In its recently published report on the Canadian banking
ecosystem, entitled "Canadian Banks 2016: Embracing the FinTech
Movement," PwC recommends Canadian banks do more to
embrace new financial technology, also known as FinTech,
innovations, or risk being left by the wayside. With an uncertain
economic environment looming in 2016, as unemployment climbs to a
two-year high, particularly in oil country, the report argues that
FinTech can help Canada's major banks maintain key aspects of
their value chain. Peter Aceto, CEO of Tangerine Bank and a former FinTech disrupter
himself, is quoted in the report as saying that "consumers are
demanding a different experience [and] they're expecting
experiences that simplify their lives, that make things
Aceto believes that the banking sector, particularly in Canada,
is facing a confluence of social and technological revolutions, in
that consumers are losing trust in traditional financial
corporations and are looking for new ways to bank. The quickly
growing number of smartphone users, as well as an increasing middle
class, continues to work in favour of emerging financial companies
that embrace FinTech models, the PwC report argues. Canadian banks
already appear to recognize this shift – which in and of
itself is a big change in the traditionally slow to adapt banking
In 2015, CIBC announced a partnership with MaRS to create a new corporate innovation hub,
which would join MaRS's new FinTech cluster. CIBC's Apple Watch App was created by CIBC
team members based at MaRS, where development was accelerated
through CIBC's ability to quickly prototype the watch with
business and tech teams working side by side, the announcement
states. Scotiabank has also invested in the FinTech space with an
investment in Kabbage, a U.S.-based online small business
lender. As well, TD has established an innovation lab at Communitech, an industry-led innovation centre
supporting a community of nearly 1,000 tech companies in the
Despite these early investments and partnerships, however, the
PwC report maintains that more still needs to happen. The report
emphasizes that, in this economy, the viability of big
banking's long term development is dependent on understanding
innovation and adapting accordingly. The report is adamant that big
banks' legacy systems and organizational structures will not
allow them to keep pace with today's rapid shifts in technology
and customer needs unless they truly take the plunge and embrace
FinTech innovations wholeheartedly.
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