Jun 21 | 2017

What’s Happening in FinTech?

Posted by:

Top FinTech LearningsThe spring season brings a lot of activity to the financial services space in Canada. It’s one of the busiest times of the year for typical “money out” campaigns from our banks and coincides with strong activity in listings, transactions, and ultimately closings.

More recently the spring season has also come to signal the start of FinTech conference season across Canada. The size and scale of these events continue to grow while our own homegrown talent is taking center stage. With over 250+ FinTech companies across Canada and $1BN in cumulative venture capital investments, Canada is well on its way to solidifying itself as a global center for financial innovation.

As Head of Product at FCT, one of my primary responsibilities is understanding how the needs of our lenders are going to be changing over the next 3-5 years. Internally, we’ve been aggressively transforming our own product portfolio and expanding our focus on hybrid solutions that leverage the best of our financial technology, business process outsourcing (BPO) capabilities, and insurance expertise. As I have been working through the process of how we align our own product roadmaps to these opportunities, I wanted to share more broadly what I’ve learned on the conference circuit throughout the year.

Developments in FinTech

Opening up financial services data:

  • The European Union is already well ahead of North America when it comes to FinTech penetration. In an unusual role reversal, we actually see governments across the globe leading the charge to create an environment that is conducive to FinTech growth and innovation.
  • Initiatives like the European Union PSD2 open banking API, where by 2018 all lenders will be required to open up transactional data (with user permission) to enable third parties to build new types of financial services is one important example. While Canada is definitely lagging in this area, there are several opportunities to target key data as a starting point and use that information to re-engineer how financial services are delivered to customers across all segments.

While cash flow will always be king, managing identity in the digital age is close behind:

  • Online identity is the next cycle of the internet and as we see more and more digital lending platforms that don’t require in-person interaction, there is more of a need for identity management applications that simplify and perfect authentication/verification, early detection of fraud, and are adaptable.
  • Contextual commerce is the next major area of growth in the financial service space. This area deals with making payments through internet connected devices that are not a smartphone or laptop but rather devices like Amazon Echo, Google Home, Oculus Rift, and even your connected car. Thinking through the connected car example, how would you know the driver of the car is the right driver to offer a service?

Homegrown products will find greater product-market fit than global imports:

  • Canadian built and managed FinTech solutions will have the advantage over more global or regional efforts that try to ‘Canadianize.’ Rethinking financial solutions from the ground up will provide another advantage. The underlying point here is a true need to take a product-driven approach to building new financial services as opposed to a clone strategy from other markets.
  • For example, at FCT we believe understanding your customer segmentation in FinTech is critical. Existing companies overly rely on safety, security, legacy as the bread and butter of their solutions. Those features are table stakes but do not do enough in isolation to capture the wallets of the millennial, and eventually Gen Z segments. Great user interface and user experience, smart use of data, and transparency are at the top of the decision matrix for these segments and are causing radical reinvestments in technology talent across existing companies of all sizes.

This is the year of blockchain….or maybe its Ethereum… but it’s time to see RESULTS

  • By now everyone has heard of blockchain and the power of the underlying technology in financial services, but the conversation is FINALLY shifting to the business opportunities and that will be the catalyst for blockchain-infused products to gain traction. Experiments like Project ‘Jasper’ which is a Bank of Canada + Big 5 proof of concept with blockchain to reduce reconciliation efforts in payments systems are examples of the results and value of using distributed public networks.

We strongly believe that we are less than 12 months way from seeing the first mainstream pilot for tools like smart contracts and we are even bigger believers in the truly disruptive nature of these technologies.

I’m incredibly interested in your opinions and welcome comments. If you are passionate about thinking differently in the financial services space, I’d love to chat and can be reached at rlambert (at) fct dot com or through LinkedIn.

May 10 | 2017

How to Respond to the Transitioning Real Estate Industry

Posted by:

How to respond to the real estate industryDeath and taxes, according to Benjamin Franklin, were the only certainties in this world. For all his wit and wisdom, he missed one obvious thing – change.

As pioneers of the title insurance industry in Canada, FCT constantly responds to change with its own innovation. This ability to adapt is even more important in the current real estate market. New regulations are in effect that are throwing the market into chaos. That’s what this blog post will address – how to respond to change and chaos.

For the past year, we have interacted with some of the most compelling personalities in Canadian financial services. We went deep with ‎Fisgard Capital’s Hali Strundlund-Noble, our former president, Pat Chetcuti, Dominion Lending Centres’ Jay Seabrook and Paradigm’s Kathy Gregory—original minds all— and we like to think we got gold. Most of all, we discovered some remarkable commonalities.

Reflecting upon the shared intuitions from our trailblazers, this is what we learned:

1) It is important to stay resilient and responsive to ensure we can deal with business threats.

2) Intuition plays a key role in decision making – where intuition relies on and emotions and expertise-based analysis of data.

3) The benefits of adopting a startup strategy – rapid response, great team chemistry and staff retention.

That’s not all. Researchers have confirmed “that the more unstable an organization’s environment is, executives reported the reliance on their intuition, and their organizations’ performance was better than the industry average when they did so.”

Takeaway? Chaos is good. Instability inspires creativity and entrepreneurial behaviour. And, recognizing a good decision right now is better than a perfect decision next week. This is good because odds are we’re going to see more chaos this year—not necessarily more than usual but almost certainly in new forms.

So: the Canadian mortgage industry has cracks all over it—our trailblazers shared this truth time and time again.

Why? There are deficits in client education, in process innovation, and in responding to regulatory change. There are gaps when reading the fog that lies ahead. Or when there’s technological disruption that drives big banks into agile best practices. In addition, there is more potential disruption with upcoming regulatory changes, FinTech, blockchain, peer-to-peer lending among a myriad of allegiances for financial service businesses to navigate.

What’s going on in the industry?

  • Increased CMHC mortgage loan insurance premiums
  • More rigorous stress tests for property buyers
  • Capital gains reporting changes
  • Portfolio insurance changes
  • Tax on foreign buyers
  • Expanding rent control, and more

 

How will this play out? 

From broker to lender, people begin to worry. But as it turns out, worrying is actually good for us.

This year, the mortgage marketplace will reward not just those capable of seeing beyond the numbers to the stories beneath and then pivoting, but also to those who can use the anxiety.  And we all experience anxiety when change hits us right between the eyes.

Here’s the paradox.

It’s not the worrying that freezes us. It’s our inability to get past the moment the worry does freeze us. This is the moment when powerlessness wins and we’re no longer open. What freezes us is not surrendering to the anxiety—the paradox is that worry is actually doing something.

In fact, research shows that worry motivates us and makes us better planners. A crew of enterprising researchers looked at rumination and discovered that people who sat with their anxiety tended to have far higher verbal intelligence than those who don’t.

The ability to apply that intelligence is quite likely the recipe for success. And here’s how you can do that:

  • Use worry as a mindfulness tool: Worry is often based on expecting something to happen in the future. The cues of feeling the physical tension of worry or noticing that you’re spiraling into despair can bring you into the present. When worry surfaces, allow yourself a set time to stew in it, and then start a distracting activity.
  • Plan ahead: Essentially, worry helps to prepare us. Once we decide on the different actions we can take in various scenarios, the need to worry is eliminated. When you worry about a particular situation, balancing the negative with a positive action plan will help you set your fears aside.
  • Create a support system: Fear and worry can leave you feeling isolated. However, when we feel a sense of connection and support, our fears can be calmed. Based on the plan you create, build a support team to help you action your plan or just to share the worrisome moment with you and hold you accountable.

 

How are you responding to the changing real estate industry? Share it with us in the comments!

May 12 | 2016

25 years and counting . . . Why FCT’s decades of experience matter to you

Posted by:

16-187_FCT_Blog_Renzo_Exper_SquareAnyone working in this global marketplace knows that business today is characterized by relentless change. For a company to succeed, it needs to constantly adapt to stay relevant and innovative in order to add real value and meet customer needs.  After all, our success rests squarely on the shoulders of our customers’ success; customers we see as long-term, highly respected partners.

After more than two decades and thousands of commercial policies issued by our niche experts across the country, you can be rest assured FCT has your commercial needs covered. We’ve been listening to our customers since day one — listening so that we truly understand what they want in a partner. Our goal has always been to offer trusted solutions and support to help grow businesses and shape the future of the industry. And in this competitive insurance market, I can say without reservation that Experience Excellence® makes all the difference.

But why should our experience matter to you? I think that a quote I came across in an online marketing blog called Why “EXPERIENCE MATTERS” sums it up rather nicely:

“The nature of business is about constantly adapting to change and starting anew, but each time with deeper experience, greater knowledge, stronger relationships and more confidence.”

Although this particular blogger is writing about the benefits of experience in the world of marketing, the same holds true for any business, including the title insurance industry.

Having been a leader in the Canadian real estate industry since 1991, FCT is in a unique position to offer you unparalleled customized underwriting solutions. Plus, with experienced legal professionals on staff who combine in-depth title insurance knowledge together with years of hands-on real estate practice exposure, we can offer you a customer experience like no other in the industry. This experience and acumen equal confidence for you: confidence to move ahead with your commercial deal, regardless of the complexity, knowing you’re backed by a leader.

As we reflect on the last 25 years, can you think of a time when FCT provided you with a solution that closed a difficult deal? Feel free to comment below.