The Canadian fintech sector is rapidly rising; it has potential to change things over the next ten years bringing about a shift in the manner people view the banking and payment sector.
The Canadian financial technology sector is rapidly rising; it has potential to change things over the next ten years bringing about a shift in the manner people view the banking and payment sector. However these financial tech companies don’t view themselves as competitors to traditional companies but want to establish themselves as allies. Banks too remain open to the idea of bringing in digital improvements and creating an easier way to reach their end consumer.
Fintech or financial tech is actually a financial services sector that emerged only in the 21st century. Essentially fintech can be defined as any technological innovation in the financial sector. The term once only applied to technology in the back-end of established consumer and trade financial institutions but now encompasses any technological innovation in the financial space that includes innovations in financial literacy and education, retail banking, investment and even crypto-currencies like bitcoin.
All across the world fintech companies have garnered interest from investors and are being viewed as a hot and emerging sector. Canadian fintech usage has not reached the levels of other industrialized countries which are now aggressively trying to use fintech. Only around 8 percent of consumers surveyed said they had used at least 2 fintech products in the last six months. However fintech industry experts expect the numbers to grow. Canada’s fintech sector now boasts of around eighty companies and is constantly growing. Consumer acceptance is growing too, experts feel.
“We now have more than 300,000 members across Canada,” Dave Feller, founder and CEO of Mogo, which is a Canadian Fintech company, headquartered in Vancouver, said.
Mogo, earlier this year, unveiled a mobile app which is expected to transform the way Canadians deal with their financial activities using their smart phones. The company is also looking to enter into the housing loan sector within the next year as it adds a mortgage broker feature to its app. The app provides more transparency to a service that still sees many transactions over the phone.
The quick growth that the Fintech industry has seen has led to a new community that has bankers and financial professionals partnering with startup entrepreneurs on innovation initiatives. This could lead to improvements and innovation in the field of banking, insurance, investments and loans. MaRS C Suite corporate innovation centre is a place where startups and large enterprises can accelerate innovation. It is basically an ‘innovation’ hub intended to serve as a neutral ground for startups and already established companies and venture capitalists to meet. Many innovations are already underway in the centre. Most of its tenants are from the financial services sector.
Many companies including PayPal Canada look to relocate to MaRS to improve strategic relationships with fintech startups and utilize the emerging fintech industry to their advantage.
“MaRS has always been a home for creativity and inventions,” Paul Parisi, general manager for PayPal Canada said. “MaRS will open the door to new partnerships opportunities and allow us to deliver even more meaningful innovation for our customers across the country.” Spaces such as MaRS C Suite corporate innovation centre have led the fintech world to use the advantages of traditional commercial financial companies. The healthy marriage of fintech and traditional large financial institutions is a step in the right direction for the Canadian financial and technology sectors.
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