Canadian banks have found themselves in a precarious position, especially when it comes to their approach to new technology.
With competition increasing between the big five as well as the fintech community, coupled with a weakening economy, the traditionally conservative major banks in Canada must quickly adapt to the rapid changes taking place in the industry.
According to KPMG’s recent Insights Into Canadian Banking report, financial institutions must comply with tightening regulatory burdens, rising customer expectations and increased stakeholder pressure to do more with less in a difficult economy. These changes ultimately translate into new requirements for IT staff, and an emphasis on collaboration as well as performance.
Innovation vs. Risk Adversity
Financial intuitions have found themselves caught between a rock and a hard place when it comes to technological innovation. Increasing customer expectations and new competitors are making adaptability a key asset, but the industry is one that has been traditionally slow to adapt.
“Anybody who’s going to be managing your money, you’d hope to be relatively conservative, but they are learning how to change at a very fast pace as the world around them requires much more change than they’re used to,” said Mark Smith, Leader of Financial Services Industry of KPMG Canada.
A New Playing Field
Smith adds that these changes are coming at a time of renewed pressure to do more with less, given the current economic climate.
“The external factors, both customer expectations in technology along with the regulatory and risk environments — which continue changing and getting more complex — are forcing change within the banks,” said Lian Zerafa, a Financial Services partner at KPMG. “They’re stepping up, but there’s obviously the clash of the need to change and the natural inertia of something that big and complicated.”
The Line Between IT and Business is Blurring
Given the challenges the industry is currently facing, leaders of financial services firms are starting to rely more on technology to drive business outcomes, blurring line between IT and business operations.
“The old ways cooperating and sharing authorities, etc., aren’t working very well in this new environment, so they’re having to rethink how technology integrates into the business,” said Smith. “I’ll be bold and predict disruption in the IT/business divide. That line is going to move back forth a lot over the next couple of years,” adds Zerafa.
Collaboration is Key
In this new environment, IT departments are under renewed pressure to seek out opportunities to break down silos and collaborate with colleagues.
“There’s an increasing premium on self-driven collaboration skills,” said Smith. “You need self-starting knowledge workers who, on the one hand, have a passion for getting their job done, but on the other hand have an equal passion for knowing what their colleagues are doing and integrating their efforts with them, without being overseen by a lot of management.”