As the financial technology (fintech) sector continues to gain momentum globally, Canada has a great opportunity to leverage its highly skilled workforce and take on a key role in forging a path for fintech innovation. OMERS Ventures, the venture capital arm of one of Canada's largest pension funds, published a map of some of the many fintech firms across the country. Although not comprehensive, it gives a sense of just how much fintech is growing in Canada.
"Financial technology is forging incredible gains worldwide," OMERS Ventures said in their blog post. "It is exciting that a growing number of the most important developments being made in this sector are taking place right here at home."
Additionally, Canada’s strong privacy laws provide a solid foundation upon which to build a thriving fintech ecosystem that better protects consumers.
"In Canada, we have the legal framework, expertise, and know-how needed to be a global leader in the fintech space," said Stephen Ufford, Founder and CEO of Trulioo.
A Lack of Cohesion
The major centers for fintech in Canada are in Vancouver and Toronto. Besides being physically separated by long distances – roughly 4,400 kilometers (2,750 miles) to be precise – there is also a cultural and corporate divide, not just between the two cities but also among fintech companies within the same city.
On September 29, 2015, the Digital Finance Institute (DFI) partnered with the Canadian Payments Association to hold a policy roundtable in Toronto. The roundtable served as a forum to discuss the importance of building a fintech ecosystem in Canada and how to nurture cooperative relationships among financial institutions and fintech players in Canada. This initiative aims to encourage industry dialogue on integration and partnerships and strengthen international relationships for fintechs in Canada. The roundtable discussion was led by Christine Duhaime, founder and executive director of the DFI, and Kris Hansen, managing director at Axxiome Group.
“We want to encourage fintech companies to collaborate, instead of operating in silos,” Duhaime commented. “There’s definitely a lack of collaboration between businesses that aren’t necessarily competing for the same customers.”
Canadian Fintech: Stand Up and Be Counted
Based on her extensive travels and interactions with fintech startup leaders around the world, Duhaime sees a clear need for Canada’s fintech industry to organize itself and to have a strong, unified voice. Without a national organizing force, fintech in Canada runs the risk of losing out to other regions and countries such as London, Singapore, and Sydney, where the industry is both well-coordinated and supported.
Closer to home, this type of environment has proven success in Silicon Valley for early-stage startups with accelerators like Plug and Play and ecosystems like RocketSpace. While these operations tend to be targeted at the general startup community, Duhaime seeks to create a specialized environment that is focused exclusively on fintech.
“Other countries have had tremendous success with their grassroots startup initiatives,” said Duhaime. “I want to create a working fintech spaces in Canada, where fintech startups can hang out and innovate, like what Paris, Sydney, Hong Kong, Singapore, and Israel already have in place.”
What’s Next for Fintech in Canada?
In order to bring fintech companies in Canada together as a united force, the DFI is spearheading an initiative to create the Fintech Association of Canada (FAC). Among the goals of the FAC is to provide a truly national focus for fintech in Canada and to help companies to work together more closely to further build and strengthen the industry. The association will provide a neutral voice that will support fintech all across Canada, not just in Vancouver or Toronto.
Duhaime recognizes that new fintech startups are being created throughout the country in regions not traditionally associated with having strong financial centers, such as Atlantic Canada, Quebec, and the Prairies. It’s exactly that kind of outside-of-the-box thinking that can lead to greater success for Canada’s rapidly developing fintech sector. The FAC will act as a facilitator to provide greater opportunities for fintech meetings of the minds from coast to coast to foster further innovation and creativity.
Once created, the FAC also aims to build strong bridges with partners that are needed to ensure success for the fintech startup community. These partners include major banks, private equity, venture capital, finance, law firms, accounting practices, and all levels of Canadian government.
Trulioo is proud to partner with the DFI in this groundbreaking initiative to foster a strong, vibrant fintech industry in Canada. Consider sending a letter of support to the DFI for the creation of the FAC. We've made it easy for you. All you have to do is download a template, fill out your information, and email it back to us.
Thank you for supporting the FAC and its goals to solidify Canada’s leadership role in fintech!