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He noted that the arrival in fintech is relatively recent in Canada, and said bankers in this country should not assume they will avoid the challenge from their newer rivals.

“As the trend continues to catch on, traditional financial services companies will have to be much more aggressive and creative to keep their customers,” Smith said. “A big piece of the customer pie will be at stake here.”

Last year, a report on the global banking industry from McKinsey and Co. said losses to fintech attackers have been “little more than a rounding error.” But the report went on to predict that 20 to 60 per cent of bank profits in five business lines will be at risk by 2025, with consumer finance — including mortgages and retail payments — the most vulnerable.

Even if just a small portion of these businesses is captured by the fintechs, the McKinsey report said banks stand to lose large amounts of money due to margin pressure from the prices offered by their sleek new competitors.

Market observers have warned that banks are also vulnerable to being separated from their customers and the valuable data they provide, making it more difficult to sell them a range of financial services.

So far, Canadian banks are responding to the fintech threat by developing their own technology hubs and taking tentative steps to team up with the same fintech firms challenging their traditional businesses.

Canadian Imperial Bank of Commerce, for example, entered a referral partnership with small business lender Thinking Capital late last year.