At this moment in time, policy makers and banks have a real opportunity to make a profound impact on financial services which will benefit all Canadians.
In an interview with FISPAN’s Co-Founder and Chief Strategy Officer Clayton Weir, on the latest episode of the If I Ran the Bank podcast, Justin Ferrabee, former Chief Operating Officer of Payments Canada said Canadians have an opportunity to lead. Right now he believes we’re behind.
The change we’re seeing in the market today is based on the emergence of new technology, innovators and heightened client expectations. The necessity of embracing these changes has skyrocketed due to the Covid-19 pandemic and work from home safety measures. Businesses require their banks to provide more functional and seamless ways for them to access banking services and adapt to this global digital shift.
Ferrabee said Canada has a very strong banking sector, that is trying to grow, adapt and “trying to do the right thing for their customers and for the country”. The roadblock Canadian banks face comes in the form of regulation. In fact, Ferrabee said Canadian banks live in a context of regulation, legacy systems, competition and global trends. A lot of the regulations and protections are favourable but it’s not an easy thing to do.
After the 2007-2008 financial crisis, it’s fair for regulators to be concerned and cautious of change, especially during a time such as this, but it’s also necessary to recognize the necessity of it. Just because it’s hard doesn’t mean it shouldn’t be done, Ferrabee said. Many of these new opportunities for banks come from concepts like open banking, embedded baking and payments modernization.
Will Canada’s financial institutions embrace this change?
“There’s been progress, but it takes a long time,” Ferrabee said. “If there’s reluctance to change, which there is, things can look like progress for a really long time without anything really happening. I’m optimistic because I think the potential is profound, I’m pessimistic with the speed at which we’ll get there. The real question is, will we get there in time to maturely benefit from it or not? Right now I’d say we’re not on track to do that”.
When FISPAN asked Justin Ferrabee what he would do if he ran the bank, he answered, “If I ran the bank, I would look to that change and would work less to defend myself from its impact and more to embrace it and the opportunity it creates”.
If Canada’s banking sector wants to emerge as a global leader and begin to embrace change, they should start adopting key trends such as open banking, payments modernization and embedding financial services within other applications, or they may risk losing out on wealth that will be created outside of Canada.
Listen to Justin on the full episode of the If I Ran the Bank podcast on Apple Podcasts, Spotify, Google Podcasts or by visiting the If I Ran the Bank website.