Fintech is maturing. The way we bank, buy insurance, and invest today is not going to look the same in the next 3, 5, or 10 years.

Our phone is our computer and a gateway to find solutions that meet our need for choice and convenience. You’re a new business? If your financial institution (FI) won’t extend you a business loan, there are new lenders who can. No time to meet a financial advisor to open an account? Go online with a robo-adviser.

Human interaction is not going away, but robots and artificial intelligence are enabling “cyborg” like relationships with FIs — a combination of human and machine.
Imagine if your trusted FI became like Apple, Google, or Amazon. When you need something, look in your bank’s app store. What if Facebook, WeChat, or other messaging platforms also offered financial products? In Europe and Africa, this is becoming mainstream.

The innovation gap

To understand and respond to all of this, FIs have been adding digital transformation and re-imagining teams that operate inside and outside the organization to help accelerate and respond to change. That’s a tough job, especially if it’s not 100 percent supported by anyone in a decision-making role. The hard work is to set those teams up for success by creating the processes to support their work and make innovation everyone’s job. Those that fail to do that will be practicing “innovation theatre” and wasting time and money on great initiatives that never get implemented.

Innovation strategy and designing how it should work inside a large organization is not for the faint of heart.

The partnership gap

Many fintech startups want to partner with FIs to give their customers the products they want but the processes and mindset within FIs don’t let that happen fast enough. As a result, many are focusing on other partnerships with FIs in Europe, Asia, or the United States.

But for those who have broken through in Canadian FIs, some promising ones are starting to emerge. TD partnered with Moven, CIBC partnered with Borrowell and Thinking Capital, Great West Life and Investors Group have partnered and invested heavily in Wealthsimple.

There are more that consumers won’t see. ATB partnered with, a personal banking and financial management assistant powered by artificial intelligence. In a press release issued in late February on Canada Newswire, Wellington Holbrook, ATB’s Chief Transformation Officer, said, “We are transforming banking by bringing personalized chat services to our customers that will not only simplify their day-to-day banking, but also actively support their savings goals and improve their overall financial well-being as a concierge service. We want our customers to be able to make transactions on their terms, the way they want to bank. The days of banks dictating to customers how and when they can do business are behind us.”

There are hundreds more startups that are focused on advancing the capabilities of FIs through artificial intelligence, machine learning, blockchain, and digital.

The marketing gap

Marketing is the biggest talent gap in Canada. “I hear ‘this innovation will sell itself’ or ‘we’re going to build the brand in earned media.’ No marketer ever said those words,” says Philippe Garneau, President of GWP Brand Engineering. “Startups who want to partner with FIs need to position their product, not just cheerlead for it. That way their limited marketing dollars are focused on the right messaging.”

Garneau continues, “The first lesson of positioning is that the solution is found in the prospect’s mind, not in the product. Too many pitches jump straight into the features of their product before having engaged their listener — or demonstrated how it will fit into their FI’s world.”

So what about all of this?

If the pace of change over the next two to three years is anything like the last 12 months, we are just seeing the tip of the iceberg. Things are just getting started.

Buckle up.