Scotiabank Launches Local Fintech Hub as Domestic Competition Heats Up

Banks are increasingly open to pushing innovation projects, with many lenders opting to strengthen their Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term operations as well as research into such avenues as Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term and artificial intelligence. On a broader level, most banks have ushered in a more digitized approach as clients' needs are shifting and as each group tries to outmanoeuvre its rivals in the fintech sector.

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Canada’s Scotiabank is the latest bank to pioneer these efforts, opening a new facility to help develop a wide range of technologies including blockchain, AI, and others. The impetus behind this movement has been a creeping uptick in competition seen in rival banks that are all looking to gain an edge in a more digital-centric era.

To date, Scotiabank also boasts fintech hubs in Mexico, Peru, Chile, and Columbia, which it has dubbed as the ‘Pacific Alliance’. Its latest fintech hub in Canada however will help the group accelerate its research and growth into new technologies.

Long-Term Investment

Over the past few years, Canada's largest banks have also been investing hundreds of millions of dollars into new technologies in a bid to help re-calibrate their businesses to clients that are more likely to utilize online banking. Consequently, this has seen the loss or closure of hundreds of branches, though this phenomenon is not confined to Canada, but is widespread in North America and Europe.

In Scotiabank's case, the group’s Executive Vice President of Digital Banking Shawn Rose has championed the move, trying to solidify the group’s position as a fintech leader and proponent of startups.

"It's accelerating, that competitive fear. We don't want to lose a day. It's critical. The people we hire, they need a place to establish these routines,” he explained in a recent Reuters report.

As recently as December, the group announced a new cadre of leaders to help steer their fintech innovation moving forward. This included the appointments of Jeff Marshall (Canada), Fuencis Gomez (Mexico), Peru (Luis Torres), Daniel Kennedy (Chile), and Marcelino Herrera Vegas (Colombia), helping expand Scotiabank’s digital footprint in each respective country.