Bank of Nova Scotia unveils ‘digital factories’
Plans to attract specialists, develop software through smaller operations
Bank of Nova Scotia has launched “digital factories” in five countries in a bid to attract top tech talent and speed up the development of online and mobile banking solutions.
The flagship factory in downtown Toronto, which executives opened up to media on Thursday, is being joined by four smaller versions in South America and Mexico, where Scotia has traditional banking operations.
The plan is for the factories to collaborate with each other, as well as with upstart financial technology companies that are influencing the way people choose to do their banking.
Scotia has said that more than half of Canadians’ monthly interactions with banks are already taking place through digital channels — using phones, tablets, and online banking systems.
Brian Porter, Scotia’s chief executive, said Thursday he challenged executives three years ago when he took over as CEO to “get out of... the Bay Street bubble” and see how the rest of the world from Australia, to Asia, to Israel was dealing with technological change.
“You can’t do that in a traditional siloed environment,” Porter said, noting the bank reached into Silicon Valley for Shawn Rose, the executive hired to lead digital banking and oversee the new factories.
A website set up for the digital factories says the plan is to rapidly build and develop software that will get digital banking to customers faster.
The Toronto factory, complete with tech staples including a games room, workout facilities, and bowling alley, has more than 200 employees with plans to add 150 more.
Employees are developing a range of tech innovations, such as travel apps for mobile phones and Blockchain systems for retail.
At a conference in Toronto earlier this month, Porter said the bank is spending about $2.5 billion a year on technology, with 60 to 65 per cent of that devoted to running the bank, and the balance aimed at initiatives to change the bank or create new ways of banking.
To staff its digital factories, Scotia is looking for the type of tech specialists sought after in other industries, such as data scientists, software and blockchain developers, and engineers, according to the factory website.
In an indication of the shift from traditional bank hires, the website describes the factory as a “startup with a steady income,” and says working there is a “different kind of bank job.”
Bringing that kind of specialization into the bank will be required for Scotia to build the applications, products and services — fuelled by customer data and feedback — it hopes to develop in-house.
John Aiken, an analyst at Barclays Capital, said creating digital factories was a savvy move on Scotia’s part because it indicated the bank was taking an “enterprisewide approach” to technology.
In a report in October, when Scotia first disclosed the plan for the separate unit within the bank, Aiken said he would not be surprised to see other Canadian banks follow suit.
Earlier this week, Scotia and Royal Bank of Canada were part of a group that committed $5 million to support an accelerator for promising Canadian artificial intelligence startups.