Royal Bank of Canada’s (RBC) chief executive says data is the battleground for banks that will determine the future success of financial institutions.
Dave McKay said during a speech in Toronto on Monday that in the past banks needed economies of scale to succeed, but due to technological advances, they will need data scale in the future.
He added during the Sibos banking and financial conference that technology platforms have created ecosystems which have a deep understanding of the customer’s life.
McKay said over the next few years, banks will have to decide how they’re going to compete — which may require a rethink of their core value strategies.
He also pointed to the potential of artificial intelligence and blockchain, and said banks will have to adapt and evolve further and faster than they have in the past.
McKay’s comments came as RBC announced a partnership with J.P. Morgan and Australia and New Zealand Banking Group Ltd. to launch the Interbank Information Network, which uses blockchain to facilitate easier global payments.
“For banks, like every other business, the battleground will be data. Whereas in the past banks needed economic scale to succeed, in the future they will also need data scale,” he said.
“This can be gained through existing franchises, or increasingly through strategic partnerships, and the use of open APIs, to enable them to create a platform effect.”