Innovations In Digital Banking Designed To Empower Customers
Development and Innovation Financial tech companies and traditional banks partner to bring consumers easy banking experiences.
The rise of FinTech (financial technology) presents an opportunity for established banks and innovative startups to work together to empower consumers with more knowledge and control over their finances.
FinTech is an industry composed of companies that use new technology and innovations to compete with traditional financial institutions in the delivery of services. These leading-edge new financial companies have a host of advantages in that they are typically very lightweight, entrepreneurial, and nimble. However, FinTech firms often need to partner with traditional banks in order to scale their ideas and make them relevant and helpful to consumers.
“Established banks have the important element of trust, along with security, privacy, a known brand, and a very large customer base — in the case of TD, over 25 million,” says Colleen Johnston, Group Head, Direct Channels, Technology, Marketing and Corporate & Public Affairs at TD. “Combining the strengths of FinTech and established banks is very powerful.”
Staying relevant in a dynamic environment
Canadian banks also aren’t new to change, having always focused on — and embraced — transformation and progress. Throughout the history of banking in Canada, institutions have moved with intention to meet customer demand, from the introduction of ATMs and telephone banking to online platforms and mobile banking. As the pace of change accelerates, banks are moving with a new sense of urgency and purpose, while continuing to adapt, adjust, and innovate.
“Consumer needs and demands are changing, and FinTech firms are bringing a lot of imagination and new experiences to the table by focusing on areas where services can be delivered faster and more efficiently,” says Johnston. “Banks can’t afford to be complacent. We have to keep thinking about the customer experience and we need to be sure we can meet their changing needs.”
Realizing the urgency and the need to adapt, TD has been motivated to accelerate its own transformation, a process that’s been underway for several years. The arrival of FinTech has increased the intensity. Knowing that FinTech has a lot to teach established banks, TD is listening, learning, and using their momentum to drive its own change agenda, both by partnering with FinTech firms and refreshing its own offerings.
“For TD, it’s not only about FinTech partnerships, but implementing FinTech principles,” says Johnston. “It’s not who does it better, but what does the consumer want. That’s what we must always keep in mind.”
The power of innovative partnerships
In pursuit of a more engaging customer experience, last year TD partnered with Moven — a New York-based FinTech company — to develop TD MySpend, an app that allows users to keep track of their spending on the go. Used in concert with the TD mobile app, it provides real time information about spending. The app puts information into the hands of consumers, enabling them to have greater visibility into their finances and updates about whether they are trending above or below their typical habits. No input is needed. Instead the app relies on banking information based on their credit and debit history.
“It was the top rated free app in Canada when it was released, with almost a million registered users in the first year, and we now have empirical evidence that it is actually changing our customers’ behaviour — they’re saving more and spending less,” says Johnston. “It’s fair to say we’ve both learned a lot working together. It’s really a perfect partnership.”
It’s also a perfect example of how banks and FinTech firms can work together to shape a new future in financial services for millions of Canadians. Spurred on by FinTech, the banking industry is adapting, collaborating, and ultimately evolving to deliver for the customer.