Given Canada’s collaborative environment and focus on incubating innovation, investments in these emerging technologies will be amplified and likely move to commercialization sooner. Past examples of Canada’s early commercialization of new technologies include national roll out of P2P payments, full penetration of EMV Chip Technology and near-field-communications (NFC) terminals and bringing to market fully digital, branchless banks.