Thayde Olarte Vice President, Consumer & Micro-finance, International Banking, Scotiabank
AS WE WORK TO MOVE THE BANK FORWARD DIGITALLY, we are taking a holistic view that has four parts to it. First, the customer is at the centre of everything we’re doing. Second, we are building partnerships with fintechs and other organizations to help us leverage our digital transformation. Third, we are fostering a culture where everyone becomes more agile by enhancing our processes and investing in technology. And fourth, innovation is key to our approach. Each and every Scotiabanker is expected to ‘own’ innovation.
We have been very ambitious in setting targets for 2021. By then, we aim to be the leading digital bank in our key markets. In my role, I’m responsible for creating a bridge between the fintech ecosystem and the bank. At the moment, we’re particularly focused on the Pacific Alliance countries — Mexico, Chile, Peru and Colombia, but we have a global mandate. In order to collaborate with fintech, we need to have access to venture capital, incubators and accelerators. The goal is to be ahead of the game and accelerate innovation.
Our fintech partnerships are mainly about one thing: learning. We have so much to learn from them, with respect to how they work, the models they use, and how focused they are on the customer. They also inspire us with how lean and agile they are. We’ve got a lot to learn. The second piece is about gaining the required capabilities to enhance our position. We need to use the experience and capabilities of our people more effectively. And the third piece, of course, is investment. We have to invest in the most promising fintechs that will help us progress to a digital leadership position.
Two of the fintechs we’re working with are based in Mexico. One is a financial comparison site which works as a digital lead originator for several products in that market; and the second one is a digital small business lender leveraging non-traditional data to adjudicate loans. The beautiful thing about these partnerships is that the fintechs recognize that they also have a lot to learn from us — from a regulatory, legal and operational perspective. For example, we can teach them how to handle a critical mass of customers.
Partnering with fintechs does present some risk, but it is a type of risk that can be kept under control. Two years ago, I would have said I was very concerned about being disrupted by a fintech; but today, frankly, we are not concerned, because we have faced up to these disruptive forces, and we now know that Fintechs are not going to have a future without the big banks.
Millennials are important to our strategy going forward, and we are already targeting this group in the Pacific Alliance countries, learning about what works best for them. As part of the customer life cycle, we need to develop appealing products and services for these people as they age. We recognize that we have to start early, but at the same time, we have to be ready for their future.
For any organization to embrace digital transformation, it has to start at the very top, so that the message cascades down. Having a CEO who is committed to digital transformation is very inspirational for people; but at the same time, as we say every day, everyone in the bank owns our digital transformation. Ongoing learning about the latest tools is a big part of that; that’s how we aim to improve our ‘digital IQ’ as a company. In our view, the future of retail banking is not about, ‘What product should we launch next?’ It is all about customer empowerment — and I believe that is true for any type of service organization.