TORONTO, March 9, 2017 /CNW/ - According to Canadian Banks 2017: #Bankovation… Innovation. Modernization. ReInvention report released today, innovation is a top priority for banks who are addressing two key pain points in Canadian banking: customer friction and back-office efficiency. Despite underlying economic challenges, Canada's Big Six banks achieved solid revenues and posted strong returns. Consolidated revenues were CA$133.6 billion in FY16, up 8.6% from CA$123.1 billion in FY15. In the first quarter of 2017, banks continued to show strong results.
According to the report, banking innovation and adoption of emerging technology is flourishing. This includes banks embracing digital transformation, FinTechs collaborating with banks, ongoing exploration of blockchain technology, and deployment of robotics (and emerging Artificial Intelligence (AI)) technology to improve automation.
"Working with FinTechs provides opportunities for banks to embrace new technology and to interact with customers in new ways. Our report shows that banks are increasingly innovating, modernizing, and reinventing themselves to better address a rapidly changing environment, and shifting consumer behaviour, making themselves even more competitive globally and putting the customer first," says Diane Kazarian, National Financial Services Leader, PwC Canada. "2017 will be an exciting year for this sector."
A more competitive payment landscape and changing customer needs has led Canadian banks to invest significantly in increasing the speed, data and interoperability of their payments capabilities. Canadian Banks are also working to improve efficiencies in their back-office operations and reduce complexity and costs brought by legacy systems. Banks are still weighing the opportunities, applications and risks, innovative solutions such as AI, machine learning, robotic process automation and blockchain as possible solutions.
The report also indicates that Canadian banks are beginning to focus on regulatory technology, also known as RegTech, to address compliance challenges. RegTech solutions could enable banks to automatically embed compliance throughout the organization by building it into their processes, lightening the burden on compliance teams themselves.
The Big Six banks had a strong FY16 but the weighted average return on equity continued the decline observed in recent years and stands at 13.7% compared to 14.5% a year ago, largely driven by an increase in regulatory capital. As a whole, Canadian banks responded to the slowing economy with a continued focus on efficiencies and by pruning their cost base and becoming fitter, faster organizations.
To explore this year's Canadian Banks report, please visit: http://www.pwc.com/ca/canadianbanks
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SOURCE PwC (PricewaterhouseCoopers)