1. Technology in Financial Services Presented to: Centre of Excellence in Financial Services Education

2. 2 “There is a convergence: the line between what we used to call technology and the business almost doesn’t make sense anymore – the technology is the physical manifestation of the product we make.” (Christopher Perretta, Executive Vice President and Chief Information Officer, State Street, September 2011)

3. 3

4. 4

5. Growth in Electronic Transactions 5 Source: Canadian Payments Association

6. Changing Banking Preferences 6

7. Banks’ Spending on Technology 7

8. Implications Technology is creating new demands and new challenges. 8

9. Demands  Customers are demanding that technology provide: 1.Speed 2.Simplicity  Safety and security are table stakes.  Competition drives innovation. 9

10. Transaction Speed 10

11. Speed 11

12. Simplicity  Customers want transactions to be simple.  Response: - Mobile Banking - Mobile Wallets 12

13. 13 Mobile BankingMobile NFC Payments

14. Result of the investment in mobile: The MasterCard Mobile Readiness Index recently ranked Canada as the second most mobile payment-ready country in the world, behind only Singapore. 14

15. Payments Technology is an Emerging Business 15 Domestic International

16. Challenges The pace of change is creating new challenges in: 1.Security 2.Consumer awareness 16

17. Security “At OSFI, cyber risk has become one of our top concerns.”* “While the cost of attacking bank systems is going down, the resources needed to identify, monitor, and mitigate against vulnerabilities and potential attacks are increasing.”** *OSFI Superintendent Julie Dickson, May 2, 2013 **US Comptroller of Currency Thomas Curry, September 18, 2013 17

18. Importance of Customer Awareness BRANCH Environment: bank controlled and fixed Transaction: bank limits time Technology: bank controlled ABM Environment: bank partially controlled and is variable but limited Transaction: bank does not limit time Technology: bank partially controlled PC BANKING Environment: bank does not control and is variable but limited Transaction: bank does not limit time Technology: bank does not control MOBILE Environment: bank does not control and is variable Transaction: bank does not limit time Technology: bank does not control 18 LEAST MOST  Customer flexibility and responsibility

19. Security  More channels to transact = more vectors for fraud  Cyberattacks  Response: - Stronger authentication - Diagnostics - Predictive analytics (a.k.a. “big data”) - Technological countermeasures 19

20.  Growing demand for Mobile commerce / mobile payments IT security 20 What it Means for Education

21. Increasingly, financial services needs people who understand the business of finance and the technology of e- commerce. 21