Qualitative Digital Transformations in Canada’s Banking Industry

How is technology and new fintech players impacting Canada’s banking and finance industry?

Canada’s banking and finance industry is focused on increasing the speed, safety and efficiency of its services, and getting ahead of existing and new competition. In some parts of the financial markets, new fintech entrants offer products and services that compete with banks and offer clients more choice, which was a concern a few years ago. But today, the banking industry is seeing a lot more collaboration and several fintech startups seek to partner with banks in areas where they, as specialists, can offer better solutions to challenges, such as cyber security.

With an increase in collaboration, the banking industry aims to deliver richer solutions for the people who need its services; the customers or business owners who rely on financial services to help them realize their dreams.As someone that has worked in the space for more than a decade, I know this to be of increasing importance. 

“The banking industry is seeing a lot more collaboration and several fintech startups seek to partner with banks in areas where they, as specialists, can offer better solutions to challenges, such as cyber security.”

Workplace technology is part of the secret sauce to being successful through such transitions: an understanding that business comes first and that tech has to enable the business.For example, we’re looking to build an urban campus in the heart of Toronto; a facility for the business and technology colleagues that build our digital solutions that will enable ease of use and better outcomes for our customers and community.  

With our urban campus, we want to attract the best talent who can turn architecture and tools into more-attractive customer propositions and workforce technology. The goal is to create an environment that draws the best out of people and puts an emphasis on providing the best possible workplace design and solutions for people to say: “I want to go to this company rather than this company.” So, it’s about putting the human at the center of every decision.

Which technologies are you most excited by in terms of their potential to disrupt the banking sector—and why?

In my field of work, my team looks to assess technological innovations and determine how best to satisfy changing employee needs. For example, we have been experimenting with mixed reality. This involves looking at how people can model and visualize analytics and data without the need to be physically present at a traditional computer. Using mixed reality, a person can move his or her fingers to the left or the right, and create scenarios of different outcomes. 

This technique is also powerful for internal training related to employee onboarding using tech tools like the Microsoft HoloLens. When we think about our first job at any company and everything that it entails; having the ability to get people up to speed before they put one physical foot through the door is thrilling. 

We also focus on service robotics. For example, our InvestorLine business, in the First Canadian Place, is home to our first service robot named BILi. We are experimenting on how to empower employees in a dynamic workplace experience. BILi helps promote the BMO brand, increase customer awareness of BMO’s products and services.

Many people speak about job losses due to AI and robotics. My belief is that all these technologies will create new opportunities, and this is a similar conversation that we had eight or nine years ago when we started centralizing software distribution. The evolution from floppy disks to where we are today did not reduce the need for a full workforce. Instead, people transitioned to different roles such as DevOps, software packaging or QA testing. I believe the same will hold true regarding the robotics domain. For example, when something goes wrong with your laptop or your phone, you now have a place to go to fix it. We will now need the same services for robot maintenance. There’s a real opportunity to train thousands of people in this new space.

This is a growing field; another bank recently launched a robot specialized in welcoming and greeting customers. It’s still early days, but it’s growing and when looking at some of our Asian counterparts, new uses are being implemented regularly.  There will be a sweet spot for it. I strongly believe new jobs will be created providing people with opportunities to perform work of higher value.

As a leading CIO in an industry that is often seen as slow to adopt new technologies, how do you approach your role at the intersection of disruptive change, and stability and trust? 

Transformation is doing something so different that it becomes a qualitative shift, not just quantitative. It may feel as though the financial system has changed little in the last decade, but it has actually changed a lot. Historically, banks drove most of the change for financial technology. Although there has been a period where new digital tools were slow to integrate into banking services, there has been a dramatic expansion of digital transformations across the Canadian banking sector and different organizations worldwide through embracing new agile ways of working. This is vital to stay in business. 

“How can we leapfrog? How can we implement transformational change? How can we continuously disrupt, including our own operations?”

Managing this process properly comes down to risk. Risk is necessary to thrive but success is about placing a calculated risk. So, one side of the consideration must be focused on keeping the boat afloat, but the other side is there to challenge the status quo and ask: “How can we leapfrog? How can we implement transformational change? How can we continuously disrupt, including our own operations?”

When undertaking a digital transformation, it’s important to achieve a good pace but not blindly have the objective of completing a transformation in say, two years. I have seen several false starts from different organizations because they start with a great announcement without putting in a lot of thorough analysis into the roadmap on how to move forward. The question should be “What’s the ultimate prioritization and who do we partner with?”

That’s why, over the last few years, tech-focused companies have entered multiple partnerships. Apple is a prime example of this; when the company first made its entry into the finance space, it formed several alliances with organizations of all sizes.

“If data is the new oil—a critical resource—we should consider digital speed to be the new water, another critical resource.”

Overall, I’m bullish about the positive aspects of digital transformation and believe that company leaders can harness the opportunity of a transformation to gain competitive advantages. This is what I love about my role as CIO. The focus is to improve our own team’s experience.

Ultimately, digital transformations are critical to providing fast services. Data is the new oil, but speed is also very critical. Customers and businesses are eager to access effective services and products that enable customers to have the tools to decide as fast as possible. So if data is the new oil—a critical resource—we should consider digital speed to be the new water, another critical resource.

What are your thoughts on how big banks should partner with smaller fintech players and start-ups? 

Fintech is an opportunity for banks. When I won the Top 50 Women in Fintech award, some people asked me, “How did you win that award? You work in a bank.” My answer to that was: “What do you think a bank is? It’s financial services empowered by technology.” It’s always been that way; and it’s interesting that people mentally separate banks from fintech because in many cases the same talent and resources move between traditional banks and fintechs on a daily basis.

Instead,we should think about the global banking ecosystem in terms of things that we can do well, others we can learn from one another, and those we can leverage and scale.I always ask my team: “Who’s at the center of the decision?” If the answer is consumers, business owners, homeowners, and students, then it makes sense for us to partner with fintech players that also have closer relationships with these segments.

What are the roles of government, industry, academia and others in instilling the level of tech literacy in the next generation that will be required in the future fintech economy? How can this best be done?

Financial globalization is very much intact and becoming more inclusive. However, the number of people who still do not currently have access to the Internet is estimated to be three billion. Therefore, improving tech literacy should be a shared interest by all. The increasing use of digital technologies in cross-border finance can only reinforce this trend toward a more diversified global financial system.

However, there are two distinct elements to determine the level of tech literacy a group has; opportunity and support. Even with the right tools, developing tech literacy can be difficult.  At the United Nations, I spoke about this issue at the Multi-stakeholder Forum on Science Technology and Innovation. There is no silver bullet to fix the accessibility; everyone starts with a different starting point in tech literacy. And for some under-served communities, the focus must be on providing the fundamentals to live, such as electricity, food, shelter and water, before initiating efforts to bring tech literacy. This is where the banking industry, the business community, governments and academia have a chance to spearhead a broad movement to create opportunity and drive growth—it’s all about shared accountability. 

As for developed economies, efforts are being made to upgrade tech literacy internally. For example, we’re working on digital literacy and tech fluency within our own organization because even big companies have different levels of fluency across their organization. Take hospitals for example; some have mandated their doctors through “digital fitness training” because with the upcoming technologies, doctors must be technically literate. 

“Transformation is doing something so different that it becomes a qualitative shift, not just quantitative.”

A great example of the tech industry making a difference happens at the annual Black Arts and Innovation Expo here in Toronto for Black History Month to bring awareness to the different tech career paths young people in the black community can explore. From being a developer or network specialist, there are careers that sometimes go unnoticed because people don’t even know these opportunities exist.

Other great examples include Cisco doing focus work for the Indigenous community; Farzia Khan who ran the first all-female hackathon in Canada, and organizations like Girls Who Code. Several organizations are making valiant efforts, but the number one thing is that access is the first step, but it is incomplete without opportunity. That’s why it’s important to have ongoing support. Giving someone a laptop, a tablet or a smartphone is great, but it’s incomplete without opportunity. To instill financial and tech literacy, we must connect the dots to bring transformation to the table. My parents had no technology skills; I’m the first person in my family to go down this path and it’s resulted in transformational outcomes for me, but it’s because I had the access, opportunity and support.

What is your vision for Canada’s future economy?

Canada should be a world leader not for the sake of saying that we’re the world leader but because we can show the world that we have this great country with a mix of different people and different talents, that is open and welcoming, and is primed to create the right environment for success. 

A great example of this is when I reached out to three levels of government to discuss how we can further improve digital literacy in Canada and they all answered. I consider myself a regular citizen and yet they had open conversations with me. More and more, I realize this is not the case in many other places around the world.

And so, I would urge our Prime Minister to make sure we continue to enable the great elements for success that we have in place in Canada, and that we remain open to hearing from all segments of our society because great ideas can come from everywhere. So, I would love to see Canada having open, multi-stakeholder forums where we can hear various perceptions and ideas – especially from our youth who drive innovation. Many young people in society feel quite marginalized and that their voices are being quieted, yet they have a lot to add. We must listen to them and help groom the leaders of tomorrow.