World Economic Forum: BMO CEO on the future of finance

BMO Financial Group's CEO Daryl White recently sat down with CNBC International to discuss the current state of the Canadian economy and the future of finance. When asked about potential rate cuts coming out of the Bank of Canada, White expressed that it is not inevitable at this point. He highlighted that the Canadian economy is currently stable, with risks surrounding trade, such as the China Phase 1 deal, USMCA deal, and potential US-UK deal, being more stable than they were six months ago. White mentioned that the downside risks have been steadily eliminated one by one, leading to a more positive outlook for the North American economies. He noted that while uncertainty surrounding trade agreements did lead to a temporary pause in corporate and commercial spending, clarity on these issues has started to stimulate economic activity. White pointed out that with North American economies projected to grow at around two percent or higher in 2020, there is not a strong case for rate reductions. Despite three rate reductions by the Fed in 2019, Canada's overnight rate remains at 1.75%, the highest in the world. This suggests that there is room for rate adjustments if needed in the future. Overall, White believes that the current economic environment looks stable, providing a positive outlook for the Canadian economy moving forward. Shifting focus to digital transformation, White discussed BMO's efforts to meet customer needs by offering a range of banking services across various platforms. He emphasized the need to balance the cost of undergoing digital transformation with the benefits it brings to the customer experience. Despite the significant investment required for digitization, White stressed that it is a non-negotiable cost in today's digital age. By streamlining operations and delivering better digital products, BMO aims to enhance customer satisfaction while remaining cost-effective. In conclusion, White's insights point towards a stable and optimistic outlook for the Canadian economy in 2020. The elimination of downside risks, coupled with ongoing digital transformation efforts, positions BMO Financial Group to adapt to evolving customer needs and navigate the changing financial landscape successfully.