Scotiabank adds technology talent with latest board appointment

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Canadian banks are adding technology talent to their boards of directors as they become increasingly serious about the threats and opportunities posed by financial technology, or fintech, firms.

Bank of Nova Scotia announced on Monday that it had appointed to its board Scott Bonham, a Canadian entrepreneur and venture capitalist with "deep connections" to Silicon Valley, according to the bank's release.

In 2000, Mr. Bonham co-founded GGV Capital, a venture capital firm with an office in Silicon Valley and assets under management that currently stand at $2.6-billion (U.S.). He is also a board member of the C100 Association, a non-profit organization that connects Canadian entrepreneurs with expatriate mentors working in Silicon Valley.

In other words, Mr. Bonham raises Scotiabank's profile among fintech entrepreneurs who might be interested in collaborating with the bank at a crucial time for the financial industry.

The Big Six, and their global peers, are boosting resources to develop better online and mobile banking capabilities as consumer expectations rise.

The banks are also responding to a potential threat: Startups and established technology companies could capture valuable market share, especially in areas such as loans and payments. Or, they could drive down costs with more efficient procedures, eroding bank profits if they are forced to become more competitive. According to a 2015 report by the consultancy McKinsey & Co., global banks could lose up to 60 per cent of their retail profits to fintech firms within the next decade, underlining the importance of a response.

Canadian banks have been taking the threats and opportunities seriously, largely by adding heft to their technology talent pools and leadership teams – and recognizing the importance of adapting to a shifting environment.

Last month, Canadian Imperial Bank of Commerce also tapped into Silicon Valley when it appointed Nanci Caldwell to its board of directors. She worked for about two decades at Hewlett-Packard Co. in Canada and the United States, before joining various software company boards in California.