The New Wave of Banking: Canadian Edition

The Canadian financial environment differs in many ways from its closest neighbor, the United States of America, but that doesn’t mean it shouldn’t also choose to embrace the FinTech wave. Banking needs to be brought into the modern era and FinTech is what is making this needed evolution a reality. Luckily, the biggest financial institutions are beginning to recognize the major benefits FinTech brings with it and are extending an olive branch (or a maple branch) and working to create partnerships that will bring Canadian banking into the future.

RBC is choosing to seek out the banking revolutionaries at their earliest stages. Through its innovation labs, the company helps FinTech startups launch innovative solutions to modern banking problems. Rather than limiting the scope to Canadian startups (although one lab is in Toronto), these labs are based in important hubs like London, Luxembourg, New York, Orlando and (naturally) Silicon Valley. With an investment seed of $100 million CDN, RBC’s innovation labs will bring forth exciting new technology and RBC will be ready to use said technology to rise to the top of the FinTech ranks.

Scotiabank has reached out to several FinTech innovators in order to upgrade the company’s technology. Last December (2016), for example, the company made the decision to work with DeepLearni.ng in order to better explore the realm of Artificial Intelligence and payment collections. This was not the first FinTech partnership, however, as the company has also set up a partnership with Sensibill to launch eReceipts, a mobile receipt management solution.  As well, it has teamed up with Kabbage to offer its clients small business loans—a collaboration that will let FinTech startups (and other small businesses) quickly apply for loans up to $100, 000 through the Scotiabank website. In fact, the company recently opened a digital factory headquarters in Toronto, a modern building designed to help FinTech innovators bring their technology to the market.

CIBC was the first Canadian bank to recognize the potential in these partnerships and has been building up a strong portfolio of them. First the company developed a partnership with Thinking Capital. Called Rapid Financing powered by Thinking Capital, the new service dramatically improves the credit application process for small business owners. Then, last year, the company partnered with Borrowell, using Borrowell’s technology to provide its clients with an easier online lending platform. The move to join forces with FinTech innovators was a smart one and other banks took notice.

Canada’s financial system is among the top in the world, but this in no way means that Canadian financial institutions should refuse to embrace technology and, with it, change. The addition of FinTech will only make these institutions stronger and better fit to handle the modern marketplace. It is good to see they are embracing this reality and I look forward to seeing Canada’s new financial marketplace.