The Bank of Nova Scotia SWOT & PESTLE Analysis

Strength

1. Strong Distribution Network and Reach: A strong distribution network coupled with a large number of outlets – 1000 branches and around 4000 banking machines – scattered across all states has made the bank’s products easily available to customers. International and Global financial services are provided within 55 countries globally. Latin America as well as Pacific Alliance countries of Peru, Chile, Mexico, Colombia and the Caribbean and Central America receive International Banking services, whereas Canada and Mexico, U.S., Latin America (excluding Mexico), and select markets in Europe, Asia, and Australia are provided with Global banking services. The bank is able to rise above its competitors through its marked international footprint that allows the bank to gain greater potential, growth and even a larger diversification of earnings and risk.

2. Scotiabank is Canada’s International Bank and a leading financial services provider in the Americas: The bank’s consulting, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets combine together to provide services to over 25 million customers. The bank in Latin America and the United States, has a strong wholesale presence that enables it to provide corporate and institutional customers connected to the Americas with better banking solutions and expertise. The bank aims at working towards the greater development of the Latin America and the U.S. markets as these constitute important markets for the Company. The bank is currently the 10th largest foreign banking organization by investments in the U.S.

3. Achieve scale and strengthen presence in key markets via strategic acquisitions: Scotiabank has invested $7 billion in 2018 in making several key acquisitions that will make it the possessor of high-quality assets, talent and technology. The acquisition of the technologically sophisticated BBVA Chile helped the bank go from being the 5th largest private bank in the country to becoming the third largest. The market share of the bank also almost doubled. The acquisitions of MD Financial Management (MD) and Jarislowsky Fraser (JF) in Canada are expected to improve the wealth and asset management businesses of the bank leading to higher fees generation and increased numbers of primary banking relationships. The acquisition of MD has earned the bank 500 new institutional customers. JF and Scotiabank together have created the 3rd largest Canadian active asset manager. The decade long close collaboration with CMA has helped promote Scotiabank exclusively as the preferred provider of financial products and services to physicians and their families in Canada.

The remaining section of "Strength" is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

This section is available only in the 'Complete Report' on purchase.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

1. Technology innovation and disruption: The financial services industry and its customers are affected by the rapidly changing technological scene. Traditional financial institutions are finding the entry of non-traditional new participants to be a significant threat. This is because they are able to make use of advanced technologies and analytical tools to innovate at an accelerating speed which has the potential to impact revenues and cost in certain operational segments. Scotiabank has thus set up a multi-year digital transformation that has been formulated to be in line with the demands, needs and expectations of customers. It will also assist the bank in assuming a leadership position in the digital financial services industry. Toronto as well as other key markets like Mexico, Peru, Chile, and Colombia have already seen the opening of digital factories which are involved in financial innovation through partnerships with smaller financial technology companies. Skills training and education through various digital partnerships with Canadian universities and other organizations have also been made a point of focus with significant finances being set aside for its fulfillment.

2. Technology’s impact on product offerings: The working of the economic sector has been revolutionized by technology. Crowd-funding, peer-to-peer lending, digital currencies, mobile banking, internet investment, and new payment systems have become widely used. Due to technology, information and social media have become easily accessible, rewriting client expectations and the capability of economic institutions to use consumer information to price, target, and market goods and services. Recognizing this, the bank has made large investments in technology like cloud technology and has even created a digital innovation lab which is overseen by dedicated technological professionals whose job is to create innovative products in the digital factories. These professionals are almost 8000 in number and are expected to play an important role in bettering digital customer experience. These steps have caused the bank’s digital retail sales to increase by 11 % and the branch financial transaction to reduce by 6%. Digital adoption between 2016 and 2018 has also increased by 7%.

3. Biometric authentication and artificial intelligence paving the way for the future: Banks are increasingly adopting Biometric Authentication as a secure way of protecting information. ATM hacking can become largely preventable through this measure. However, rigid laws governing North American banks have made it difficult to incorporate ATM upgrades into the U.S. financial system as per Bayometric, a major worldwide supplier of biometric safety systems. Implementing such technology will allow banks to present customers with a more efficient and transparent experience. Another obstacle for banks is the need to follow several safety, compliance, and industry-specific requirements that non-banks — or financial service providers don’t need to follow. A 2016 study by market intelligence company Greenwich Associates has shown that this has enabled such non-bank organizations to grow rapidly. Scotiabank however has plans in pipeline to adopt artificial intelligence solutions like chatbots which will assist customers in tasks like making payments. Almost $3.3 billion have been kept aside for this purpose and it is expected that once implemented, the bank will find itself at par with its global peers.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

This section is available only in the 'Complete Report' on purchase.