Will COVID-19 slow the pace of Canadian payments innovation? Quite the reverse – it’s accelerating it!

Will COVID-19 slow the pace of Canadian payments innovation? Quite the reverse – it’s accelerating it!Will COVID-19 slow the pace of Canadian payments innovation? Quite the reverse – it’s accelerating it!

Last week, I hosted the latest webinar in our Canadian Executive Circle series, focusing this time on the highly topical subject of “Canadian payment innovation in a post-COVID 19 world”. It was an especially fascinating and delightful experience, as the panelists represented a truly all-star cast in the payments firmament at both a Canadian and global level.

Deloitte Partner and renowned payments expert Todd Roberts moderated the session, with — alongside myself — an impressive set of panelists including Maureen Jarvis, Head of Global Transaction Services at Bank of America; David Watson, Head of North America for SWIFT; Graham Rule, Country Head, Global Banking Sales, Global Liquidity and Cash Management at HSBC Bank Canada; and Lisa Lansdowne-Higgins, Vice President, Business Deposits and Treasury Solutions at RBC Royal Bank of Canada.

We normally host sessions in our Executive Circle series in person, but — as we all know from first-hand experience — COVID-19 has a way of changing standard operating procedures. There’s no question that these are unusual times, with the impacts of the global healthcare crisis on the banking and payments industry still playing out, and its ultimate effects yet to become clear.

At the moment, I think many banks are struggling with balancing. By this I mean balancing their short-term responses to navigate through this pandemic, with longer-term and more strategic actions to sustain the forward momentum of initiatives that will best serve them post-pandemic, once we return to some form of ‘new normal’.

In terms of the longer-term aspect, I feel it’s vital for banks to pay more attention to driving shareholder and customer value – which in turn means that working on modernization and strategic initiatives concurrently with tackling immediate pandemic-related issues is paramount. More specifically, banks will need to focus on realizing operational efficiencies to drive down costs while finding new roads to revenue generation.

So that’s the background against which our webinar took place. It was a wide-ranging and insightful session — and I’d like to highlight three key takeaways that emerged for me. In my view, they all merit further consideration and discussion. They are:

  • COVID-19 has accelerated Canadian payments innovation – All speakers noted the powerful boost that COVID-19 has delivered to banks’ digitalization programs, by dramatically increasing customers’ uptake and usage of new remote and digital ways of paying and receiving money. This effect is evident across all customer segments, from private individuals via SMEs all the way up to multinational corporations. And it’s seeing banks bring forward and escalate their innovation strategies to meet rapidly-advancing demand.
  • Liquidity is currently the biggest challenge and focus for corporate banking clients – Amid the crisis, tracking and managing liquidity has emerged as the top issue for corporate treasurers – not least where visibility is obscured by physical payment methods such as checks. So banks are doubling-down on offering liquidity management portals to provide an accurate, real-time view of cashflows, including via mobile apps. They’re also recognizing the connection between client-centric liquidity and interbank liquidity, segmented at the client account level to expose the front end to the client.
  • Open banking and APIs will be increasingly key in elevating the end-user experience – With open banking rolling out in more and more markets worldwide, Canada has launched the second phase of its open banking review, focusing on security issues. In the Canadian banking community, there’s growing excitement over the ability of open banking and APIs to make it easier to bring innovation to customers – including through collaboration with FinTechs – and enhance end-user experiences. It’s going to be an exciting ride, so buckle in!

Those are my big three takeaways from the webinar. But there’s no substitute for hearing the richness of the full hour’s debate — so please click here to access it.

In addition to the three key themes I’ve mentioned above, I think the overall focus on innovation and collaboration that all the panelists surfaced during the debate warrants deeper coverage. For this reason, I plan to center my next webinar around the use of collaboration across the banking ecosystem to enable innovation.

The webinar will once again be part of our Canadian Executive Circle series, no doubt with another all-star roster of panelists. Keep an eye out for an invitation in the next two to three months.

I’d like to close by thanking Todd Roberts from Deloitte for moderating, and all of the panelists for giving up their valuable time and sharing their equally valuable insights with the broader community.