‘We’re trying to bring a critical, thoughtful approach to the notion of disruption,’ says Ivey professor Jean-Philippe Vergne.
This past October, a U.K. tech company added the word "blockchain" to its name − and saw its stock jump almost 400 per cent in two days. Hype and buzzwords aside, that overnight uptick speaks to the speed with which a FinTech startup can gain traction in a sector that used to be difficult for newcomers to breach.
But Michael King doesn't believe that the financial old guard needs to fear these upstarts. The Ivey Business School professor is the faculty director of Ivey Executive Education's new program, Mastering FinTech: Strategies for the Future. The program is aimed at managers and executives in the financial sector, and anyone who has an interest in incorporating the opportunities that FinTech presents in their own organizations. Prof. King's message to them: FinTech startups aren't the enemy, they're ideal partners.
Canadian banks, says Prof. King, are hardly inactive when it comes to technological innovation. He cites the strong collaborations between Canadian banks and university researchers, such as RBC's Borealis AI (artificial intelligence) labs in Toronto, Edmonton and, soon, Montreal.
"It's a great ecosystem," he says. "There's been for decades lots of investment into technologies addressing different parts of a bank's operations: trading, settlement, straight-through processing. But where some Canadian bank executives may have been caught on their back feet is how rapidly startups and non-traditional entrants have been able to develop apps that really appeal to consumers in ways that have not been anticipated."
As Canadian consumers get used to technology that tailors services − be it hotels, taxis or entertainment − to individual tastes, they're expecting similar personalization options for their finances.
One of the Ivey program's participants was Rajan Bansi, head of Investments and Advice for RBC InvestEase, RBC's new online investment advice service that is currently in a limited pilot in Ontario. "There's a huge commitment across RBC to offering relationships that are digitally-enabled ones," says Mr. Bansi. "This is something that clients want, so there's a really big focus on how we use technology to empower colleagues and to utilize tech to take care of our clients' needs."
In November 2017, Mr. Bansi was one of 20 participants in Ivey's inaugural FinTech executive education program. Each day was divided into modules focused on subjects such as P2P (peer-to-peer) lending, blockchain and cryptocurrency, and AI and machine learning.
The modules began with high-level discussions about how the industry is changing, then moved into case studies that explored the impact on specific firms.
"It was like starting a new class every four or five hours," says Mr. Bansi. "It's a terrific set-up. The case studies were very timely and relevant, and, because the professors knew a lot of the subjects through their professional networks, they were able to provide a lot of extra perspectives and information."
The program also featured guest speakers from FinTech startups, who talked about how they view disruption from their vantage points. The two days concluded with a reception at IBM's Bluemix Garage corporate accelerator in Toronto.
New sessions are scheduled for April and October this year.
Ivey professor Jean-Philippe Vergne, who teaches some of the modules, sees the program's main goal as delivering "a basic understanding of what the new technologies are, what they can do, and how they've been used by other companies" to executives who may be too busy to know what's going on outside their area of expertise.
"It's surveying the landscape in a meaningful way that is really actionable, and can lead to strategic decision-making in the short-term," he says.
"We're trying to bring a critical, thoughtful approach to the notion of disruption, which is very much an overhyped, poorly understood notion. The evidence that we have from research is that disruption revolves around a new technology that is doing things in very different ways at a lower cost − and that allows challengers in the industry to target new customers, usually at the lower end of the market. Disruption is happening all the time, and it can be very fast."
RBC's Mr. Bansi says he came away from the program with an even greater appreciation for the opportunities that FinTech represents for his organization.
"The segment on blockchain, for example, gave me additional understanding about this technology and its capabilities. This will allow me to contribute to the conversations my peers are having about how we can best leverage these new tools."
Prof. King says: "We're trying to give banking executives the cross-enterprise perspective, and to see the opportunities to partner with FinTech startups, who have technologies and solutions that can help the banks. We're also helping them look outside banking to see where the real threats are coming from, which I see as being large social media or technology companies − such as Facebook or Google, or their Chinese counterparts Alibaba or Tencent − as well as from non-traditional sectors such as telecoms, cable companies and other players that have a direct connection to Canadian consumers."
He says it's his personal goal "to make sure Canada is successful and dominates in the coming FinTech revolution," which he thinks will be an important source of jobs, productivity growth and GDP growth. "And there will be all sorts of benefits to consumers because banking will be simpler, easier, less expensive and faster."
This content was produced by The Globe and Mail's Globe Edge Content Studio. The Globe's editorial department was not involved in its creation.