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From “design thinking” to “hackathons” and “chatbots,” innovation comes with its own terminology. And financial services professionals have been challenged to pick up on the new language.

For example, digitization on its own remains difficult. A 2018 joint study on digital trends in financial services by California-based Adobe Systems Inc. and Econsultancy.com, a unit of U.K.-based Centaur Media PLC, found that 61% of wealth-management companies worldwide rated technology as difficult to master, as did 36% of insurance firms.

Probable reasons include the wealth-management business facing regulatory tightening and its longstanding personal client relationships, states the Adobe/Econsultancy report. However, the latter is exactly why digitization and the broader concept of innovation are so important. As technology drives client behaviour, firms must continue to meet client needs or lose those relationships.

To succeed in a technologically disrupted industry, firms must build around clients, states the report. Being client-focused means offering a seamless experience across both offline and digital channels, whatever the client’s entry point and goal.

Thirty-six per cent of survey participants who work in financial services said that making the client experience easy, fun and valuable will be the primary way they will seek to differentiate themselves over the next five years. For those who work in banks, that figure is 41%.

Canada’s big banks are among that group. New online banking tools use artificial intelligence (AI) to answer clients’ questions or offer personalized services, building on client interactions to improve the tools’ responses.

Last year, Royal Bank of Canada (RBC) launched its NOMI tool to track spending and help clients save. And Bank of Montreal (BMO) launched chatbots (applications that can conduct conversations with clients) to serve customers on the Facebook and Twitter platforms.

Referring to innovation in general, Rebecca Tascona, chief operating officer, wealth management, at BMO, says the bank “continues to look at the entire customer journey, from first interaction – opening a bank account, applying for a credit card or setting financial planning goals – to long-term loyalty. At every step, what allows us to create smarter, simpler, more personalized experiences is technology.”

Innovation regarding client experience also means focusing on financial advisors’ needs.

Chris Burke, vice president of digital solutions and sales enablement in RBC’s wealth-management division, says, “The advisor remains the centre [of innovation goals within wealth management]. We’re leveraging innovation to help our advisors be more proactive, more informed and to allow them to spend more time on advice and less on administration.”

For example, a couple of years ago, RBC launched its Advisor’s Virtual Assistant, a mobile app that allows advisors to perform such tasks as accessing client information and sending “know your client” requests for approval remotely.

Similarly, in October, BMO launched its WealthPath platform, a “goals-based” digital planning tool for advisors that allows them to collaborate with clients more effectively and ditch lengthy paper trails. Time saved means advisors can focus on building relationships, Tascona says.

To reap such benefits, however, requires advisor buy-in.

In the U.S., 75% of advisors admitted they could do a better job of making use of the many digital and automation tools available to them, according to research from Boston-based Cerulli Associates Inc. In comparison, Burke says, about 2,000 RBC advisors across Canada and the U.S. use the bank’s virtual assistant – an adoption rate of about 56%.

Ongoing innovation includes using AI and the subfield of natural language processing to help advisors research or plan for meetings, Burke says. For example, client data and intelligence can be leveraged to notify advisors about clients’ life events and enable advisors to have more personal, meaningful conversations with their clients.

Voice interaction is another tool with potential for greater development. For example, BMO launched the voice-enabled Skill app for Amazon Alexa in 2017 to give customers quick access to banking information.

To enable further innovation in the broader workplace, BMO plans to build its Urban Campus in Toronto, part of a wider revitalization within the bank throughout the Greater Toronto Area, Tascona says. The project aims to serve clients by using up-to-date technology and innovation.

When asked if advisors will work on the campus, Tascona says the project still is in development and the decision to move employees to the space will be based on the bank’s workplace transformation strategy, the priority of which is to “mobilize teams to operate more efficiently and get closer to the customer.” The campus is expected to open in 2021.

Beyond wealth management, Burke says, RBC aims to enable innovation throughout its organization. An example is teaching design thinking – a process through which new products and processes are developed – to staff bankwide, which they, in turn, can use as they consider how best to serve clients.

The goal, Burke says, is to make innovation “organic and enabled for everybody.”


Canada has been criticized for lagging other countries in fintech and failing to develop a national fintech strategy. On the plus side, a report published by Switzerland-based KPMG International last year states that large Canadian financial services institutions have made significant inroads in investments and in developing partnerships to drive innovation.

Canada saw $263 million invested in fintech deals in the first half of 2018 across venture capital and mergers and acquisitions. While that figure doesn’t match the pace of investment in the second half of 2017, when $510 million was invested, the KPMG report calls the figure “solid.” In particular, Canada is a global leader in artificial intelligence (AI) innovation, with highly regarded specialists in Toronto, Montreal and Edmonton that attract investment. “We continue to see banks acquire companies in the AI space, in part as a talent grab to fuel their own innovation activities,” the KPMG report states. For example, Toronto-Dominion Bank (TD) acquired AI startup Layer 6 AI last year.

Banks’ overall innovation efforts are the result of various partnerships, including with fintechs. “We continue to form strong partnerships with fintechs, big tech, consortia and accelerators to augment our current capabilities and build on the goal of advancing our services,” says Rebecca Tascona, chief operating officer, wealth management, with Bank of Montreal.

Banks also continue to invest in robo-advisory initiatives, either launching their own or working with fintechs, states the KPMG report. Last year, for example, Royal Bank of Canada launched a robo-advisor platform (see story on page 18) and TD partnered with U.S.-based Hydrogen Technology Corp. to offer clients an online investing platform.

In a list of 2018’s top fintech innovators worldwide published jointly by KPMG and Australia-based H2 Ventures Pty. Ltd., 14 were in wealth management and 12 were in insurance. Most were payment or lending companies, but fintechs that offer a broad range of financial services to customers placed high on the list.