Industry standard

EXCLUSIVE: Will Canadian banks lead the industry standard in the future?

– Bobby Suman, Finance Fintech

CIBC. Scotiabank. TD. The Bank of Montreal. The Royal Bank of Canada. Whether they know it or not right now, Canada’s top five banks are well positioned to generate value and opportunity in banking. The safety and security of the Canadian banking system is recognized worldwide, that’s for sure. In reality, Global Finance magazine’s annual ranking of the safest banks in the world included 5 Canadian banks in their top 30 for 2021 – representing around 16%, that’s very impressive! These financial institutions hold great promise for disrupting the current industry hegemony.

Confidence in Canadian banks is undoubtedly reflected in deliver optimal customer experiences, with the implementation of cloud computing reducing risk compliance risk, improving data traceability, and improving virtually every level of an application without performance degradation. With Canadian banks like BMO partners with AWS, CIBC with Microsoft and RBC with Azureconfidence in their execution will only be strengthened.

This confidence in Canada’s largest banks also bodes well for the future of their ecosystem, as their framework could very well advancing the world of Open Banking; where customers securely share their financial information with financial service providers to improve customer access to products and services that match their unique needs.

Canada’s Open Banking Advisory Committee has indicated that the concept is feasible for the country by the end of 2022, offering a $10 billion opportunity for Canadian banks. For comparison, it is estimated that Open Banking will provide a $9.2 billion opportunity in the financial sector for fintech and other financial services disruptors in the UK.

A key factor in making this achievable is data custody, which Canadian banks are clearly in the best position to execute given that we have already established the trust their consumers place in them, and smart decision-making when it comes to supply partners. for cloud-native operations.

Some might criticize that Canada moved too slowly in this process, but having already mastered trust and data security, the future is sure to be bright. In March of this year, Canada appointed Abraham Tahijan as head of Open Banking in order to renew the urgency in this matter. Additionally, IBM is working with Canadian institutions on Open Banking transformation, as a technology and strategic partner to guide Canada through issues of standards implementation, compliance, artificial intelligence and more. Moreover !

A question hangs over the banking sector; how can banks do more? We’ve seen waves of challengers come in and go beyond the traditional offerings expected of a back. With this, consumers demand more, and banks must meet this expectation to avoid becoming the dinosaur of the financial world. Canadian banks understand this because they are clearly adaptable to meet the unique needs of their customers.

Scotiabank and YMCA announce $2.15 million partnership to help increase school completion among vulnerable youth. Traditional suspensions from schools are missed opportunities not only for students, but also for their families, the school itself and the community at large.

The investment is to support the YMCA Alternative Suspension (AS) program to act as a catalyst for positive behavior change, helping students stay in school, graduate, and hopefully live full lives. their life. Scotiabank’s partnership with YMCA Alternative Suspension is a flagship program within ScotiaRISE, the Bank’s 10-year, $500 million initiative to promote economic resilience among disadvantaged groups.

the RBC Future Launch also represents how Canadian banks are proactive in supporting the next generation. In research obtained from the Real accessibility index of young townsit was clear that Canadian cities just aren’t affordable for young people, with one of the biggest barriers to affordability being that wages don’t keep up with the cost of living, even when working full-time. That’s where RBC Future Launch comes in, a decade-long, $500 million commitment to empowering young Canadians to access the jobs of tomorrow, with investments in areas like skills development and mentoring.

That may not seem like a lot to some readers, but it really is. Why? This reduces friction points and solves a dilemma that has evolved over time; finally, banks are becoming a strong digital service, while retaining that traditional, welcoming and supportive nature of an old-school manager. Consumers want to feel taken care of, and who is doing that better than Canadian banks right now?

Despite these bright spots, Canadian banks have come under scrutiny for their ESG behaviors in recent months. While lenders like Barclays and HSBC have set proactive targets in the race to net zero and reduce their emissions, 2030 targets to reduce their absolute emissions, Canadian banks have apparently doubled their funding for oil sands projects highly polluting over the past year, based on research from the Banking on Climate Chaos report.

However, it would be ignorant to isolate this as a criticism of Canadian JUST banks.

After all, the top 4 banks for fossil fuel financing in the world from 2016 to 2021 were JP Morgan Chase ($382 billion), Citi ($285 billion), Wells Fargo ($272 billion) and Bank of America ($232 billion). These are some of the most sophisticated and prestigious banks we have. Like Canada’s banks, they too have a responsibility, and in this issue it’s best to consider the industry as a whole so that everyone can work together towards a greener future.

Moreover, Canadian banks are showing signs of change. Just last month, CIBC was named the greenest employer in the country. When it comes to ESG, Canadian banks are now working from a new manual.

Could Canadian banks establish themselves as the undisputed industry leaders of the future? Or is there more work to be done than meets the eye?