Scotiabank: Exemplar Blueprint for Building a ‘Digital Factory’ to Accelerate Digital Innovation

At 180 years old Scotiabank’s digital strategy truly represents a modernization of the oldest to the newest practices.

Some of their digital innovations include interactive screen media in branches, ‘eHOME‘, where Canadians can apply for a mortgage completely online and track the application status through real-time updates, and in this video they explain the value of digital banking in the era of Covid-19.

Digital Factories

They’re also applying innovative organizational concepts to advance these technology innovations, notably their use of ‘Digital Factories‘, explained in this AmericanBanker interview with Chief Digital Officer Shawn Rose.

Shawn says the bank has set up five such factories, one each in Canada, Chile, Colombia, Mexico and Peru, which enables them to develop central best practices while also localizing specific functionality that’s unique to each country.

In essence they’ve created an internal banking-as-a-service platform, a design system called Canvas. This enables a swipe function for their applications, where you swipe-right to initiate transfers. Their latest round of innovations, named ‘Nova’, has seen them migrate 2.6 million of their customers their previous application to a new Android and iOS one.

This has enjoyed over 90,000 4.5+ ratings and reviews in the Apple app store, up from 2.4 just a couple of years before, adding 400,000 new customers using the app, achieved a lot through viral word-of-mouth recommendations. It’s also facilitated better security – Those using biometric authentication has gone up from 45% to 80%.

Accelerating Innovation Pipelines

In this video Justin Arbuckle, Senior Vice President for the Platform Organization at Scotiabank, shares his experiences of their Cloud journey, the organizational transformation they have undertaken to make these types of innovations possible.

He emphasizes that Cloud is a method, not a location. It is less about where applications and data are deployed, and more about how they are developed and how organizations are modernized to achieve this.

Describing the “two island problem” – Many years of highly fragmented data and layers of legacy systems, existing in tandem with a set of new Cloud Native apps, he defines the primary goal of the Cloud method being to build a bridge between these two islands.

To address this they have developed ‘the Accelerator’, a software development pipeline, which takes all of the steps needed to safely deploy code to production and creates an abstracted layer that synthesizes all the tools required for both legacy and Cloud Native apps. IT World reported on how they have open sourced the technology to tap into a collective innovation capacity.

Fundamentally what this accelerates is change throughput; new innovations can be moved through the organization quicker, through a continual process of improvement. This was the key learned lesson for Scotiabank – How you are getting code to the Cloud is the key success factor.

Achieving this sustained high velocity requires difficult transformation, particularly in terms of people and culture. It requires a new way of organizing, a new way of building teams, trust and relationships with stakeholders.

PLATO: Co-creation of Cloud and Application

As Justin explains Scotiabank has wholly embraced the Banking as a Platform concept, encoding it literally into being through their ‘Plato’ organizational model and technology architecture. What is especially potent about this approach is the dynamic of integrating traditionally off-the-shelf enterprise applications into the Cloud delivery method, in this case through Pegasystems, enabling the ‘Co-creation of Cloud and Application’.

From the Pegaworld 2019 conference the modernizing technology presentation from Jim Saleh, Senior Director BPM Engineering, explains this in detail, describing their journey to becoming a Cloud Native bank.

Built on a foundation of Cloud IaaS and PaaS this has enabled them to pioneer a BaaS (Banking as a Service) paradigm and greatly expand their rates of DevOps innovation, building over 60+ BPM apps containing over 250 processes, in functions from customer on-boarding through disputes and settlements.


At a previous Pega conference presentation Jason Charlebois, Senior VP for Technology, walks through the strategic context for this transformation strategy and describes the role Pega are playing to facilitate it.

He begins by explaining that a new CEO in 2014 set the scene for digital transformation, responding to the emergence of FinTech and digital native companies who were disrupting the industry.

The new CEO prioritized a customer focus and technology talent, reorganizing the bank from heavily bricks and mortar to digital channels to greatly reduce structural costs and become much more adaptive to customers needs across omnichannel interfaces.


From 5m:40s he begins describing their digital transformation journey and their playbook for achieving it. This featured a technology blueprint, digital roadmaps, an increased use of agile practices and a platform modernization program.

Jason explores this modernization in detail from 13m:20s, with them taking their first steps to deploy production applications to the Cloud, via PaaS and IaaS delivery models. They’re making use of data analytics, with an enterprise Hadoop data lake, that ingests more data every month than the company used in the previous 100+ years.

A critical success factor for driving this initiative has been customer experience design. This is contextualized by their heightened customer focus and catalyzed through new customer charter statements, and through transforming previously monolithic program management life-cycles to agile methdology that delivers value to customers much faster.

From 17m:55s he walks through their use of Pega modules including the Customer Decision Hub, Customer Service Platform and the Marketing suite, and how their implementation has enabled dramatic service improvements including:

  • Credit card applications – 8 mins to 2 mins.
  • Mortgages – 4 hours to 2.5 hours.
  • Small business accounts – 3 weeks to 20 mins.
  • Day to day customer on boarding – 18 days to 8 mins.

At 21:35 he explores in detail their use of the Customer Service Platform, and how it was central to their smooth acquisition of the JP Morgan credit card business in Canada, and at 23:40 he explains how the Marketing suite enables them to better organize and drive the campaigns that intelligently promote the right offers to the right customer.


Scotiabank offers an exemplar blueprint detailing the full spectrum of change initiatives needed to truly embrace and achieve digital transformation. A clear Platform architecture is needed to enable and co-ordinate a much higher throughput of new software innovations, but technology alone is only half the puzzle. These new features require new skills and new organizational models, ‘Digital Factories’, to create and push them through.

All of this needs a strategic framework to direct these new innovations towards top level priorities and to result in improved processes for customers, to speed up the delivery of services they value via the channels they prefer, and to achieve this while also lowering the overall structural costs for the business.

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