Digital banking in Canada

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DIGITAL SURVEY
ON CANADA
Sukesh R

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ABSTRACT
Digitalization, as we call it today, is sweeping across every aspect of our daily lives in
all possible ways. The impact of digital technologies is prevalent in every spectrum of our
lives and consequently the current era is also termed as the “digital age”. The process of
digitalization started some five decades back with the advent of computing technologies and
digital electronics. Today digitalization can be seen as a tool of transformation which extends
beyond our lifestyle to the way we transact, interact and conduct business. Across all sectors,
be this communication, media, healthcare, retail and manufacturing, we are increasingly
seeing the use of digital technology. The landscape of this digital age is increasingly being
driven by innovations in e-communications, e-commerce and ever-increasing deployment of
the internet to create economies based on high technology, massive communication,
knowledge creation and innovation. It is important to understand and appreciate the factors
that are ushering in such changes and how these are impacting the modern-day business.
The aim of this study to understand the digitalization, progress of Canada in Digital
transformation and to get better insight about digital banking in Canada.

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1. INTRODUCTION
1.1 FOREWORD
We are living in a dynamic world where speed is of essence and transformation is the
key to success. From the flickering monochromatic images that appeared first on the
television sets of 1930’s to the 3D Hi Definition images in a modern day ultrathin LED
display television, the world that we live in has seen changes driven by innovation. The
impact of digital technologies is prevalent in every spectrum of our lives and consequently
the current era is also termed as the “digital age”. Digitalization is the use of digital
technologies to change a business model and provide new revenue and value-producing
opportunities; it is the process of moving to a digital business. The proliferation of digital
technologies over the past two decades hasbeen substantial, marking one of histories most
rapid rates of adoption ofnew technologies. Digitalization is transforming business
landscapes and the world of work, and redefining theboundaries of production, consumption
and distribution. This has created tremendous opportunities, as new products, processes and
techniques have emerged. Technology-driven innovations aretransforming both
manufacturing and services sectors through the increasing incorporation of
artificialintelligence and automated systems (online platforms, robotics, machine learning,
big data, etc.)
Some countries like United States, Japan, Canada, Australia, Russia, etc., were
already adoptedthese technological transformations in all the sector. Canada is in the notable
position with the sound digital economy. Canada has higher degrees of digitaldensity are
related to better economicPerformance.Canada’s success is builton institutions, behaviors and
attitudestowards digital change as much as hard infrastructure. Canadian business models are
characterizedby an openness to new digital innovations,firms generally have a clear strategy
fordigital progress, R&D spending is high andfirms score above-average in their embraceof
new ‘technology processes’.
Canada offers digitally transformed and one of the safest banking systems in the
world, ranking as the world's soundest banking system for the past six years according to
reports by the World Economic Forum. Digitization gives banks the opportunity to take
customer service to the next level atthe same time as offering the possibility for much higher
automation and related costefficiencies. The digitalization process in Banking is helps to
overcome outdated approaches and mismanaged relationships. Canadian banks are actively
pushing digital topics both internally and externally.
In this Study we are going to look behind the scenes of Digitalization in Canada
especially in Banking sector. Also, this study focused on the recent trends and challenges in
Canadian Digital Banking movement.
1.2 SCOPE OF THE STUDY
This a study aims to provide a clear view of digitalization process. The effort is made
to understand the various dimensions of digitalization in various sectors of Canada. A
detailed study made to find out the strategies taken by the Canadian government to drive the
Canada to the digital transformation cycle especially in banking sector. The study provides

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clear insight of the digital evolution of Canadian banking sector. Also, this study aims to
identify the challenges or obstacles for the digitalization of Canada. Overall the study aims to
find out the digitalization progress and road map to digitalization of the Canada.
1.3 EVOLUTION OF DIGITALIZATION
The process of digitalization started some five decades back with the advent of
computing technologies and digital electronics. Today digitalization can be seen as a tool of
transformation which extends beyond our lifestyle to the way we transact, interact and
conduct business. Across all sectors, be this communication, media, healthcare, retail and
manufacturing, we are increasingly seeing the use of digital technology.
Digital revolution is the backbone of economic, technological, and social prosperity
after the industrial revolution. It is driven by high-speed Internet connectivity and innovative
products and services. The transistor which was invented in 1947 paved the way for digital
revolution. Advanced computers helped the government, military andother organizations to
solve critical problems efficiently. The creation of World Wide Web helped revolutionize
thecommunication systems and made internet an essential part of every business. The
medium of communication haschanged rapidly and mobile communication has become an
inevitable part of life. The internet users rose as mobiledevices enabled easy and faster
connectivity. Instant messengers and chatrooms replaced the voice communicationwhile e-
commerce is bringing a paradigm shift in the way people shop. We are now getting into the
era of Internetof Things and Augmented Reality.New technologies based on mobile
connectivity, social media, cloud computing and big data are leading the way, driving
efficiency and productivity.
Fig 1.3. Evolution of Digital Movement
The first wave of emancipation (the rise of digital) made it much easier to create and
produce (mainly digital) products and/or services.

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The second wave (the Internet) led to the disappearance of physical borders and time
zones, enabling the potential for any smart solution to become a worldwide success. Yet as
many experienced during the first decade of the Internet, being globally available was no
guarantee for success. Most new initiatives never made a blip on the global radar and died
once the ventures ran out of money.
The third wave (social media) changed the ownership of the distribution of headlines
and opinions. Suddenly we could all become gatekeepers of interesting stuff. Social media
distribution of new ideas and start-ups paved the way for a whole new generation of mean-
and-lean companies that found international recognition, distribution or even funding.
The fourth wave (mobile) is accelerating everything even more. It reduces the time
between impulse and response from hours or even days to minutes or seconds. The moment
something good (or bad) happens, it starts spreading around the world instantly.
The combination of all of these waves of emancipation has created new ways of
thinking about the world. We have evolved from a situation in which scarcity dominated
market position and business models (keeping prices artificially high) towards a model of
abundance.
Digitalization is the process of moving to become a digital business, realize a digital
workplace, creating a digital supply chain, etc,. Rapid advances in digital technologies are
affecting almost every aspect of the Canadian economy. Thedigital economy is becoming
increasingly intertwined with sectors such as media (e.g., ad-supportedcontent providers),
banking (fin-tech), retail (e-commerce), energy, transportation (e.g., self-drivingcars) and
health (electronic records, digital health solutions), as well as entertainment and
socialinteractions (social networks, online gaming, streaming services). Digitalnetworking
and communication has led to the emergence of new business models and strategies
andallows firms, consumers and governments alike to interact, communicate and seek
information fromEverywhere. Overall, Canada is well positioned to have a flourishing
Digitalized sectors due notably to its highly educatedworkforce, favorable business climate
and political stability. Digital technologies and applications contribute to the economic
strength, societal well-being, and effective governance of a nation.
The digital revolution is disrupting the relationships between the banks and their
clients and the new feature continuously appear to enhance the customer experience.
“Digital” is the new buzz word in the banking sector, with banks all around the globe shifting
towards digitalization. Banks of all sizes and across all regions are making huge investments
in digital initiatives in order to maintain a competitive edge and deliver the maximum to its
customers. Additionally, digitalization leads to robust data analytics and intelligence, which
helps banks get closer to customers and close inon competition.
1.4 HISTORY OF DIGITALIZATION
Ones and zeros are eating the world. The creating, keeping, communicating, and
consuming of information are all being digitized, turned into the universal language of
computers. All types of enterprises, from small businesses to large corporations to non-profits

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to government agencies, are going through a “digital transformation,” turning digitization
into new processes, activities, and transactions.
Behind the great potential of the digital technology lies Industry 4.0, the fourth
industrial revolution. A transformation in production and automation was brought on first by
steam and water power (Industry 1.0), then by electrification (2.0), and more recently by the
digital computer (3.0). Industry 4.0, digitization, is about companies orienting themselves to
the customer through e-commerce, digital marketing, social media, and the customer
experience. Ultimately, virtually every aspect of business will be transformed through the
vertical integration of research and development, manufacturing, marketing and sales, and
other internal operations, and new business models based on these advances. In effect, we are
evolving toward the complete digital ecosystem.
This ecosystem will be based on full implementation of a wide range of digital
technologies — the cloud, big data, the Internet of Things, 3D printing, augmented reality,
and others. Together, they are enabling new business models, the digitization of products and
services, and the digitization and integration of every link in a company’s value chain: the
digital workplace, product development and innovation, engineering and manufacturing,
distribution, and digital sales channels and customer relationship management.
From the 1950s on, with a distinct bounce in the 1990s due to the advent of the Web,
digitization has changed the way we work, shop, bank, travel, educate, govern, manage our
health, and enjoy life.
Fig 1.4 : The long road to Industry 4.0
In business, digitalization most often refers to enabling, improving and/or
transforming business operations and/or business functions and/or business models/processes
and/or activities, by leveraging digital technologies and a broader use and context of digitized
data, turned into actionable, knowledge, with a specific benefit in mind.
When Government of Canada services began to be migrated online in the late 1990s
and early 2000s, Canada was seen as a world leader. In 2000, Canada was a digital leader,
ranking at the top of almost every indicator by which one would measure a digital economy.
But Canada failed to use the advantage of it. Organizational size, scope of change and
complexity of delivery have been identified as factors that slowed government efforts to

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modernize service delivery, adapt to changing priorities and expectations, and take full
advantage of the opportunities afforded by improved digital technologies and tools.
The Government of Canada launched the Government Digital Service (GDS) in 2011
to make services simpler, faster, clearer and digital by default.
In 2009 as part of Canada’s Economic Action Plan, $225 million wasprovided to
develop and implement a strategy to extend broadband coverage toas many unserved and
underserved households as possible. The main tool foraccomplishing this goal was the
Broadband Canada: Connecting RuralCanadians program.
In 2012, leaders from the public and private sectors in Canada came together to
createthe Digital Identification and Authentication Council of Canada (DIACC). With a
vision to enable trusted online relationships for Canadians, DIACCmembers are focused on
working together to develop arobust, secure, scalable and privacy-enhancing
digitalidentification and authentication ecosystem that meetsthe needs of all stakeholders.
In 2014, Government of Canada took an initiative to open the doors of digital world,
which named as Digital Canada 150. Digital Canada 150 is a Federal Government strategy
for Canada'sdigital future. It is designed to be flexible and open, adjusting to changing times
and responsive to newdevelopments. It is also designed to ensure that Canadians not only
benefit from the digitalrevolution but also are among its leaders. It is based on 5 pillars called
connecting Canadians, protecting Canadians, economic opportunities, digital government and
Canadian content.
1.4.1 Digitalization Status reports
The rapidly changing technology has lately become a permanent feature of all
economies. From 3D-printing, robotics, and neuro-technology to digital-currencies and e-
participation, the landscape of current capabilities and future prospects for businesses but also
for countries is shifting. Governments around the world areinvesting on their digital
economy. However, digital technology also needs to be implemented and further explored in
order to improve efficiency and, therefore, the range and quality of services provided to
citizens and businesses. In response to the need of decision makers to assess the capacity and
readiness of a country to make the mostof the digital transformation, the IMD World

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Competitiveness Center is introduced the IMD World Digital Competitiveness Ranking.
Fig 1.4.1: World Digital Competitiveness Ranking
The new Ranking provides a measure of a country’s ability to adopt and explore
digital technologies leading to transformation in government practices, business models, and
society in general. In this IMD digital competitiveness ranking Canada captured 9th
place.
1.4.2 Digital Country Index
The Digital Country Index compiles the total number of searches performed by all
worldwide citizens toward any given country. Canada is the big winner of the Digital
Country Index 2017.

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Fig 1.4.2 : Digital Country Index 2017
Canada is currently in the 5th place and is the only country within the Top 5 which
has managed to improve its performance in all of the five dimensions of Digital Country
Index 2017.

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2. UNDERSTANDING DIGITALIZATION
There are four distinct stages of digitization development: constrained, emerging,
transitional, and advanced. These groupings will allow policymakers to recognize their
nation’s current level of digitization and provide perspective on how to progress.
Fig 2. Digitalization Levels
As per the Global Insight; UN; report Canada is in the advance digitalization level with more
than 60 points.
2.1 CONSTRAINS STAGE DIGITALIZATION
For many years now, the buzz in government has been around digital transformation.
A technological metamorphosis is a must for any government, so as to deliver greater value
to its citizens. But this change, even though it has been proclaimed for many years, and in
different quarters within government, has been one that was met with great resistance.
This digital change is not a one-time change though. It is a transformation that must
be ongoing. As innovation continues to grow and evolve, so must digital transformation. It is
about transitioning with the new technology, accepting updates, learning to embrace new
ways of doing things to better serve the overall goals of an organization.

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Fig 2.1.1. Major Constrains in Digitalization
• Legacy processes, policies, regulatory models and IT systems that inhibit information
sharing, data driven decision-making, automation, consolidation and modernization.
• Leadership and culture that values status quo and resists risk taking, exploration of
new business models and collaboration opportunities across the organization.
• Outdated skills and challenges with recruiting and retaining the requisite talent to
drive digital transformation along with the perceived need to “compete” with the
private sector for talent as opposed to an emphasis on partnerships.
• Lack of strategic alignment on digital across the government, its complex network of
stakeholders, partners and clients with disparate and fragmented projects operating in
a silo fashion.
• Focus on reducing costs to meet budgetary constraints as opposed to creating rich,
citizen-centric experiences and leveraging automation to drive operational
efficiencies.

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Fig 2.1.2 .The Canadian Chamber of Commerce & ICT Adoption Survey Results, 2017
Among the obstacles preventing the survey respondents from using the Internet for their
business are technical barriers (too many software updates, technology becoming obsolete
quickly), lack of technical knowledge, costs of IT professionals and the application and costs
associated with CASL. Many of the businesses surveyed would like to upgrade their
networks
One of the major constrain in digitalization is skill gap. Principle reason for this is the
lack of skilled workers who can assess and implement technological innovations. As the
workplace becomes more digital, the requisite skills for a successful worker are evolving. In
this dynamic environment, every professional needs to be comfortable with both digital
technologies and business processes. If organizations do not have employees with these
critical skills, they put the brakes on making the digital switch and miss out on the
productivity, innovation, and new revenue opportunities offered by technological
innovations. Several global studies indicate that Canada has a moderate skills gap; however,
the highest pressure on the labour market stems from talent mismatches. Similarly, ICTC‘s
primary data in 2014 indicates that 34% of Canadian employers reported some difficulty in
filling various ICT positions due to skills mismatch.
2.2 EMERGING STAGE IN DIGITALIZATION
This stage largely has addressed the affordability challenge and have achieved
significant. progress in providing affordable and widespread access. However, the reliability
of services in emerging digitization nations remains below par and capacity is limited. One of
the major constrain in the emerging stage of digitalization is skill gap. Principle reason for
this is the lack of skilled workers who can assess and implement technological innovations.
As the workplace becomes more digital, the requisite skills for a successful worker are
evolving.

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Canadian government takes several initiatives to digital transformation. Government
also launched Digital Canada 150 program to move the next level in digitalization.
Government took seven trends to move forward in digital path.
2.2.1 Seven Trends Canadian Digital Government
Digital-first mindset: Thinking digital first lies at the heart of faster and better
service delivery. Some of the things citizens want are consolidated IDs, digitally available
permits and information, as well as digital applications and approvals.
Mobile now: Citizens want to use their mobile devices to access services on the go,
from submitting applications to accessing information. A mobile government provides
localized services that add value to the user, such as sending road condition updates or
creating a specialized mobile app that allows users to prepare for their driver’s licence test.
Full integration with online services is key for a seamless citizen experience.
Omni channel: Citizens are used to accessing services on any device at any time. By
enhancing multi-channel capabilities, governments can provide services through various
channels, including mobile, website, branch, phone and even watches. Applications can be
started and fulfilled on different channels. This approach also helps foster trust and encourage
digital adoption.
Unlock data possibilities: Citizens are willing to share their tombstone data across
ministries and levels of government to get customized services. Governments can use
customer data and public service metrics to make better decisions and spend time where it
matters by providing the right services to the right people at the right time.
Tracking & transparency: Citizens are demanding to stay informed about the
performance of government services, and they also want to know the status of their personal
applications and permits on the go. Allowing access to this information will increase
transparency and improve service delivery. It will also reduce citizens’ calls and visits.
Cybersecurity & privacy: Governments have critical information on their servers,
and the amount of information will continue to grow in the digital world. Today, risk is
increasing and cyber-attack incidents are becoming more frequent. Protecting data and
reassuring citizens that their data is secure are critical and will help enhance trust across your
network.
Efficiency is key: To give citizens the digital and quality service delivery they’re
looking for, operational excellence and efficiency are key, supported by the right
technological tools. Realize your potential by focusing your investments on the right
capabilities that fuel growth.
2.3 TRANSLATIONAL STAGE OF DIGITALIZATION
Transitional is the next digitization stage, encompassing those countries with a
digitization score in the range of 30 to 40. Countries in the transitional stage have addressed
the reliability challenge and provide citizens with access to ubiquitous, affordable, and

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reasonably reliable services. Alongside their jump in reliability, transitional countries show
minor advances in the speed, usability, and skill indexes.
Canada faces a challenges of skill gap in this stage. Widespread of internet usage is
also another problem which is faced by Canada during the period 2007-2012. The digital
literacy rated was comparative lower than 60%. Small business faces insufficient financial
problem during the translational stage.
Digital transformation reshapes every aspect of a business. Digital technologies are
transforming the way we live, work, consume and produce goods and services. The emerging
technologies include cloud computing, Quantum Computing, the Internet of Things,
advanced robotics, advanced analytics (including big data, artificial intelligence (AI) and
machine learning), biotechnology, social media, three-dimensional (3D) printing, augmented
and virtual reality, Human-Computer Interfaces (AR, VR etc), Digital IDs/Biometrics,
broadband Internet, Block chain / Crypto currencies, and wireless mobility.
Innovation cycle for new technologies has become shorter and new technologies have been
constantly changing how businesses operate. This change is often too fast. Digital literacy
and digital skills that have become part and parcel of a modern day working professional are
closely connected with these recently emerged technologies:
Digital platforms: Digital platforms include social media (e.g. Twitter, Facebook, and
LinkedIn), user generated dynamic platforms (e.g. YouTube), curated content sources
(Pinterest, Instagram or SlideShare) and meeting applications (e.g. WebEx, GoToMeeting).
Apps and services: Canadian app enterprises generate nearly $2 billion annually in revenues.
Approximately 65,000 Canadians are employed directly and indirectly because of app
adoption. This figure is expected to exceed 110,000 by 2020 as app enterprises generate in
excess of $5.2 billion in revenue annually.
Cloud: Extrapolating from ICTC’s 2013 cloud study, well over 50,000 Canadians are
employed as a result of cloud computing. Half of Canadian enterprises already adopt
identifiable cloud services (a figure as high as threequarters for ICT firms), with nearly two-
thirds reporting a reduction in expenses as a result of cloud adoption.
Mobile: ICTC has shown that Canada’s GDP grows 0.08% for every 1% increase in mobile
technology adoption due to increased productivity. GDP grows an additional 0.069% for
every 1% increase in wireless subscriptions due to higher subscription revenues of
telecommunication service providers. Since these are incremental to each other, every 1%
increase in mobile adoption yields 0.149% to the economy. Assuming a national GDP figure
of $1.649 trillion in November 2015, Canada’s GDP grows by $2.46 billion for every 1%
increase in mobile adoption ($1.649 trillion x 0.00149%).
Data analytics: Canada’s data analytics market generates approximately $1.1 billion
annually in revenues, excluding many of the large multinational firms operating within the
country. This figure is expected to exceed $1.8 billion in 2020. Direct employment in
Canada’s big data market reached 33,600 in 2016 and is expected to exceed 43,000 by 2020.
2.3.1 Emerging technology investment trends

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During the translational stage There are heavy investments are done on the recent
technologies.
Fig 2.3.1 Investment Trends
92% of Canadian vs. 47% of global executives say Internet of Things will be most
important to cutting costs, followed by robotics at 15% (18% globally). As it stands, the most
meaningful investments in emerging technology today are flowing to IoT and AI. Over the
next three years, growth is expected across a broader spectrum of technologies, with robotics,
AR and drone technologies poised for the greatest near-term growth. As far as disruption
goes, 28% of Canadian executives say AI will shake up their industries and businesses over
the next five years. And IoT (52%) and robotics (15%) are seen as holding the most potential
to cut costs.
2.4 ADVANCED
It is the most mature stage of digitization, achieved with a score greater than 40.
These countries have made significant strides in addressing ICT usability and developing a
talent base to take advantage of available technologies, products, and services while
improving the speed and quality of digital services.
Advances in advanced manufacturing, robotics, cyber security, intelligent retail,
connected transportation, smart cities, financial technology, clean technology, biotechnology
and eHealth are expected to lead to profound shifts in the ways businesses operate, as well as
in the skills profiles of Canadians.
Canadian Government adopt the following technologies and support the finance,
industrial, education, health care, etc., sectors to move on with digitalization technologies for
delivering open and transparent government.

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The Internet of Things (IoT) refers to physical devices (also called “smart” or
“connected” devices) that connect to each other via the internet. They collect and exchange
information with one another and with us. Smart devices can be remotely controlled and
monitored, or work automatically, through a variety of software, cameras and sensors. There
are many types of smart devices, and more emerging every day. The Internet of Things brings
new capabilities to Canadian households, driving the continued increase in consumer
spending on connected devices and entertainment options. These solutions create new
revenue streams across a variety of market sectors.
"70% of Canadian medium-sized and large organizations report adopting at least one Internet
of Things solution already. This indicates how the IoT market is rapidly being integrated into
today's businesses.
Fig 2.4.1 Internet of Things in Canada (2013 vs 2018)
International Data Corporation (IDC) expects there will be 114 million IoT
connections in Canada by 2018. The research company also estimates that the IoT market
will be worth CA$7.2 billion ($6.5 billion) by 2018, representing a compound annual growth
rate (CAGR) of 18% from 2013 to 2018.
Block Chain Technology: Originally, blockchain technology aimed to serve merely
as the basis for Bitcoin, the world’s first digital currency. Since then, however, blockchain far
surpassed its original purpose and found a wide variety of uses in the world outside of
fintech. Blockchain emerged in 2009 as the system underpinning the cryptocurrency bitcoin,
allowing people to quickly and anonymously exchange electronic currency.
Canada is currently home to one of the world’s largest research organizations
dedicated to blockchain technology. The Blockchain Research Institute is stationed in
Toronto and is actively investigating real-world applications for blockchain technology. This
movement marks an important step forward for the technology and a commitment by the
Government to support emerging Canadian innovation.
Blockchain is a distributed ledger in which anything of value can be stored, ranging
from money, stocks, bonds and intellectual property, to votes, art, music, loyalty points,

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carbon credits, health-care records and student accomplishments. Currently Royal Bank of
Canada is experimenting the block chain technology in its payment systems.
Cloud Computing and Big Data: Organizations in Canada are undergoing
revolutionary changes in the ways they build their business strategies with the advent of
increased mobile technology, cloud computing, and data analytics. In its first decade, cloud
computing was disruptive to IT, but looking into the second decade, it is becoming mature
and an expected part of most disruptions. For the past 10 years, cloud computing changed the
expectations and capabilities of the IT department, but now it is a necessary catalyst for
innovation across the company.
Advanced Robotics: Robotics is a disruptive technology that is playing an
increasingly important role in the manufacturing industry. Canada have the right environment
– an ideal blend of industrial and consumer markets, supply chain clusters, and academia and
research institutions – for robotics and automation companies to flourish. Broadly speaking,
there are six main areas of focus in robotics: space exploration, manufacturing, surgery,
personal service, research, and law enforcement or military defense. In two of these areas –
manufacturing and personal service – our country is not among the global leaders and may
not make up ground. According to IFR statistics, the first and second largest markets for
robotics amongst Canadian manufacturers are the automotive industry (80% of 2017).
Canada established Canadian Robotic strategy group on 2014. The Canadian Robotics
Strategy group is a community of people from across Canada who support the development
and growth of the Canadian robotics ecosystem. Using the Canadian Occupation Projection
System (COPS), we discovered that the occupations with the lowest risk of automation are
projected to produce nearly 712,000 net new jobs between 2014 and 2024. Canada is home to
a small, innovative cluster of industrial automation companies that generate approximately $2
billion annually in revenues from Canadian and international sources.
Exploring digital innovation
54% of Canadian vs. 43% of global organizations has a dedicated team for digital
innovation. While Canadians say they’re doing a lot with digital, they’re often hesitant to
move ahead boldly in terms of innovation. In addition, Canadian firms rely heavily on
industry analysts (82% vs. 78%) and competitive intelligence (76% vs. 69%) instead of
taking innovation into their own hands by engaging with open-source (8% vs. 17%) or maker
(4% vs. 11%) communities.

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3. DIGITALIZATION STRATEGY
Digitalization goes beyond the technical process of digitization. Digitization means
encoding various types of analog information in digital format and then processing digital
information using pre-programmed instructions. In digitalization, innovation comes not only
from this digitization of phones, cars or books. It is a much broader change of organizing
logic in multiple industries and marketplaces that become connected through a common
digital infrastructure.
Digital Strategies represent an integration of business and technology plans in an
organization. The Government of Canada is addressing this need by developing a digital
research infrastructure (DRI) strategy that will enhance the country's ability to employ digital
resources across all areas of research and will advance the Digital Canada 150 plan. Over 20
years, Canada has developed a DRI ecosystem that has made notable advances, such as
developing a world-class national high-speed backbone network and offering researchers
access to a range of advanced research computing resources.
From the CFI’s perspective, there are seven essential attributes of a national high-
performing DRI ecosystem: integrated, inclusive, sustainable, comprehensive, accessible,
user-centric and adaptable. It should also respond to the needs and priorities, existing and
emerging, of the Canadian research community and have robust governance and
management, and predictable multi-year funding.
In general, digitalization is seen as the road of moving towards digital business and
digital transformation, as well as the creation of new – digital – revenue streams and offerings
while doing so. And that requires change.
Fig 3. Digitalization strategy

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3.1 DIGITAL CANADA 150
As a part digitalization strategy government created Digital Canada 150 (DC150)—a
comprehensive plan to provide all Canadians with the digital skills and the tools required for
the future. Digital Canada 150 sets clear goals of what Canada can achieve by the time we
celebrate our 150th birthday in 2017. There are five pillars, 39 new initiatives and one
national plan for 35 million Canadians. That was underscored by five key pillars:
Fig 3.1.1 Five pillars of Digital Canada
Connecting Canadians: Connecting Canadians is about ensuring all Canadians, no
matter where they live, have access to high-speed Internet services at the most affordable
prices. It is also about offering Canadians more choice in their cellphone provider and the
option to pick and choose the combination of television channels they want. Make high speed
internet services of at least 5 Mbps available to 98% of Canadian households. From the
launch of Connecting Canadians in summer 2014 until 2017, the Government of Canada will
invest up to $185 million over five years to extend high-speed Internet service to356,000
households in rural and remote regions of the country that currently have slower or no
Internet access. This means more Canadians will be able to connect with their teachers,
doctors and families across the country as well as realize economic opportunities. These
services all require large amounts of data to be transferred quickly.
In Canada’s 2016 Communications Monitoring Report, the CRTC, Canada’s
telecommunications and broadcasting regulator, stated that broadband is available to more
than 99% of Canadian households.
Protecting Canadians: In keeping with Canada’s place in the world as a leading
cybernation, the Government has put in place a privacy and protection framework to ensure
that Canadians can confidentially participate in the digital economy. Going forward, the
Government will build on its successes in tackling cyber bullying, combating malicious
online activity and enhancing privacy to ensure Canadians and their personal information are
protected. New laws and national strategies to protect citizen privacy and safe guard against

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cyber bullying and other online threats. In 2014 Canada implemented one of the Strongest
anti-spam laws in the world, CASL.
Economic Opportunities: Funding for digital entrepreneurs through the Business
Development Bank of Canada and the Canada Accelerator and Incubator Program. To
harness the limitless potential of an interconnected global economy, Canadian companies and
consumers need to be able to access advice and support to make the best use of digital
technology when doing business. Canada Government helps to make that possible by
supporting businesses through new investments and streamlined regulatory requirements,
promoting cutting-edge research into new technologies, and providing Canadians with
opportunities to acquire in-demand digital knowledge and skills, thereby helping to stimulate
Canada’s economy.
Digital Government: The Government of Canada is a leader in using digital
technologies to interact with Canadians making it simpler and quicker to access services and
information online. The Government introduced a new log-in approach for government
services that respects privacy and provides clients with choice and convenience when
accessing secure online services. Government launched Canada.ca, which consolidates 1,500
individual Government of Canada department and agency websites, making it easier for
Canadians to find and access information and services online. The Canadian Open Data
Experience (CODE) was a nationwide 48hour Hackathon to build the best apps utilizing data
from Canada's Open Government portal (canadianopendataexperience.ca).
Under this Digital government plan government expanded the following facilities.
Fig3.1.2 Facilities established under Digital Government Plan
Canadian Content: Ensure Canadians have easy online access to Canadian content
that will celebrate their history, arts and culture. The Memory Project
(thememoryproject.com). Recognizing that arts, culture and heritage are more important than
ever in a multilingual, multinational era of instant online communication, the Government
has bolstered support for Canadian history and voices on digital distribution networks.

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4. DIGITAL TRANSFORMATION
In an increasingly connected global environment, digital technologies have become
significant drivers of productivity, innovation and competitiveness in every sector of the
Canadian economy. In the next 3-5 years, the adoption of smart and connected technologies,
such as the Internet of Things (IoT), will continuously reshape all aspects of the economy,
including manufacturing, financial services, health, transportation, essential services and
cities, as well as media and creative industries. Additionally, Canada‘s entrepreneurial
capacity is creating new digital innovations and industries, which are in turn driving
economic growth and social development.
Canada’s total digital population is 29.4 million and Growing. Canada’s digital
economy contributes more than $70 billion annually to GDP. Canadians are enthusiastically
adopting all types of digital technologies and services to improve how we work and live.
Mobile devices, mobile apps and cloud-based services are just a few recent developments that
promise to transform the way entire industries do business.
Technological innovations are modifying business models through virtualization of
operating systems and digitalization of key business processes, such as marketing, commerce,
production, customer service, communication, and more. These technological innovations
transcend all economic sectors and reach almost every organization in Canada.
Digital transformation is being talked about as the next Industrial Revolution. It is the
means that will change business models, products, services and experiences that will not only
impact organizations and governments but society as a whole.
While digital transformation is mainly about operational efficiency today, the
revolution that is germinating will have greater effects in the future. Digital transformation is
vitally needed for the survival of society.
There are 6 major principle to adopt digitalization.
Client centricity: Client centricity has two parts in a digital transformation: a focus
on the customer experience coupled with an in-depth examination of the role of branches.
Three quarters of our respondents say understanding customer experience is essential to
implementing digital into their organizations.
Openness to innovation: Digital teams with a mix of IT and marketing—in other
words both internal and external know-how—can help produce concrete innovations that are
ready for client use. Integrating IT and marketing is the essence of the digital age, as it seeks
to create an agile organization that merges client needs with solution delivery to deliver new
services as quickly as possible.

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Fig 4 Digital transformation strategy
Organizational flexibility: Technological and organizational agility is crucial for
banks. An agile IT platform is central to the digitization of banking operating models. The
proliferation of new technologies and the faster time-to-market call for a fundamentally
flexible IT platform that is able to integrate external cloud services.
4.1 THE ROADMAP TO TRANSFORM
The Journey to “Canadian Government’s Digital Transformation" examined the
digital technology’s ability to fundamentally transform the way the public sector operates and
delivers services to customers and offers strategies for government leaders to accelerate the
rate of their progress.
As part of its digital transformation strategy in helping organizations begin their
journey, Canadian Government has pinpointed four key focus areas.
These are core drivers for the Canadian digital transformational journey.
Fig 4.1 Core drivers for the Canadian digital transformational journey
The first area is to engage citizens. Engaging citizens through mobile services can
enable governments to better understand citizen needs and how to satisfy it. This requires

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governments to sanction mobile citizen services and interacting with citizens on secure
mobile government platforms.
Next is to empower government workers. It is about providing the infrastructure for
public servants to collaborate and increase productivity through mobile platforms.
Another key area to focus on is to optimize government operations. With a trusted
cloud service and solution, governments can increase operating efficiencies and cost savings.
Transform services is the last core area in roadmap to achieve digital transformation.
The vast amount of data collected by being digitalized can be used to create actionable
analysis, insights and aid in better decision making.
These are the core pillars which are applied by Canadian government in their digital
transformation, it often results in many fantastic and innovative ideas that enable greater
citizen engagement, productivity, cost efficiency, better insights into data and boost service.
Implementing successful public sector digital transformation is a journey that begins
with understanding citizens’ current needs and is a never-ending pursuit of innovation to
adapt and predict evolving needs.
All levels of Canadian government have made a strong commitment to digital
transformation. The Government of Ontario, under the “Digital Government Action Plan”
and as part of its “Digital First” initiative has committed to creating citizen-centric, digital-
by-default experiences by fostering open innovation and experimentation.
4.2 DIGITAL ADOPTION RATE IN CANADA
Technological innovations are modifying business models through virtualization of
operating systems and digitalization of key business processes, such as marketing, commerce,
production, customer service, communication, and more. These technological innovations
transcend all economic sectors and reach almost every organization in Canada. The economic
and business benefits of technology adoption are well understood by organizations of all
sizes, including small to medium size enterprises (SMEs).
Despite the importance of technology adoption to business sector innovation and
competitiveness, Canada‘s adoption rate remains low compared to other international
counterparts. One of the principal reasons for this is the lack of skilled workers who can
assess and implement technological innovations. As the workplace becomes more digital, the
requisite skills for a successful worker are evolving. In this dynamic environment, every
professional needs to be comfortable with both digital technologies and business processes.

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Fig4.2.1 : Types of technology platforms utilized by canadian digital adopters
Digital technologies such as e-learning tools, enterprises resource planning (ERP), e-
commerce applications, and desktop virtualization are gradually becoming more
commonplace amongst these digital adopters.
Most sectors in Canada, such as ICT, government, finance, healthcare, manufacturing,
professional services and others have already embraced digital technologies. Amongst
companies that have (self-reported) adopted digital technologies, application software is the
most commonly adopted technology/platform (80%) followed by cloud-based services
(74%), mobile technologies and data analytics tools (70%), social media (62%), and
Customer Relationship Management (CRM) tools (60%)
Fig4.2.2 : Technology adoption benefits among Canadian digital adopters
Digital technologies are changing the way companies do business, resulting in quick
and easily accessible data and communications, information consistency, responsive case
management and seamless information exchanges. In ICTC‘s in depth consultation with
Canadian businesses and adopters of technology, four out of five (81%) of adopters reported

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that digital technologies improved business productivity, enabled employees to work smarter
and utilized time more efficiently; 66% reported decreased production costs; and 40%
reported increased market share among other competitors (i.e., increased sales and/or profits).
48% of adopters reported, digital adoption also helps with boosting innovation processes in
the organizations. Greater digital technology adoption can yield tremendous economic gains
for Canada: a 1% increase in labour productivity resulting from the adoption of digital
technology yields an additional $8 billion in value to the Canadian economy.
4.3 CANADIAN GOVERNMENT INITIATIVES FOR DIGITAL
TRANSFORMATION
Digital Canada 150:The Canadian Federal Government under the Digital 150 2.0
initiative has committed to equality in internet access, strong cyber security and privacy
enablers, open data and intellectual property protection, research & development and
Canadian digital content.
OMDC Interactive Digital Media Fund: The Interactive Digital Media Fund seeks
to bolster Ontario’s digital economy by providing government grants for the
conceptualization and development of interactive digital media projects. Businesses may
receive up to 50% of eligible expenses to a maximum of $50,000-$250,000 in government
grants. Projects typically focus on cutting-edge digital media technologies that are planned
and produced in Ontario.
IRAP Accelerated Review Process (ARP): IRAP funding supports technical
research projects that help businesses overcome internal technical challenges. The program
may provide up to 80% of internal labour costs and 50% of contractors to a maximum
$50,000 for software implementation, productivity improvements, and production design.
Automotive supplier Innovation Program (ASIP): ASIP grants provide a critical
source of innovation funding to Canada’s automotive industry. Businesses may be able to
receive up to 50% of project costs to a maximum $10 million in Canadian government grants
to develop prototypes, engineer new products, and test/validate new products or processes.
IESO Conservation Fund: Ontario government funding is available for businesses
using modern technologies and computing to reduce the amount of energy they consume.
Several streams of funding comprise this program which may provide up to $1 million in
government grants. Projects typically involve the implementation of energy conservation
management programs, practices, and technologies.
Digital Talent: Road to 2020 and Beyond: It is an action based strategy to better
position Canada’s digital talent as a comparative advantage in an increasingly global and
competitive landscape,” Canada’s standing in the global economy will depend on its ability to
fully leverage emerging digital trends. The ICTC strategy projects that 182,000 skilled ICT
workers will be needed in Canada by 2019, with another 36,000 by 2020.

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5. DIGITALIZATION ON BANKING
It focuses on digital transformation of banking sector in seeking regional growth
amidst a new digital era. Banks have already invested heavily in technology and
infrastructure, which bring dramatic changes and rewired this sector for digital innovation.
From online banking (bank in your pocket), to ATM availability at every nook and corner has
enriched the user experience. Major forces of the digital transformation strategy involve the
overhaul of organization, the rapid enhancements of highly scalable digital platforms, the
leverage on technology to sculpt the customer experience, and the internal evolution and
external partnering in seeking new digital innovation
5.1 HISTORY OF DIGITAL BANKING IN CANADA
Canada has a mature, competitive and centrally regulated banking system. Canada's
major banks play a vital role in the economy and today also engage in the insurance, trust and
securities markets. Their business, the technology surrounding it and the regulations that
govern it, have evolved continuously over the centuries.
The Canadian banking sector is composed of domestically owned banks, subsidiaries
of foreign banks operating in Canada as Canadian chartered banks (foreign bank
subsidiaries), full service branches of foreign banks, branches of foreign banks with limited
access to Canadian source funding (referred to as lending branches) and foreign bank
representative offices.
Banking in Canada began to migrate in earnest from colonial overseas banking
operations to a local banking system with the founding of the Bank of Montreal in 1817.
Under its charter, the Bank of Montreal was given a monopoly on the right to issue
promissory notes on the model of the army bills. Because of its monopoly rights, the Bank of
Montreal essentially acted as a central bank for both Upper and Lower Canada. Other banks
soon followed and began business, and after a lengthy approval process began unregulated
banking business.
The Provincial Note Act was passed in 1866 to link note issue to the needs of the
British administration. This marked the beginning of an enduring policy of government
intervention in the Canadian economy. The British North America Act of 1867 formally
codified this policy, allowing for government control over coinage, currency, bills of
exchange, promissory notes, banking, and incorporation of banks. This in turn allowed for the
creation of a uniform currency across Canada. Official Canadian currency took the form of
the Canadian dollar in 1871, overriding the currency of individual banks. The legal
foundation of the Canadian banking system consisted of a series of laws passed in 1870 and
1871.
During the revision of the Bank Act in 1890, both bankers and the government
realized that a more formal banking organization was required, so the Canada Bankers
Association (CBA) was founded in Montreal on December 17, 1891. Today, the Canadian
Bankers Association is the voice of more than 60 domestic and foreign banks operating in
Canada and their 280,000 employees and it continues to provide governments and others with
a centralized contact to all banks on matters relating to banking in Canada.

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Banking remained relatively decentralized until 1935, when the Bank of Canada was
founded in response to the economic instability experienced during the Great Depression in
Canada. The establishment of the Bank of Canada in 1935 was also an important milestone in
banking and monetary governance.
In the 1980s and 1990s, the largest banks acquired almost all significant trust and
brokerage companies in Canada. They also started their own mutual fund and insurance
businesses. As a result, Canadian banks broadened out to become supermarkets of financial
services.
In everyday commerce, the banks in Canada are generally referred to in two
categories: the six large national banks (the "Big Six") and smaller second tier banks. The six
largest Canadian banks by assets and market capitalization:
Royal Bank of Canada (RBC)
National Bank of Canada (NBC)
Toronto-Dominion Bank (TD)
Bank of Nova Scotia (Scotiabank)
Bank of Montreal (BMO)
Canadian Imperial Bank of Commerce (CIBC)
These six banks account for more than 90 per cent of Canada’s total banking assets. In
addition to these domestic banks, as of 2 April 2017, there were 22 other domestic banks, 24
foreign bank subsidiaries, 26 full-service branches, three lending branches and 25
representative offices.
The Canadian banking sector is regulated by the federal government under the
auspices of one regulatory authority, OSFI. OSFI regulates all Canadian federally
incorporated financial institutions (FRFIs), including banks, insurance companies, trust and
loan companies, and credit unions.
Today, Banking in Canada is widely considered one of the safest banking systems in
the world, ranking as the world's soundest banking system for the past six years according to
reports by the World Economic Forum. Global Finance magazine put Royal Bank of Canada
at number 10 among the world's safest banks and Toronto-Dominion Bank at number 15.
Canada’s banks, also called chartered banks, have over 8,000 branches and almost
18,000 automated banking machines (ATMs) across the country. In addition, "Canada has the
highest number of ATMs per capita in the world and benefits from the highest penetration
levels of electronic channels such as debit cards, Internet banking and telephone banking".
5.2 EVOLUTION OF DIGITAL BANKING
Things are, however, rapidly transforming in the digital era. It is as important that the
banks remain as transparent, as their customers remain authentic. The main objective behind
integrating banking services with technology is, undoubtedly, convenience. Technology has

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now become familiar to most individuals, to an extent that it influences their lifestyle. The
primary steps on the digital banking journey have been largely focused on adding to the
existing offering using new, technology-enabled services to increase the accessibility and
value for customers. The most noticeable examples are mobile apps, e-wallet solutions, APIs,
and personal finance management (PFM) tools. It, then, becomes vital for businesses to
distinguish themselves in the digital space with unique offerings. The current business
priorities for banks in the digital world are to use the new establishment for increasing
profitability and revenue.

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1968 – First cash credit card was introduced in Canada
1969 – First ABM machine is installed for public use
1977- Direct deposit of pay cheque was introduced
1986 – National Interac ABM network launched. Interac is a Canadian interbank network that
links financial institutions and other enterprises for the purpose of exchanging electronic
financial transactions. Interac serves as the Canadian debit card system, as the traditional
credit card providers (Visa and MasterCard) rarely provide debit cards in Canada due to
Canada's level of development which is too high for both. There are over 59,000 automated
teller machines that can be accessed through the Interac network in Canada, and over 450,000
merchant locations accepting Interac debit payments
1990 – Interact debit card plot launched. It is a Canada's national debit card service for
purchasing of goods and services.
1994 – National Interac debit card network launched
1995- Royal Bank was the first Canadian bank to offer information through the World Wide
Web at www.royalbank.com
1997 – ING First full service virtual bank was established. The concept of a direct (Virtual)
bank gained prominence with the advent of online banking technology in the early 1990s
which led to a number of direct banks being created, although many were owned by
traditional banks. One of the first and most successful adopters of this was ING Direct that
launched its first such bank in Canada.
1998 – The first talking ABM was introduced in Canada.
2000 – 03: The Canadian banks adopts internet banking, E-Mail banking, Voice recognition
Banking, Handheld wireless banking, online shopping methods.
2007 - Interac announced EMV Chip Card technology. The main benefit to this technology
over the existing magnetic stripes is that the chips are almost impossible to copy due to high
levels of encryption.

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2008 - The Canadian Payments Association (CPA) is introduced the new image-based
cheque -clearing system throughout Canada.
2010 – 2012: Financial transaction methods are moved to mobile wallets and applications
2014: Newest biometric security tech released by Tangerine – its newest mobile banking app
was the first of its kind in Canada to offer Voice Banking and Touch ID authentication.
Future: Royal bank of Canada and Master card are experimenting the wristband that identify
the user by their heart beats.
Canada’s banks, also called chartered banks, have over 8,000 branches and almost
have over 65,000 bank machines in Canada and 18,711 of these are bank-owned automated
banking machines (ABMs) across the country. In addition, "Canada has the highest number
of ATMs per capita in the world and benefits from the highest penetration levels of electronic
channels such as debit cards, Internet banking and telephone banking".
5.3 VARIOUS DOMAINS WORKING ON DIGITALIZATION
Canada Advances in advanced manufacturing, robotics, cyber security, intelligent retail,
connected transportation, smart cities, financial technology, clean technology, biotechnology
and eHealth are expected to lead to profound shifts in the ways businesses operate, as well as
in the skills profiles of Canadians.
Advanced manufacturing & robotics: The growth of IoT is creating a world where billions
of devices are connected to the Internet. In the context of advanced manufacturing systems,
IoT will help streamline production capacity and improve yields. The global end-market
value of industrial automation already exceeds $150 billion in annual revenue.
Cyber security: Cybercrime costs the global economy $445 billion annually, according to a
2014 report from the Center for Strategic and International Studies. The evolving threat posed
to critical infrastructures, SMEs, corporations and individuals is creating high demand for
new cyber security strategies and protocols that can protect Canada’s commercial integrity.
Intelligent retail: By using big data analytics to learn more about consumer behaviour,
retailers can deliver more targeted promotions, discounts, and other value-added services that
boost sales and profitability. Global e-Commerce is already a multi-trillion dollar industry
that will eclipse $3.5 trillion within the next five years.
Entertainment and video gaming: The Canadian entertainment and video gaming industry
continues to show rapid growth and a high demand for specialized talent. From 2013 to 2015,
the workforce grew by 24% to 20,400 employees. By 2017, another 1,400 workers in
specialized and well-paying creative and technical positions will be required. Globally, the
video game industry is the fastest growing sector of the entertainment industry, with a market
valuation of nearly US$100 Billion.
Connected transportation & smart cities: Advances in technology are transforming not
just the automobile industry, but also public transportation systems, enabling the creation of
smarter cities that improve safety, create greater efficiencies and provide end-to-end

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connectivity to commuters and city dwellers. When segments such as energy, transportation,
infrastructure, and governance are taken into account, smart cities and the connected transport
systems within them represent a $1.5 trillion global market opportunity.
Financial technology (FinTech): Mobile payments, advanced risk management and
counterparty risk exposure, crowd funding and alternative finance are all transforming the
ways traditional banking and finance sectors operate. Global investment in FinTech ventures
tripled in 2014 reaching $12.21 billion.
CleanTech: Clean technology is an umbrella term used to describe business sectors that use
technology to produce clean energy, environmental, and sustainable products and services.
The sector involves a wide array of products and services designed to reduce waste, control
pollution and promote sustainable business and consumption. In the current period, clean
technology is generally associated with solar and wind power, biofuel research and
sustainable infrastructure development. According to a 2014 study by the World Bank, the
global market for cleantech is valued at approximately $1.6 trillion. Canada is considered a
small player in the global cleantech ecosystem and is home to more than 800 cleantech firms
directly employing 50,000 people.
Biotechnology: The biotechnology industry represents a diverse range of firms at the
forefront of medical research, new treatments for disease mitigation and drug developments
for the pharmaceutical industry. The global market for biotechnology could exceed $400
billion by 2017, leading to new breakthroughs in biopharmaceutical, bio-services and bio-
industrial applications.
eHealth: The digitization of the healthcare industry is one of the most defining trends in the
global economy, intersecting everything from client care and medical informatics to public
health and business. The global eHealth market is forecast to exceed $300 billion by 2022.
Canada’s eHealth sector already generates $3.4 billion annually in revenues and employs
nearly 50,000 workers directly and indirectly — a figure that is expected to grow by 32,000
by 2020
Employment

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More than two-fifths (43%) of Canada’s ICT professionals are employed by companies in the
professional and technical services industry. By comparison, ICT employment is 11% in the
information and cultural industry, 9% in the public sector, 7% in manufacturing and finance
industries, 6% in the trade sector, 3% in the education sector and 2% in the healthcare sector.
Employees in the ICT sector are well compensated and their salaries are on average 48%
higher than jobs in other sectors of the economy.
5.4 ACCLERATING PACE OF DIGITALIZATION
The world is becoming more digital. Advancements in digital and technology are reshaping
the way we all do business. Business leaders are looking to digital and technology to help
drive innovation, improve decision making and customer experience and create new business
models.
The pace of digitization and movement between stages is accelerating rapidly. Developed
countries such as Germany, the United Kingdom, and the United States took nearly four years
on average to move from the emerging to the transitional stage of digitization; now,
developing countries such as the Canada, United Arab Emirates, Kuwait, and Estonia are
making that same amount of progress in less than two years. Overall, between 2004 and
2007, countries registered 39 stage leaps; in the ensuing three-year period of 2007 to 2010, 65
countries progressed to the next level of digitization development. Not only has the pace
quickened, but the jump in development has also been more marked. From 2004 to 2007, the
average growth in the digitization score was seven points. From 2007 to 2010, the average
jump was 10 points. This acceleration stems from a number of factors. Emerging countries
now can follow the path that developed nations have already blazed, learning from their best
practices. They also can take advantage of mature technologies and markets, and the resulting
price reductions. Furthermore, acceleration between stages can stem from increased

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liberalization and the growing affordability and availability of digital technologies and skills.
This hastens the implementation and usage of new technologies and the deployment of
supporting infrastructure. In sum, the whole world is moving toward an advanced stage of
digitization at a rapid clip.
Policymakers can play a pivotal role by focusing on five key imperatives.
Elevate digitization on the national agenda: Ensure that national policy and senior
government stewardship provide the platform for progress; create a plan for digitization that
is tracked and monitored, with accountability residing at senior levels of government.
Evolve sector governance: Segregate regulatory and policy roles; clarify both ownership and
accountability for ICT and digitization.
Adopt an ecosystem philosophy: Address the convergence of telecommunications, media,
and information technology; develop strategy that addresses all stages of the value chain in a
holistic way; and consider the local ecosystem as well as export opportunities.
Enable sustainable competition: Develop a competitive ICT model that stimulates both
innovation and adoption, while ensuring sector sustainability and investments.
Stimulate demand: Invest in boosting digitization usage and service adoption; ensure that
public services are available through e-channels.
Organizations across sectors are realizing the transformative power of digital. However,
while there is increased appreciation of digital’s role, many organizations are struggling to
take their transformation initiatives to the next level. They are caught struggling for pace, and
risk falling in the chasm between initiation and termination of transformation initiatives. To
make digital part of the lifeblood of the organization not only requires strong vision and
investment, it also requires accelerated deployment across the business. three primary
mechanisms for accelerating this needed adoption and deployment.
The first approach is acceleration through better governance. Organizations can create
governance structures that inherently allow for replication of best practices and elimination of
capability redundancies.
Technology plays a crucial role in an organization’s digital transformation. It is imperative
that IT executives play a big role in the transformation for it to be successful. This brings us
to the second approach – acceleration through tighter linkage between IT and business. And
this linkage has to start right at the top with the CIO.
Digital transformation is an executive-led initiative. Nevertheless, any such largescale
initiative can only succeed if it has clear buy-in from rank and file employees across the
company. The third approach looks at the importance of engagement as a tool for
acceleration of digital transformation. Employee engagement is indeed a significant challenge
for organizations.
Digital Payment
Canada’s domestic environment is changing due to a number of forces including Payments
Canada’s core system modernization efforts, service provider innovation, increased regulator

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interest in payment systems, and continued expansion of credit card use in Canada. As the
Canadian payments industry continues on its modernization journey, the payments landscape
is being altered in significant ways. For its part, Payments Canada has led the industry in
enabling cheque imaging technology and the migration towards the adoption of ISO 20022,
through its rules and standards. Payments Canada is also working with the industry to design
and implement three new core clearing and settlement systems, including a new high value
payment system, a new batch retail payment system, and a real-time retail payment system.
With over 25 established Fintech companies identified in the Canadian payments ecosystem
in 2016, the influence of new payment service providers continues to rise. There were several
high profile examples in 2016, including for identity management tools (using IBM DLT),
the agreements reached on debit card tokenization and issuing, enabling Apple Pay and
Samsung Pay in Canada, ATB piloting Facebook messenger payments via “chatbot” and
several distributed ledger pilots (e.g., Project Jasper).
Below mentioned diagram covers the various touch points and the opportunities where
omniOmni-channel can play vital role in customer experience, as well as driving top and
bottom lines of the organization.
In 2016, the total payments market in Canada grew to 21.3 billion consumer and business
transactions worth more than $9.2 trillion.
Automatic Banking Machine (ABM): ABMs still popular for withdrawals
More Canadians now identify online banking as their primary banking method (51 per cent)
over banking at the ABM (16 per cent) In 2015, Canadians made approximately 510 million
cash withdrawals, 172 million deposits and 36 million bill payments at bank-owned ABMs.
76 per cent of Canadians use ABMs when making cash withdrawals, while 17 per cent do so
at a branch. Six per cent also take advantage of cash-back services available at some retailers.

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Credit cards: Continue to dominate the POS in transaction value, totaling more than $462
billion in 2016. Canada has become a global leader in credit card use as growing numbers of
Canadians use their credit cards for larger portions of their monthly spending.
Online banking: Online transfers up nearly 51 per cent to $68 billion; and electronic fund
transfer surpasses cheque value for the first time. More than three-quarters of Canadians (76
per cent) report using online banking in the last year.
• 51 per cent of Canadians use the Internet as their main means of banking, down from
55 per cent in 2014. The decrease is due to a growth in mobile banking with 17 per
cent of Canadians reporting that mobile is their primary method of banking, up from
nine per cent in 2014.
• 45 per cent of Canadians report that their use of online banking has increased, while
only four per cent say it is on the decline.
• 63 per cent of Canadians have used an email money transfer to send or receive money
through online or mobile banking.
• 42 per cent of Canadians use online banking as their primary method of bill payment,
while 30 per cent prefer pre-authorized debit or credit card payments, seven per cent
pay using a mobile app, seven per cent pay in branch, five per cent use telephone
banking and four per cent pay at an ABM.
Mobile Banking: First introduced in 2010, Canadians conducted more than 200 million
transactions on their mobile devices in 2015. A 2016 survey by the Canadian Bankers
Association found that 44 per cent of Canadians conducted at least some of their banking
transactions on a mobile device, an 11 point jump from 2014 when 33 per cent of Canadians
took advantage of mobile banking.
Methods to conduct banking
The same survey found that 17 per cent of Canadians are using mobile to conduct the
majority of their transactions, up from five per cent four years earlier. With the recent spike
in mobile banking, Canadian banks have delivered mobile banking capabilities that meet their

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customers’ needs and expectations. According to Forrester’s 2016 ‘Global Mobile Banking
Functionality Benchmark’ report, Canada’s largest banks rank among the top globally for
their mobile banking capabilities.
Banks continue to look for new ways to incorporate banking services into their mobile apps
and Canadians are noticing. Perhaps the best indicator of future mobile banking use comes
from Canadians themselves.
The Remote Transaction: Remote transactions enable payors to initiate transactions
virtually anywhere via cheques, electronic funds transfers (EFT) and online transfers (e-
wallets and electronic P2P transactions). These transactions represent 90 per cent of the total
Canadian transaction value, but only 20 per cent of the total volume.
Social media payments: Current pilot projects leverage traditional payment methods on
social messenger services, to offer a new level of convenience for banking and payments.
Automated Clearing and Settlement System (ACSS) Transactions: The national retail
clearing system, the Automated Clearing and Settlement System (ACSS) cleared and settled
7.4 billion payments worth $6.6 trillion in 2016. The ACSS clears both paper-based and
electronic payment items, through various payment streams, all of which are based on the use
of deposit accounts. The transactions are mainly low-value, high-volume retail payments,
which can be categorized into three main types: cheque and paper, debit and electronic funds
transfer (EFT).
Historic ACSS volume and ACSS value
EFT is facing some strong headwinds from credit cards and growing online transfers offered
by non-bank payment service providers.

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Payment categories: Percentage of total volume and value
The figure illustrates the changing payment market through a breakdown of Canada’s
payment instruments (as a percentage of the total transaction volume and value, respectively)
for the years 2011 and 2016. In Canada, most of the emerging payment channels, including
mobile, online, and in-app transactions can be seen taking place with credit cards, and in the
case of contactless, with debit and credit cards. These growing segments preclude the use of
cash and are observed helping to diminish cash use overall. Still, cash was the largest single
volume stream in 2016 at 31.2 per cent of all transaction volume.
In 2016, a major payment industry milestone was reached, as EFT grew to become the largest
instrument in terms of transaction value (45.4%), moving paper-based payments to second
place. EFT includes electronic bill payments, pre-authorized debits, and direct deposits,
which have combined to provide for alternatives for transactions that had traditionally been
cheque intensive. Online transfers, led by Interac e-Transfers, have demonstrated significant
growth in terms of transaction value, and are now poised to surpass the total value of
transactions performed at ABM machines—yet online transfers still represent less than 1 per
cent of overall payment volume and value.
POS transactions:

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POS Volume and POS Value
Credit cards continue to rule in the value of POS transactions though, with over $462 billion
worth of transactions in 2016. The growing use of credit cards by businesses has the potential
to be particularly disruptive to innovative payment instruments and FinTech companies that
wish to target commercial transactions for their products and services.
Contactless Transactions
Contactless volume and value (in millions)
Total POS Card Contactless and PIN Transactions (in millions)
Contactless transactions are defined as using a payment card or mobile device tap to initiate a
payment through a POS reader (in physical merchant locations). In 2016, the number of
contactless transactions increased significantly, to almost 2.1 billion transactions worth $67.1
billion. This represents an 81 per cent and a 78 per cent increase over 2015, in both volume
and value terms (respectively). With the recent rate of cash decline slowing, most of the
contactless growth is coming at the expense of chip-and-PIN transactions. Indeed, the data
shows that contactless grew to account for about 21 per cent of all POS card payments in
2016.
The Point of Service (POS) ecosystem is rapidly changing, especially with regards to the use
of mobile devices for proximity payments and in e-commerce. These devices have enabled

39
new environments to conduct transactions and provided methods to make traditional card
payments more secure.
Expected growth
In Digital Payments
• Total Transaction Value in the "Digital Payments" segment amounts to US$48,981m
in 2018.
• Total Transaction Value is expected to show an annual growth rate (CAGR 2018-
2022) of 8.8 % resulting in the total amount of US$68,724m in 2022.
• The market's largest segment is the segment Digital Commerce with a total
transaction value of US$46,821m in 2018.
in FinTech Market 2018
• Transaction Value in the "FinTech" market amounts to US$57,344m in 2018.
• Transaction Value is expected to show an annual growth rate (CAGR 2018-2022) of
12.5 % resulting in the total amount of US$91,794m in 2022.
• The market's largest segment is the segment Digital Payments with a total transaction
value of US$48,981m in 2018.
In-scope
In Digital Payments
• Online processed payment transactions
• Image Cheque clearing system
• Mobile POS payments processed via smart devices at point-of-sale
• Mobile banking through bank apps and mobile wallets
• Digital consumer commerce transactions (e.g. credit card, online payment providers
etc.)
• Digital Currencies
In FinTech
• Digital Payments, incl. Mobile POS Payments & Digital Commerce
• Biometric authentication & heart beat authentication
• Online Crowdfunding (equity- and reward- based)
• Robo-advisors and automated wealth management services
• Marketplace lending (peer-to-peer platforms) for businesses & personal loans
Out-of-Scope
In Digital Payments
• mPOS solutions (dongle payments) for card payments or mobile card readers
• Business-to-Business payments

40
• Electronic banking (eBanking)
• Provision fees from payment providers
In FinTech Market
• Metasearch engines / lead-generation business models
• InsureTech or insurance related services
• Business-to-business payments
• Credit scoring and API management
• Crypto-currencies and blockchain technology
6. DRAWBACKS OF DIGITALIZATION
• Lack of Privacy. Privacy’ will vanish in the nearest future
• Nowadays the biggest risk of security tends to be on the internet. Electronic files
which most of the hackers may target and also obtain in a traceable manner.
• It creates Imbalanced labour market. There is a significant negative impact on
Employment. Several employees lose their jobs.
• Too much dependence on technology
• Higher risk of identity theft
• Difficult for tech-unsavvy
• The digital transformation leads to high cost and it needs to be updated time to time.
7. DIGITAL FUTURE OF CANADA
Digital transformation and disruption have been making waves lately across all industries. To
stay relevant, companies, departments, and individuals need to know exactly where business
technology is headed, and be sure to stay on top of each shifting digital trend. Every year
large research firms such as Gartner, Forrester, and IDC use predictive analysis to gain an
understanding of what the future of technology may look like. Forrester research indicates
that only 27 percent of operating companies currently have a working digital strategy, but
researchers at Gartner and IDC are expecting large growth in initiatives and digital revenue
over the next 4 years.
Practically all areas of research today require the creation, storage and sharing of reams of
complex data. Over the last 20 years, Canada has developed a Digital Research Infrastructure
(DRI) ecosystem that includes a world-class, national, high-speed backbone network and a
range of advanced research computing resources that are accessed by researchers across the
country. To meet the changing needs of these researchers while keeping up with the
accelerating pace of technological change, Canada needs a DRI ecosystem with strong
leadership and a clear mandate.
In 2017, in keeping with the Government's commitment to ensuring that Canadians have the
digital services and skills they need for the jobs and opportunities of the future, the

41
Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development,
launched a consultation on potential spectrum releases over the next five years.
The consultation will help shape a plan that will affect current technologies such as
Canadians' smartphones and will lay a solid foundation to help Canada play a role in ushering
in emerging technologies such as connected cars.
The new consultation will support Canada's Innovation and Skills Plan by helping to ensure
that innovators, businesses and the academic community can access the leading-edge telecom
services they need, while fostering an environment where Canada's innovators and job
creators can thrive.
Canada Government is more concerned about the IoT, Blockchain Technologies, BigData,
and Advance Robotics. For recognizing shortcomings, new opportunities, and streamlining
processes, big data will become a staple of business strategy. The growth of the IoT, in
particular, will drive the vision, data usage, and evolution of jobs and processes. As more
devices connect more people in useful and collaborative ways, every enterprise relationship
will change.
The goal of Canada’s digital policy is to increase the openness of communications networks
and devices and expand access to those open networks. An open Internet is one where
citizens are empowered to decide what practices, content, services and applications gain
popularity, capture imaginations, and proliferate.
The incredible changes in the work ahead are, to a large extent, the result of the growing
ubiquity and power of the new machines that drive modern businesses forward. In 2019,
businesses will need to face new technology trends head-on. In order to capitalize on the
changes around, businesses require more than simply the application of the latest and greatest
technology. The accelerated pace of digitalization is creating entirely new ways of working,
facilitated by the new tools. There is a long road ahead for Canada to attain complete
digitalization status.
8. CONCLUSION
Canada has the opportunity to become a leader in this new age, but government has an
essential role to play in establishing, through effective public policies, the right conditions to
encourage and help Canadians take full advantage of the transformational possibilities that
the digital future holds. Digitalization could have wide-ranging effects across the economy.
More and more business tasks that are currently done by humans will be executed
electronically. Many of these processes will occur in digital form “‘speaking to’ other
processes in the digital economy, in a constant conversation among multiple servers and
multiple semi-intelligent nodes that are updating things, querying things, checking off things,
readjusting things, and eventually connecting back with processes and humans in the physical
economy.
In the banking sector transition to digital day-to-day banking is well underway in Canada,
and banks are investing heavily to build the required capabilities and transform. This

42
foundation of customer centricity is also critical to evaluating more transformational changes
as the industry moves towards a new digital future.
Overall, Canada has a strong digital ecosystem that is pivotal to our prosperity and growth.
Low unemployment rates and high demand in almost all sectors of the digital economy
creates a strong foundation for success in the competitive global economy.
Technological innovation and digital adoption are critical components of Canada’s digital
ecosystem, driving economic growth and social development. Therefore, improvement in
both these areas is strongly needed for Canada to realize its goal of being a global leader in
the digital economy.

Digital banking in Canada

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