According to the recent PwC’s 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 (FinTech) solutions. FinTech offerings range from competing financial services such as alternative lending, to additive solutions atop existing banking services, to enabling technologies for the banks themselves. Capitalizing on the latest mobile, cloud and digital technologies, Canada is now home to many FinTech firms who are trying to shake up and be accretive to the banking value chain.
Canadian banks are not only including responses to FinTechs as part of their growth strategy; they are investing in ecosystems which will position them to better compete in the market. Building an environment that produces innovative offerings is essential to be competitive in the years to come.
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.
Click here to read more from PwC.