Canada – fertile ground for fintech growth
With a banking sector renowned for its stability, some of the world's best Artificial Intelligence talent and a healthy influx of programming skills, Canada has great potential to develop its fintech sector.
Although fintech got off to a slow start in Canada, due in part to the resilience of the banking sector, interviews with senior executives reveal a market in transformation, with many developments seen in Europe and the United States in recent years now happening in the home of Shopify, Hootsuite, Slack and other household names in tech.
One key development is the move from competition to cooperation between fintechs and financial institutions. As Andrew Graham, CEO of Borrowell, an on-line lender that offers free credit scoring and “fair, fast and friendly” lending products, puts it: “for a lot of fintech companies, partnering has got to be part of the strategy to help them with customer access and other issues.”
Additionally, existing regulatory arrangements in the country are being re-examined in the light of the digital revolution, as Janet Ecker, CEO of the Toronto Financial Services Alliance, notes: “While we have an excellent regulatory framework in Canada for financial institutions in terms of resilience, it’s probably not yet flexible enough to allow fintechs and financial companies to do what they need to do in terms of innovations and partnerships – part of the problem is that most regulatory work was done prior to the digital revolution, especially in areas such as AML and KYC. This legislation needs a rethink for the digital world."
It’s not just the need to enable growth in fintech that’s spurring regulatory change in Canada: there’s also an acknowledgement that regulation needs to do more to protect consumers in the digital environment. Initial conversations also suggest that access to venture capital beyond the seed stage in Canada remains an issue, but that this situation is improving; following their colleagues in Europe, Canadian banks are now setting up their own venture capital arms to foster growth in fintech.
If Canada exhibits many of the same characteristics as the European and US markets did two to three years ago, then there are also some distinctly Canadian trends, including pronounced regional identities within the industry (a feature of many sectors of the Canadian economy) and the beginnings of emerging specialisms in Artificial Intelligence and other areas.
In 2018 MagnaCarta will launch the first pan-Canadian fintech report, working with financial institutions, fintech companies, regulators and government. Fintech Disruptors Canada will build on MagnaCarta’s successful studies in the UK, EMEA and Nordic regions, comparing the growth of fintech in Canada not just with these regions but also with the US, China and other global fintech hubs.
- James Wood, MagnaCarta, Vancouver
To find out how your company can get involved in Fintech Disruptors Canada 2018, contact James Wood at MagnaCarta: James@magnacartacomms.com
