The emerging FinTech (Financial Technology) Industry has the traditional banking industry shaking in their boots over fears of reduced profits. The Big Banks' Big Auditors' have all issued publications regarding "Banking Disruptive" and the threat of the emerging FinTech market's effect on the Big Banks' bottom line.

Canada's Big Six banks earned a combined net income of CA$34.9 BILLION in 2015 and it is these outrageous profits that provide a very attractive incentive for players outside the traditional banking system.

A 2014 publication by Deloitte entitled "Banking Disruptive"   states the following:

"Bank employees have historically been heavily incentivised to ensure customers opening current accounts are cross-sold credit cards and other loans and, in turn, insurance policies linked to these loans. Convenience and customers' lack of financial sophistication enabled banks to make high margins on these adjacent products."

Although all the major banks state their mission and objective is earning their customers trust and state that they act in the best interest of their customers, these same banks are profit oriented entities - and that, in itself, has an inherent primary focus of only having their shareholders' interests as priority.

As previously stated by a Big Auditing firm, the banking industry has relied on customers lack of financial knowledge to generate outrageous profits for them. Tellers, supervisors and their managers are each required to meet excessive marketing goals or risk being demoted or fired. In a story that broke on CBC News in March of this year, employees at the major big banks in Canada spoke out about the pressure to dupe customers in order to meet their unrealistic sales goals. These high pressured sales tactics are known as the 'hard sale' and involves applying pressure through forceful language or appealing to one's fears, emotions or greed in order to make a quick sale.

Canada's Big Banks were previously under fire in 2013 for replacing I/T or tech employees with temporary foreign workers. The CEO's at these banks vehemently denied such practices despite its continued use beginning in 2008.

Since the eighties and nineties, banks have been allowed to expand into the insurance and mutual fund markets. These new opportunities have allowed the Big Banks to manufacture and sell their own mutual fund products.  Branch staff have been educated in which of their bank's funds they are required to promote and sell at any given time. As sure as they charge fees, the mutual funds promoted to you, complete with their hidden fees and commissions, benefit their bank shareholders more than you.

With respect to mortgage lending, unless you negotiate your interest rate, term and total amortization period, these banks will sell you the highest rate and longest term and amortization period which is NOT in your best interest, but benefits their shareholders handsomely. Shopping around for your mortgage, including playing one bank against another, will ensure you receive the lowest rate and terms.

Another banking practice that is criminal in its form but is a cash cow to the big bank is insisting that you need and selling you their 'credit protection insurance'. This type of insurance, in most cases, is known to be  post claim underwriting (this means that your eligibility for coverage is not determined until a claim is filed and, at this stage, the claim is usually denied for a number of undisclosed reasons). Any type of credit protection insurance sold by banks provide them with a huge windfall to their bottom line and only allows you the privilege of paying their monthly premium.

Although the FinTech emerging market is an imminent and potential threat to the Big Banks monopoly on customers unquestionable historical blind trust, an alternative to banking with for-profit organizations is banking with a credit union. In this relationship, customers buy shares and are considered "owners" who also share in a percentage of year-end profits. Customers at credit unions are not pressured into unneeded and unwanted products AND honesty about their products relative to customers needs, are communicated and disclosed.

Future articles will provide more details on each of the topics described above.