by Joseph Young
The Bank of Nova Scotia (Scotiabank), the third largest bank in Canada by deposits and market capitalization, has announced its launch of a digital hub in downtown Toronto to lure in technological talent and innovation for the bank.
The Scotiabank’s digital hub will focus on searching for innovative fintech startups and technologies that could potentially simplify banking and help optimize current banking systems and protocols of Scotiabank.
“It’s critical that we bring new skills into the organization. Clearly, we see the factory as a way to attract new talent,” said Michael Zerbs, co-head of information technology at Scotiabank. “It’s really one part of a much larger technology initiative.”
Amid the increasing competition of fintech startups and the growing interests of Canadian banks in financial technology, the bank decided to create a team of 350 employees to search for unique applications and platforms that could benefit the bank and transform its banking systems.
Scotiabank CEO Sean McGukin previously announced in an interview with Reuters Canada that the bank is planning to continue investing in technology, especially startups in the fintech space over the next three years, until 2018.
During the last three months, an increasing number of banks and well established financial institutions have been looking into the blockchain technology and unique platforms that could be built on top of the transparent and distributed ledger of transactions.
On September 29, the world’s thirteen top banks including the Royal Bank of Canada and Toronto-Dominion Bank participated in a joint consortium led by fintech firm R3 to set up a framework for blockchain technology for different markets.
“Over decades, banks and other firms have built systems for themselves … and then a collection of processes has emerged between the banks … to make sure these systems are kept synchronized and are reconciled with each other,” said R3 CEO Richard Brown.
“With shared or distributed ledgers, perhaps we can imagine a world where participants share this infrastructure, so rather than everyone running their own systems that have to be reconciled, we can have … an open platform that multiple firms can connect to.”
Brown further announced the possibility of banks and financial organizations utilizing the blockchain technology to simplify transactions on a private blockchain, with restricted transparency.
Addressing the growing traction of the blockchain technology and Canadian banking giants’ interest in using the technology to transform banking systems, Scotiabank will most likely welcome several blockchain-focused startups that could help the bank create financial technologies applicable for its systems.