‘Work space matters’: Inside Scotiabank’s Digital Factory

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Somewhere between the office bowling alley and the yoga studio, Bank of Nova Scotia is trying to disrupt itself.

On Thursday, the bank marked the official launch of its flagship Digital Factory, ‎a 70,000-square-foot startup-esque hub on Toronto's King Street East – modern, colourful and full of amenities like ping pong tables and a meeting room named after Andy Warhol.

The Factory, which opened its doors to the first staff in late November, has a growing roster of about 230 employees – many of them coders, designers and developers‎. It is one of five such hubs, and the lone one in Canada, with the others located in Mexico, Peru, Chile and Colombia, the bank's key international markets.

Canada's largest banks are facing new competition from small but agile financial technology companies, and shifting expectations from customers who are increasingly mobile and comfortable banking online, but many of whom haven't lost their desire for human contact when making bigger financial decisions.

When Scotiabank chief executive officer Brian Porter assumed the top job more than three years ago, "I knew we had a challenge, that banking in general had a challenge," he said Thursday.

And the Factories are an attempt to hack the problem. "Work space matters," he said. "This isn't just symbolism.

With 18,000 square feet of white board space, the office has fashioned itself after the office environment of technology startups – the sort of company it competes with for talent. ‎And it has imported the language of Silicon Valley – things are "ideated" and "iterated" in a "highly matrixed multidisciplinary environment." Everything must be as "frictionless" as possible, providing "Uber-like experiences."

Teams are also meant to work faster, eschewing the traditional large bank bureaucracies. In five weeks, four employees built a travel app called Aloha, with help from 18 test customers, to help travellers budget, check exchange rates, find nearby no-fee ATMS, or manage travel insurance from a smartphone.

There's a team experimenting with a banking chat bot named Scoti, and another focused on blockchain, the technology behind the digital currency Bitcoin. The latter group has created a private platform that makes digital building blocks to power many possible applications. Staff inside the building can buy cafeteria food with the swi‎pe of their hand, for example, using biometric sensors and the blockchain's virtual ledger to settle the bill.

"We're all-in, into blockchain," said vice-president of innovation Dubie Cunningham.

‎Ultimately, the suite of products that will actually make it to market – and onto consumers' phones – has yet to be seen. But the Toronto Factory is expected to grow to about 380 staff, and the hubs outside Canada will each have at least 100 people.

The goal is to "build once and deploy in many places," said Ignacio "Nacho" Deschamps, group head of international banking and digital transformation.