Trends Shaping Canada’s Financial Services Industry in 2023
If 2022 taught us anything, it was to expect the unexpected.
From changing market conditions to new and evolving technology innovations, the potential of emerging tools like OpenAI’s ChatGPT inside of our organizations and navigating the return to work, we faced a tremendous number of obstacles and opportunities. And yet, we came together as a team, and persevered. I continue to be blown away by the incredible resilience and innovative nature of our Canadian financial services customers.
While we have made a significant amount of progress, there is still much work to be done.
Financial services customers across Canada continue to face an increasingly complex operating environment with macroeconomic headwinds, stricter regulatory controls and traditional revenue sources becoming more challenging. These conditions are putting greater pressure on firms to reinvent business models and do more with less. However, legacy platforms, siloed information, limits on scale and data overload hinder their ability to deliver the best client experience, insights and tools.
While we cannot control the external forces that may impact our businesses, we can control how we respond, and organizations who stay the course on their digital transformation will be best equipped to face this uncertainty and react swiftly to challenges.
To be successful in 2023 and beyond, financial service organizations will need to focus (or continue focusing) on the following:
Data, AI and Machine Learning – Financial services is one of the most data-intense industries in the world. Effective use of this data to enable real-time business decision making and unlock new insights is critical to stay competitive.
Last year, TD Bank announced that it established an enterprise level data estate on Microsoft Azure to power access to high-quality, governed and secure data across the bank. This initiative has enhanced the data and analytics capabilities of the bank including new opportunities with AI and machine learning.
We also recently announced a 10-year strategic partnership with London Stock Exchange Group (LSEG) that combines LSEG’s business-critical solutions and data, analytics, and modeling expertise with Microsoft’s trusted Azure cloud platform and global reach, to deliver a new range of flexible services – enhancing how investors, traders and financial institutions collaborate, analyze and transact across capital markets. There is incredible potential when organizations harness the power of data to innovate and improve experiences for both customers and employees, and there is tremendous opportunity to reach new heights with AI and machine learning.
Healthcare of Ontario Pension Plan (HOOPP) is already working on an effective data strategy leveraging Microsoft Azure’s comprehensive data platform to inform decision making. By utilizing Azure Synapse Analytics, a limitless analytics service that brings together data integration, enterprise data warehousing, and big data analytics, the teams at HOOPP are able to access a safe and secure environment for a single source of data analytics to enable timely decisions and improve member services.
Cybersecurity – In such a heavily regulated environment where the privacy and security of client information is paramount, cybersecurity will remain a top priority in financial services. For digital banks, like Equitable Bank (EQB), this is especially important. Last year, when a cybersecurity test revealed weaknesses in its security defences, EQB took action. It replaced two security information and event management solutions with Microsoft Sentinel and deployed Microsoft 365 Defender solutions to cover endpoints, identities and cloud apps. After experiencing startlingly improved results from its second test, EQB knows it’s on the right track.
Digital Skills – Above all, organizations need digital talent to continue driving this innovation and growth. Microsoft is taking action to bridge the digital skills gap in Canada and forge new pathways towards inclusive economic growth and opportunities. Last summer, IGM Financial announced that it chose Microsoft Azure as a key provider of public cloud services to enable its digital infrastructure strategy. Through this collaboration, IGM is also leveraging Microsoft’s extensive suite of training programs and certifications to support and grow top talent at IGM. The result will be a resilient workforce capable of leveraging the Microsoft Cloud to digitize back-office operations, develop modernized practices and reinforce cybersecurity.
Most recently, First West Credit Union has partnered with HSO to use Microsoft Dynamics 365 as their new cloud-based customer relationship management platform. Dynamics 365 is Microsoft’s next-generation business application suite using the power of Microsoft Cloud for Financial Services, Microsoft 365, Microsoft Power Platform and Microsoft’s advanced intelligence tools.
Sustainability – Reversing the effects of climate change is the biggest challenge of our generation and we can only succeed if businesses and governments work together to find solutions. We also know that customers are demanding more of the businesses they work, and for many, organizations that operate sustainability and responsibly is table stakes. To enable their Environmental, Social, and Corporate Governance (ESG) priorities, financial institutions will need a modern scalable and trusted cloud platform.
Export Development Canada (BDC) is moving the vast majority of its internal datacenter capacity to the Azure cloud platform and plans to track internal metrics on its carbon impact goals using Microsoft Emissions Impact Dashboard and evaluate the results. By standardizing and unifying the organization on Azure and Microsoft 365, EDC is continuing to reduce its carbon footprint, while also improving its disaster recovery capabilities and even boosting employee productivity through its use of Microsoft Teams and other components of Microsoft 365, to build out tools and optimize its processes for collaboration.
Additionally, EDC’s implementation of Azure Databricks has the potential to help EDC track overall ESG metrics, capture insights, and support smarter, more sustainable business decisions that align with its ESG goals.
It is inspiring to see such rapid transformation across these Canadian organizations as they embrace the innovation needed to grow their business and confront today’s most pressing challenges. While uncertain times are ahead, it is this type of accelerated innovation that will ensure the agility needed for success, whatever the future may hold.
To learn more about how Microsoft is empowering the financial services industry, visit the resource below:
• Reimagine Banking with AI e-book: Learn about the benefits of AI in banking, use cases, and how it helps or organizations like yours become more agile and make smarter decisions so you stay competitive.
