Ask Canadian bank chiefs to name the biggest challenge facing their industry today, and you'll likely get the same response: Disruption from technology companies offering mobile payments.
Bill Downe, Bank of Montreal's chief executive, highlighted the issue in his speech before shareholders on Tuesday, during the bank's annual general meeting.
Bharat Masrani, Toronto-Dominion Bank's chief executive, singled it out during TD's annual general meeting last week.
And David McKay, head of Royal Bank of Canada, provided some colourful insights into the challenge during an appearance in New York in early March.
The message? The big banks recognize the threat from companies such as Apple Inc. and Google Inc., who can push traditional banks to the sidelines when consumers opt to use smartphones to make payments. But the banks are not going to back down from the competition.
Here's how Mr. Downe put it in his prepared remarks: "Where our bank is focusing its energy is on a more serious risk that our industry, faced with growing demand for nimbler responses and more personalized interactions, could miscalculate the level of agility and innovation necessary to deliver on customers' high expectations."
Mr. Masrani was more direct, even as he refused to mention competitors, such as Apple, by name.
"New technologies are raising consumer expectations of what banks do – and how they do it," he said to TD shareholders. "And in many cases, they are being deployed by non-traditional entities to compete in the banking space."
TD, BMO and others have developed responses.
Mr. Downe pointed to the recent launch of BMO Mobile Cash, which allows customers to use their smartphones to withdraw cash from 750 BMO Harris Bank ATMs in the United States.
"This is the kind of news our customers will be seeing more and more, as we continue to differentiate BMO in a crowded marketplace," he said. "We're getting their attention by understanding how they want banking to be."
Mr. Masrani pointed to UGO Wallet, a mobile app backed by TD and PC Financial that gives consumers the ability to make credit card purchases by tapping their smartphones.
He noted that the bank is also developing so-called wearables and mobile technology that will allow consumers to manage their personal finances on the go.
But the banks are also deploying another strategy to head off the threat of disruptive technology from banking upstarts: They are making a big deal about trust.
In his New York appearance, Mr. McKay wondered aloud if consumers and merchants trusted the likes of Apple with their private information, relative to long-standing relationships with banks.
"Trust and security are our key assets," he said.
Already, some observers would seem to agree with his statement. Apple has received a lot of negative publicity for unusually high fraud rates in the early rollout of Apple Pay.
Although the issue is related to how consumers upload their personal information to their iPhones, a process that has now been beefed up, the snag has put a spotlight on trust.
Canadian banks may have another factor working for them as well: Regulations.
Mr. Masrani said regulatory oversight may be needed to "consider if the safety and soundness of these non-traditional players matter to the overall stability of our financial system. And, if so, whether they can deliver some financial services without adhering to the rules and regulations that protect the interests of consumers and the resiliency of the payment and financial systems."