​​​​​​​​​​​​​​Five-Minute Focus on Digital Acceleration and Technology Innovation with RBC's Bruce Ross

Read Time : 3 minutes 
This article originally ran on RBC’s Investor and Treasury Services Webpage here.  

Bruce Ross, Group Head of Technology & Operations at RBC discusses how digital acceleration and technology innovation are changing client behavior and redefining industry boundaries.

How has the pandemic driven digital acceleration?
The world has been on a digital journey for the past several years largely driven by technological innovation. However, COVID-19 has proved transformational for digitization and the resultant disruption has been little short of life-changing in the way that way we work and live. The requirement for businesses to comply with social restrictions while continuing to operate has forced them to quickly develop new mobile tools that respond to client needs remotely and on-demand.

What impact has digital acceleration had on client behaviour?
Although still in the early days of digital acceleration, we have seen notable increases in digital adoption and clients' desire to conduct business on any platform, wherever and whenever they choose. In addition to the acceleration of digital interactions, we are also seeing changes in client behaviour. For example, 30% of RBC clients who had not used digital in the previous six months are now using digital on a regular basis. These numbers represent a massive shift in consumer behaviour that was born out of necessity. However, research suggests that digital is likely to become entrenched as the preference for most consumers. 

How has digitization changed the way businesses operate?
Digital acceleration has redefined industry boundaries. A prominent example is digital media, where Netflix, Amazon and Apple are now pressuring long-established participants in film and television. Essential sectors like grocery and hardware have also been disrupted, leaving small and medium-sized businesses struggling to catch up with e-commerce and digital marketing.

Growth in e-commerce has accrued disproportionately to a few mega merchants that have not only boosted sales and distribution, but are also exerting greater control over the payments sector. During the Christmas period, for example, 20 cents of every dollar spent in Canada was via Amazon and Apple platforms. Payments through Apple Pay increased 27% year on year.

What can organizations do to stay ahead of the digital curve?
The sectoral changes have reinforced a couple of key lessons. First, every business requires a digital strategy that not only includes the ability to execute commerce, but also provides value beyond execution and ties directly to the core value brought to clients. Second, organizations need to disrupt before being disrupted, and those not willing to innovate will be left behind. This will happen very quickly in the event of a major technology shift like the one experienced during the pandemic. No business model is completely defensible, and technology has only accelerated the opportunity for new competitors to attack traditional profit pools.

How are artificial intelligence and machine learning driving innovation?
Artificial intelligence and machine learning are currently at the forefront of creating insight-driven digital platforms that tap information from payments and tailor consumer offerings based on purchasing habits. RBC has invested heavily in these areas to create differentiated insights for clients, drive efficiency in operations and secure our platforms. 

Emerging technologies such as 5G, quantum computing and the internet of things will have a significant impact on our digital future. Imagine a world where mobile phones are no longer the centre of our personal ecosystem and we move with ease from the office to a self-driving vehicle that automatically stops at the grocery store on the way home to pick up food for the family.

How is digital acceleration changing the cybersecurity equation?
Digital acceleration comes at a price. The scale and frequency of cyber threats are increasing significantly as clients adopt different payments methods, conduct in-app purchases, and use wearables and mobile wallets. The cybersecurity challenge has further increased during the pandemic as we moved to remote working, longer global supply chains and more complex digital ecosystems.

This has put the onus on organizations to protect client information and safeguard client trust. Fortunately, technology is also providing solutions to these threats. Artificial intelligence and machine learning tools are bolstering threat management. Transaction information and behavioural analytics are also being employed in anti-fraud systems. 

Building a strong, cyber-conscious workforce and investing in digital security are key to the development of cyber-resilient organizations that effectively respond to evolving cyber threats.