Canada’s FinTech Ecosystem Is Gaining Momentum as a Global Hub for Innovative Technology
By Sofia for LTP
As FinTech hubs around the world enter various phases of growth and development, the attention of financial industry professionals is being scattered over emerging locations and new opportunities for businesses. While Canada is not really a ‘freshman’ ecosystem in FinTech, the country appears to be gaining attention as possibly one of the hottest FinTech hubs.
The Canadian FinTech landscape has been a hotbed of activity with 100 Canadian FinTech startups raising over $1 billion since 2010. Some professionals believe that Canada is on the verge of a tech-powered evolution in the financial industry as technological innovation in blockchain, lending, payments, wealth management, capital markets, are transforming the financial system to better improve services, convenience and access to capital.
Roundtable organized by Canada 2020, a think-tank redefining the role of the federal government for modern Canada, revealed an opinion on the opportunities in the market along with barriers. Among the arguments for a progressive development of national financial technology ecosystem is the fact that the six most powerful banks in Canada recognize that innovations are inevitable, so the banks have an incentive to be active participants, rather than facing challenges from outside, such as from global players like Google and Apple.
Canada’s FinTech is even invited to establish ties with foreign governments through open-border initiatives in order to explore other markets. The UK Department of International Trade (DIT) in cooperation with British Airways, for example, will be hosting a Canadian FinTech mission to London at the beginning of December, to which Canadian FinTech companies are invited to explore and connect with the UK’s FinTech ecosystem.
Probably one of the most interesting hallmarks of Canada’s FinTech is its collaborative attitude. Vancouver, one of Canada’s and the world’s most interesting FinTech hubs, has quite a vibrant set of startups. The ecosystem is describedas having a unique lifestyle appeal to talented professionals, and its proximity to the Silicon Valley and Asian markets, allowing for collaboration and financing.
Speaking of Vancouver’s FinTech landscape, it is worth mentioning that some of the most successful and fast-growing FinTech startups are based in Vancouver, a region that has continued to attract VCs attention across several borders. For example, Trulioo, the leading provider of global identity verification for the online payments industry, in December 2015 raised $15 million in an equity financing – an investment participated by American Express Ventures and existing investors BDC Capital, Blumberg Capital and Tenfore Holdings. Another great example is Zafin, which developed a relationship banking platform that uses advanced analytics to tailor banking products and services, track conditional offers, and optimize pricing and product mix for each customer. In other words, it enables banks to be less product-centric and more customer-centric.
Characterizing the uniqueness of Vancouver’s FinTech ecosystem, Christine Duhaime, Founder and Executive Director of the Digital Finance Institute, based in Vancouver, shared with Trulioo, “The interesting thing about Vancouver’s FinTech ecosystem compared with Singapore and London is that we don’t have any government or global bank subsidized FinTech centers or FinTech innovation labs,” said Duhaime. “The growth of our FinTech ecosystem is real, organic, and much more viable and sustaining as a result, at least for the short term.”
However, there is always room for improvement and Canada’s FinTech scene has work to do. As professionals suggest, in order to succeed in Canada, startups require three components: access to funding, attracting and retaining talent, and government support.
“The overall sentiment from most stakeholders was that Canada ranks between moderate to high in terms of supporting startups, but there is room for improvement. Stakeholders said that funding, engagement, policy initiatives and support from the Canadian government for FinTechs in Canada can help the country become an international leader,” as stated by Betakit.
First appeared at LTP