INSIGHTS
How the Pandemic is
Reshaping the Future
of Financial Services
T
By Andrew Eppich
he COVID-19 pandemic has forced businesses across Canada to digitally transform. According to Equinix’s Global Tech Trends Study, nearly half — 46 percent — of digital leaders in Canada have accelerated their digital transformation plans as a result of COVID-19. That includes the financial services industry, which has been forced to rethink its approach to digital infrastructure in order to enhance customer engagement, improve real-time trading, and protect itself against future disruption. This transformation is particularly necessary if Canada’s financial institutions want to join their international counterparts in embracing three pandemic-driven trends that will ensure their ongoing resilience: Banking as a Service; Open Banking; and the evolution of Open Banking, Open Finance.
How infrastructure transformation enables Banking as a Service In many ways, Canada’s banking industry is ahead of the curve when it comes to digital services. Bank of Montreal launched its first digital platform in 1996, and its Big Five counterparts had all followed suit by the early
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2000s. Today, according to the Canadian Bankers Association, 76 percent of Canadians do most of their banking digitally. Canada is also ahead of the curve when it comes to contactless digital payments: 34 percent of Canadians with a credit or debit card use contactless payments on a regular basis, according to Payments Canada, with the pandemic accelerating the technology’s use. A recent Interac survey found 53 percent of Canadians using digital payments more frequently since March 2020. The country has been slower, however, to adopt trends such as Banking as a Service, which is enabling banks, FinTechs, and digital startups around the world to create new business models by offering financial services through the cloud. Successfully delivering these services requires interconnection – secure, direct, low-latency data exchange between partners – and interconnection requires not just digital transformation, but infrastructure transformation. For example, the below diagram depicts a BaaS model running on hybrid digital architecture, with a mix of on-premises, public/private cloud, and co-location. In this fictional scenario, the
WINTER 2021
