Scotiabank Launches Financial Technology Development Arm

Canada’s international financial services firm Scotiabank has unveiled plans to set up a digital hub for what it calls “redefining banking for the digital age.” The digital factory, as the bank describes it, will be based in downtown Toronto and will hire more than 350 technology experts.

If everything goes according to the plan, the digital center will be up and running by the middle of next year. Besides preparing the bank for the digital age, the center will also strive to develop innovative financial technology for the banking industry.

The financial services sector has almost gone digital across Canada, with banks shutting down branches in remote countryside locations as more and more customers embraced electronic transaction. For example, over half of Canadians’ monthly interactions with a bank are through digital channels.

“In order to deliver the quality of service customers demand in an increasingly digital economy, banks need to transform the way they deliver solutions,” Scotiabank stated in a press release.

Over the past few years, big financial service firms like Scotiabank are facing increasing competition from technology startups and online lenders who have popularized digital banking service.

For some banks, the challenge is unique and too cumbersome to tackle. Even though financial technologies are easily available, large chunks of existing staff in banks are not skilled enough to manage digital operation.

“When people think about working at a bank, they typically think about the branch. But customers interact with banks in so many other ways — on their phones, through tablets and online. That is why the development of the Digital Factory excites me,” Monica Reyes, a member of Rapid Lab, one of the technology centers of the bank.

The bank says that it will join hands with digital startups and firms with expertise in financial technology, in addition to hiring top talent. In 2012, Scotiabank acquired Tangerine, which turned out to be the first bank in Canada to launch biometric authentication through Voice Banking and Touch ID.