According to PwC’s recently released “Canadian Banks 2016: Embracing the FinTech movement” report, Canadian banks are laser-focused on responding to the threats and opportunities posed to the banking industry, at the hands of a group of new companies building financial technology solutions.
In some cases, FinTechs will be viewed as enablers to traditional innovation and continuous improvement. In others, it presents a series of disruptions and threats as they continue to make inroads into banks’ traditional territory by offering a competitive service or products.
For Canadian banks, embracing FinTech isn’t a short-term play. Here are six considerations that the financial services sector must consider when integrating FinTech in their strategy:
- Act now—but think long term. It’s time for the financial services sector to establish a clear, long-term FinTech strategy that not only allows for disruption, but embraces it.
- Think from the customer’s perspective. Gen X and Gen Y will assume more significant roles in the global economy over the next decade and millennials are bringing radical shifts to consumer behaviour and expectations. It’s vital that banks look at their own products and services from a customer’s perspective to better understand the points of friction.
- Adopt new thinking around getting concepts to market. The financial services sector should strive to emulate the start-up model and culture to attract talent and rapidly develop products and bring them to market.
- Invest in the future by investing in technology. Banks must continue to assess new technologies and invest in those that fit with their business strategy and help them become innovation leaders.
- Collaborate. Technology and customer expectations are changing quickly and banks must respond with according speed. It’s about understanding what customers want and assessing whether banks have the skills and technology to deliver.
- Stay the course—and don’t slow down. The financial services sector must stay focused on the larger goal and increase their investments in FinTech. They are essential to meeting the needs of not only today’s customers, but also tomorrow’s. Given quarterly financial pressure, the temptation to slow down will be considerable but not strategic.
“Canadian banks must stay the course with a long term view and continue, as they have, to respond to the needs of an evolving market to create a stronger ecosystem that will position them to be even more competitive on a global level. This must encompass business model innovation, technology and architecture enablement, as well as cultural evolution to align with the new realities imposed by the tremendous uptick in the FinTech space,” says Diane Kazarian, National Financial Services Leader, PwC Canada.