Category Archives: Innovation and Resources

Reasons Why Toronto Tops Financial Technology in Canada

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NCFA Guest Post | June 27, 2017

Canada ranks highly in terms of innovation, and the adoption of sophisticated technology. For example, mobile technology increased at a rate of 23.63% (year-on-year) in 2015, and the rapid advances in mobile technology are being adopted by many industries across the board. In 2014, a study indicated that 55% of Canadians owned smartphones. Fast forward to 2015, and the penetration rate of smartphones reached 68%. This increase represented a 23.63% uptick – remarkable by all standards.

Most Canadian smartphone owners own multiple devices, with the mean number of smartphones per person at 2.12 in 2014. That number increased to 2.37 in 2015, an increase of almost 12%. Across Canada, the demographics with the strongest growth in smartphone, tablet, and phablet ownership were the 25 – 34 age group and the 45 – 54 age group. This indicates that an increasing number of established people are buying into the tech scene, and this is helping to propel Fintech across all 10 provinces in Canada.

The smartphone revolution has filtered through social strata and demographics, and now impacts Canadians across the spectrum. It has become an indispensable part of daily life, and Canadians are turning to these mobile devices over traditional PCs, laptops and notebooks. From social media to banking, communication and work, mobile technology has evolved at a rate of knots. Between 2014 and 2015 for example there were increases in smartphone usage across the board. The most notable increases are with online streaming, online shopping, navigation, videos, apps, paying bills, checking the weather, applying for a business loan, communicating via social media, and reading the news. It makes sense that Fintech is an integral component of the mobile experience.

Canadian Banks Adopting Fintech

Canadian banks have not wasted a beat when it comes to cutting costs and increasing their efficiency. Fintech companies abound in Canada, and they provide innovative solutions at a fraction of the cost of traditional banking. Banks across Canada are implementing Fintech technology to stay ahead of the pack. They realise that they run the risk of losing business to the non-bank sector if they don’t adopt this technology. Multiple Canadian banks have developed their own proprietary Fintech systems, including Scotiabank with its Digital Factory which now serves 23 million clients across Canada.

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A San Francisco-based Fintech company – Ripple Labs – has partnered with Scotiabank, National Bank of Canada, RBC, CIBC and BMO to expedite international money transfers utilising blockchain technology. Various Fintech accelerators have also been launched to develop the bustling Fintech industry in Toronto. An example of how big financial technology is in Toronto is evident with the $30 million capital raised for start-ups by Ventures.

Toronto Fintech is Rapidly Gaining Prominence

Toronto is an integral component of the Canadian Fintech scene. The world’s foremost incubators and accelerators of technology including OneEleven, DMZ and MarS are all based in Toronto. As a case in point, UBI Global has incubated more than 260 start-up operations and the company is also the recipient of the 2016 Fintech Awards in Canada. Even the Canadian government has jumped in on the bandwagon, with C$1 billion allocated for developing innovative clusters throughout the country.

The Canadian government wants to ensure that innovative technology is available to Canadians across the country. Business-friendly regulations are being introduced to support Fintech growth and development in the province of Ontario. And Toronto is spearheading the pack as a leader in global financial services. The leaders in Fintech include London, New York, Hong Kong and Singapore.

Behind the leaders are Jakarta, Abu Dhabi and Istanbul. Toronto is certainly well-positioned to become a power player in Fintech. Regulatory frameworks are already in place, and the human, technical, and financial capital are available to accelerate the growth of this industry. Toronto is also booming with AI. Artificial intelligence start-ups have blossomed in this Canadian city, and this dovetails perfectly with the innovative technology in the financial sector.

 

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Assessing the Potential for Crowdfunding and other forms of Alternative Finance to Support Research and Innovation

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European Commission | May 4, 2017

This report (dated January 2017) provides an assessment of whether alternative finance has the potential to help Europe address the problem of access to finance for innovative companies and bridge the gap in terms of access to risk capital, and if EU action is needed to support development of the sector.

To this aim, the study produced the following results:

1) an estimation of the size of the alternative market for research and innovation, together with a typology of sectors and of alternative finance funding models suitable for research vs. innovation;

2) an analysis of the European alternative finance landscape for research and innovation;

3) an analysis of the challenges limiting development of the alternative finance, and alternative finance for research and innovation in particular;

4) an assessment of policy options addressing those challenges;

5) a final recommendation of priority action at EU and national level to exploit the opportunities of alternative finance for research and innovation.

See:  Companies, Investors, Online Financing Platforms:  Complete the 2017 Altfi Survey in Canada and Help Define the Future of Alternative Finance Crowdfunding in Canada

Access Page to Download the report --> here

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

 

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CALLING ALL COMPANIES, INVESTORS & FUNDING PLATFORMS! Help Define the Future of Alternative Finance Crowdfunding in Canada

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NCFA Canada (About Us) | June 22, 2017

This is a vital time for the alternative finance crowdfunding sector in Canada.

The crowdfunding sector in Canada offers tremendous potential to innovate and improve capital formation, storage and the distribution of resources by leveraging technology to unlock transactional inefficiencies, provide more liquidity and help small businesses, the backbone of the Canadian economy, to commercialize and globally compete in modern digital times.  While market volumes grew 48% from 2013-2015 and is predicted to reach $190 million in 2016 (download 2016 NCFA report), Canadian markets continue to fall behind international competitors due to market stifling regulations (eg., US $35.2 billion in 2016, Chicago-Booth/Cambridge report).

Your voice is more critical than ever before! 

  • All survey participants will be entered into a draw to receive a $100 gift card of their choice plus $25 Uber promo card for their time.
  • Are you an innovative company raising seed or growth capital? Have you considered raising your next financing in alternative finance markets? What are the most important decision drivers?
  • As a retail or accredited investor, how many deals have you backed in the past 12 months? What’s working and what’s not?

Please take 5min and show support for capital innovation, SME growth and new investment opportunities in alternative finance markets:

  • Your confidential responses will form the basis for NCFAs annual 2017 report to be published later this fall
  • Armed with this data, we seek to promote nationwide growth within the industry and create a persuasive impact on allowing more flexible government regulations and educational support for Alternative Finance Crowdfunding in Canada.  Share your voice now

“We are on the cusp of a new, potentially revolutionary era in consumer and SME finance that harnesses the wisdom of the crowd and its power to effect huge change in the financial sector.”  NCFA Canada

Take the survey now:   http://bit.ly/2perd2N

*Only Open until June 30

We highly appreciate your time and thank for participating in the survey!  Questions?  info@ncfacanada.org.

Sincerely

Craig Asano
Founding Executive Director
NCFA Canada
(416) 618-0254

 

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Is the SEC About to Crack Down on ICOs?

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CrowdfundInsider | By Jonathan Nieh | June 17, 2017

The exponential growth of Initial Coin Offerings (ICOs), which are being used to raise huge amounts of money using blockchain based tokens, have been increasingly scrutinized. According to a recent report on Reuters, regulators within the SEC are taking a hard look at the use of ICOs and how they might be a tool to circumvent securities laws.

ICO vs IPO

ICOs are similar to IPOs in that a company raises capital from the public. However, instead of receiving a share in the company, investors who participate in an ICO instead receive a cryptographic token, like Bitcoin, although the companies conducting an ICO create their own unique token. The token usually does not give the purchaser a share of ownership in the company, but oftentimes the token can be redeemed later for cash.  Because of that distinction from IPOs, ICOs are not technically a “security” and thus not officially regulated by the SEC. However, ICOs can very much be characterized as the offering of securities in some situations. For an in-depth analysis of when an ICO counts as a security, here’s a great blog post by senior contributor Amy Wan.

SEC Concerns

Obviously, if companies are using ICOs as a way to circumvent securities regulations, the SEC will want to get involved. That’s why, as an anonymous source quoted by Reuters put it, ICOs are “high on [the] radar” at the SEC. The SEC notably hasn’t made any official statements on its position as to ICO’s, however. There were a couple ETFdenials related to cryptocoins a few months ago, but those were based on companies trying to create Bitcoin-based listings on different exchanges, the most famous being one funded by the Winklevoss twins
of Facebook fame. The denials of the ETFs do imply that the SEC is concerned about the inherent risks of cryptocurrencies. In fact, the SEC laid out their chief concerns in the letters explaining each denial. Still, ICOs present a different and unique problem in that the SEC has to balance two competing interests: capital formation for emerging companies and investor protection.

See: COMMENTARY: SEC rightly concerned about 'so-called SAFE' securities in crowdfunding

With many experts questioning the absurdity of the speed at which ICOs can raise huge amounts of capital and some even asking for the SEC give some guidance at the very least, the question isn’t whether the SEC will do anything to regulate ICOs, but when. Hopefully, when they do, the regulations put in place will be congruent with crowdfunding’s inherent goal of helping small businesses grow.

 

Continue to the full article --> here

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

 

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Canadians need to come together to take our startup community forward

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The Globe and Mail | by Sir Richard Branson | June 15, 2017

From my first steps as an entrepreneur, I have felt the only mission worth pursuing in business is to make people’s lives better. I have followed the general rule that frustration can be an enormous driver of change if you are good at spotting the opportunities sitting at the centre of a problem. Whether it is the travel industry, health care, the entertainment or leisure sector, this strategy has always worked for me.

Entrepreneurs are better placed than anyone when it comes to spotting these problems and turning them into opportunities. As Canada celebrates its 150th birthday, it is time to fully realize the country’s potential to become a global powerhouse of free enterprise and innovation.

Unsurprisingly most of you agree with this. The newly formed Canadian Entrepreneurship Initiative (CEI) has just produced a report entitled Entrepreneurship: Canada’s Golden Opportunity which reckons more than 70 per cent of Canadians think your country is a good place for a startup business. However, the number that needs fixing is the fact only 40 per cent of people are interested in becoming an entrepreneur. Of those, half of them doubt they could ever succeed.

See: 2017 Annual Alternative Finance Crowdfunding in Canada Survey

Fear of failure and access to funding are two of the biggest issues putting people off taking the bold step to go it alone. For those even considering making that first move, these reasons probably feel like two giant immovable redwoods.

My experience is one can carve a path through that forest and create responsible lending solutions for those looking to start out on their own. We can find more ways to fund and guide entrepreneurs to nurture the future of the Canadian startup scene and help to grow these businesses into international companies of the future.

“As Canada celebrates its 150th birthday, it’s time to realize the country’s potential to become a global powerhouse of free enterprise and innovation,” said Initiative supporter Sir Richard Branson.

For example, in the United Kingdom, our own not-for-profit Virgin StartUp, has found ways to lift the initial burden entrepreneurs face. Virgin StartUp has provided funding to over 1,800 entrepreneurs with £21-million ($35.7-million) in support. It has also provided thousands of hours of mentoring and business advice to entrepreneurs to help guide them through their infancy years. This is part of a British Government-backed startup loan scheme (Start Up Loans Company) which has provided over £300-million to micro-businesses across Great Britain since its launch in 2012.

I’m excited about the launch of the Canadian Entrepreneurship Initiative founded by Ruma Bose. I am especially thrilled we can play a major role in its first program to amplify Canadian entrepreneurs if you have a business seeking support I encourage you to visit entrepreneurshipcanada.ca for the details.

Continue to the full article --> here

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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CIBC introduces free mobile credit score for clients – a first for a major Canadian Bank

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CIBC Press Release | Olga Petrycki | June 2, 2017

CIBC introduces Free Credit Score for mobile banking (CNW Group/CIBC)

Bank partners with fintech Borrowell and Equifax Canada to take mobile banking beyond transactions  

TORONTO, June 2, 2017 /CNW/ - CIBC (TSX: CM) (NYSE: CM) To help clients build a better understanding of their overall financial well-being, CIBC is  working with leading fintech Borrowell and Equifax Canada to provide Canadians unlimited free access to their educational credit score through CIBC mobile banking, anywhere, anytime.

Available through the CIBC Mobile Banking App, clients can access their Equifax credit score which will be updated quarterly, allowing them to track their financial standing over time. In addition, they will have access to important information on factors that affect a credit score and advice on how to improve it.

"As we continue building a personalized digital banking experience for clients, we are also delivering technology that can help clients make informed financial decisions when, where and how they want," says Aayaz Pira, Senior Vice President, CIBC Digital, Retail and Business Banking. "With a simple tap on their mobile banking app, clients can easily access their credit score, allowing them to have a full-picture of their overall credit health, and better control of their finances."

See:  CIBC partners with fintech innovator Borrowell to deliver “one-click” online loans

Recent CIBC research reveals that the majority of Canadians recognize the importance of knowing their credit score to safeguard against fraud, yet more than two-thirds do not know their credit score (69 per cent). Two-in-five (45 per cent) say they have no idea where to obtain their credit score.

Using Borrowell's online platform drawing on credit bureau data compiled by Equifax, CIBC's safe and secure Free Credit Score service is considered a "soft" credit inquiry, meaning it won't negatively impact a client's overall score. This speaks directly to almost half of Canadians (49 per cent) who said they fear checking their score will result in negative implications on their credit.

"Knowing your credit score is important, particularly if you're planning to purchase a new home or car, or if you are new to Canada and working to establish your credit," says Bijal Patel, Executive Vice President, Products, Retail & Business Banking, CIBC. "Clients can better plan for the future by having an up-to-date view of their credit score and then start a conversation with an advisor to help them achieve their goals."

Today's announcement furthers CIBC's commitment to broadening mobile banking beyond transactions. By adding mobile features that speak to a client's full financial picture, CIBC is taking a broader view of what mobile means to client relationships.

"There's no question clients look to mobile to get their routine banking transactions done quickly and conveniently," adds Pira. "Increasingly, clients also want a mobile banking experience that offers deeper insights into their overall finances keeping them connected to the big picture, and new services like free credit score make that a reality."

Launching on mobile first, free credit score will be available online for all CIBC clients later this year.

About CIBC
CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units - Retail and Business Banking, Wealth Management and Capital Markets - CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/ca/media-centre/ or by following on Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.

About Borrowell
Borrowell helps Canadians make great choices about their credit. With its free credit score monitoring, personal loans and product recommendations, Borrowell empowers Canadians to improve their financial well-being and be the hero of their credit. Borrowell was named by LendIt as one of six emerging companies globally "that has demonstrated the greatest potential to impact the future of consumer lending," and is shortlisted as a top "disruptor" in PwC's 2017 Vision to Reality awards.

Poll Disclaimer

From March 29 to March 30 2017 an online survey was conducted among 1,517 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 2.5%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

 SOURCE CIBC release

For further information: Olga Petrycki, Director of Public Relations, CIBC, 416-306-9760 or olga.petrycki@cibc.com

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Canada Central Bank Votes ‘No’ On Blockchain — For Now

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PYMNTS | May 29, 2017

Reports Friday (May 26) said the central bank revealed its views in an article for The Globe and Mail publication, penned by Senior Deputy Governor Carolyn Wilkins as well as Payments Canada’s Gerry Gaetz. There are simply “too many hurdles” that must be overcome for blockchain to be integrated effectively into the nation’s interbank payment system, they said — at least for now.

The Bank of Canada, Payments Canada, top banks in the nation and blockchain consortium R3 all joined together about a year ago to explore the use of distributed ledger technology. The hurdles identified in the column include the incompatibility between blockchain and the need for privacy around some wholesale payments, as well as scalability.

See: Toronto-Based Blockchain Institute Launched

“The bottom line is that a standalone DLT wholesale system is unlikely to match the efficiency and net benefits of a centralized system,” Wilkins and Gaetz wrote. “In fact, at its heart, there exists a fundamental inconsistency or tension between a centralized wholesale interbank payment system, as we have now, and the decentralization inherent in DLT.”

The authors did agree that “one day,” perhaps, the technology could see a place in the interbank system.

“Our experiment, done in two phases, demonstrated that it’s indeed possible to settle wholesale payments on a distributed ledger,” they stated. “Our work also found that such a system could meet some, but not all, of the core international principles for financial market infrastructure.”

There is potential for distributed ledger technology to eventually generate cost savings through the reduction in back-office reconciliation costs, they said.

According to reports, Canada will continue to modernize its existing payments infrastructure and adapt ISO 20022 messaging standards to meet the financial industry’s need for privacy, scalability and greater efficiency in cross-border and domestic wholesale payments.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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