Approaches and Practices of Royal Bank of Canada (RBC) in FinTech Innovation

Running head: FINAL ASSIGNMENT 1
Final Assignment
Anqi Li (Angie)
595004
MA in Leadership Program
Trinity Western University
June 10, 2018

FINAL ASSIGNMENT 2
Abstract
In the financial and banking industry, RBC is renowned for its focus on FinTech innovation and
has contributed tremendous efforts and investments to sharpen its edge to successfully stay as an
industry leader. Throughout this study, the author is taking an in-depth look at approaches and
practices of Royal Bank of Canada (RBC) in an era of unprecedented challenges and changes.
This study combines both qualitative and quantitative methods with an overall purpose to build a
tool that one can apply and thus becoming more effective with greater Transformation Servant
Leadership (TSL) influence. The author will present RBC’s current state and compare with ideal
future state while demonstrating detailed steps of closing these gaps mainly via STAR model
(Galbraith, 2014). The organization design and redesign process will be unfolded from six
aspects: cash, people, product development capability, operations capability, marketing
capability and global reach.

FINAL ASSIGNMENT 3
Background Information
New waves of technologies have changed customer’s expectations on products
and services provided in different fields. In contemporary society, traditional banks including
RBC encounter an increasing customer needs for technology enhancements. In financial
industry, Canada’s big five banks are inevitably challenged by online banks who provides user-
friendly platforms, low costs as well as higher returns, for instance, EQ Bank, which is backed
by Equitable Bank, and Zag Bank, which is supported by Desjardins Group (The Canadian Press,
2016).
“Having initially viewed the fledgling fintech industry as a threat, banks are now looking
to embrace innovations and work with technology companies rather than be left behind as
platforms such as blockchain, on which digital currency bitcoin is built, change the financial
landscape” (The Canadian Press, 2016). Faced by disruptive technology like Artificial
Intelligence, cybercurrency and blockchain, RBC’s senior management decided to invest in
FinTech in order to serve the needs of future customers. Such proactive radical change reveals
RBC’s determination on projects which seek the reinvention of company strategy towards major
transformation of business operations (Dawson & Andriopoulos, 2014).
RBC’s Current State
(Movement from current to ideal future state - theory)
According to the Perceived organizational innovativeness scales exercise, RBC is an
organization that is classified as “innovative”. (List the reasons)
Strategic Effectiveness Analysis on RBC
Royal Bank of Canada (RBC) is a premier Canadian bank providing expertise in banking,
finance and capital markets to corporations, institutional investors, asset managers and

FINAL ASSIGNMENT 4
governments around the world (Wikipedia, 2018). Its headquarter is located in financial district
of Downtown Toronto. RBC has 17 million clients and more than 80,000 employees worldwide.
In terms of scope, RBC was the largest Canadian company by revenue and market capitalization
in 2011 with US$673.2 billion of assets under management in 2014 (Wikipedia, 2018). Below
would be the author’s overall analysis on RBC’s current status while break-down of each aspects
will be observed in later paragraphs.
Strategy
RBC has “a focused strategy that targets high-growth client segments within the priority
markets of Canada, the U.S., and in select global financial centers” (Annual Report, 2017). It
takes massive efforts to build a Digitally Enabled Relationship Bank to enhance exceptional
client experience. As talent management is essential to supporting RBC’s strategic objectives,
RBC takes a comprehensive approach to identify and select talented human capital as well as
invest massively in building innovation labs in North America. Research firm International Data
Corp (IDC) has ranked RBC as the top Canadian bank which focuses on embracing FinTech
strategies and initiatives (Zubairi, 2017). RBC has been spared no efforts in “acquiring expertise,
funding external research, establishing a research organization, and focusing on artificial
intelligence and big data”, while its CEO announced to spend 40 percent of overall technology
budget on innovations such as AI and blockchain.at the same time (Zubairi, 2017).
Structure
RBC’s organizational structure is tall in terms of hierarchical structure which guarantees
consistency, quality, stability, and is easy to control under regulatory requirements. Like most
banks, RBC is grouped by functions. RBC is trying to “simplifying the structure, redefining its