Briefing

FANGs forays into banking seen as threat by RBC’s CEO

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Dave McKay told investors on Tuesday that Facebook, Amazon, Netflix and Google are “getting between us and the moments of truth of our customers,” then taking that customer insight and earning “economic rent” by selling search and advertising data back to the banks. He also said tech companies are seeking more money from banks. (Bloomberg)

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Talking point: McKay is atypically adversarial toward Big Tech for a  big bank CEO. In June 2018, he announced a plan to spend US$2.5 billion on technology, including a financial-advice app, an app for car owners and a digital platform for new immigrants. In August 2018, RBC partnered with Espresso Capital, a fintech company, to provide loans and banking services focused on the tech industry. Compared to other Canadian players, RBC is committing a disproportionate amount of resources in trying to stem disruption from the tech industry, but its spending is dwarfed by some U.S. banks. JPMorgan Chase, for example, said it would spend US$10.8 billion on technology in 2018.