Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
CMA Lessons on Competition and Growth for Canada
Competition | Sep 15, 2025
Image: Freepik/rawpixel.com
UK CMA Speech Confirms That Competition Drives Investment and Scale-ups
On September 15, 2025, Sarah Cardell, Chief Executive of the UK Competition and Markets Authority (CMA), delivered a speech at the BVCA Summit outlining how competition policy can drive investment and scale-ups. This article summarizes the CMA’s takeaways, benchmarks them against Canada’s position, and explores what lessons fintech leaders and policymakers should draw on.
Four Takeaways from Cardell's Speech
1. Pace and Reducing Delays to Boost Investment
The CMA stressed that long regulatory delays deter investors and can cause promising startups to fail before securing capital. To address this, the CMA introduced new performance indicators to shorten merger review timelines and committed to streamlining processes across its work.
See: Insights from the UK’s Pro-Innovation Regulation Review
“Delay chills investment and can mean promising startups run out of road.”
2. Proportionality and Reducing Burdens
Excessive or outdated regulation can create costs and risks that stifle investment and innovation. The CMA promises to act proportionately, weighing costs and benefits carefully, phasing out outdated remedies, and focusing on the issues most relevant to consumers and businesses.
“We will act proportionately and minimise costs wherever we can.”
3. Predictability and Reducing Uncertainty
Uncertainty in regulatory outcomes undermines investor confidence. The CMA is introducing clearer jurisdictional guidance for merger reviews and publishing detailed roadmaps under its new digital markets regime to provide businesses with greater certainty.
“Uncertainty can stall decision-making and weaken business and investor confidence.”
4. Process and Engaging Stakeholders
The CMA emphasized the importance of open and direct engagement with stakeholders. It is creating new forums such as the Growth and Investment Council and deploying stakeholder surveys to improve how its policies reflect commercial realities.
See: UK to Cut Regulatory Red Tape to Boost Tech and Growth
“The CMA is more committed than ever to the fundamentals of our role – to promote competition and protect consumers, within an independent regime.”
Canada’s Scorecard Against the CMA Takeaways
Measured against the CMA’s framework, below we try to rank how Canada performs for fintech competitiveness and investment.
Pace (2.5/5)
We can look at the past for data-driven proof that Canadian fintechs face chronic delays that slow capital raising and partnerships. Open banking has missed multiple government deadlines, leaving fintechs and banks without full clarity of the program.
Another example is around payment modernization, particularly the Real Time Rail (RTR) which has also faced repeated setbacks, stalling innovation in faster payments. Let's not forget the creation and rollout of equity crowdfunding rules that took years to harmonize nationally under NI 45-110, meaning startups endured fragmented frameworks for far too long. In an era where global regulators must keep pace with innovation, Canada's slower regulatory pace is a drag on growth.
Proportionality (2/5)
Overlapping and duplicative rules increase compliance costs disproportionately for startups. Equity crowdfunding portals are a good example. Under National Instrument 45-110, portals must register as restricted dealers, maintain minimum working capital, and comply with know-your-client and suitability requirements similar to investment dealers, even though transaction sizes are capped at $1.5 million per year.
See: Canada’s Public Sector Costs and Productivity Gap
These requirements add legal, audit, and technology costs that are heavy for small portals but don't always provide proportionate consumer protection benefits, since investment limits already restrict retail investor exposure. The result is fewer viable portals, reduced competition, and higher costs for startups seeking to raise capital. Payments firms navigating multiple oversight bodies face similar burdens. Competition Act amendments have broadened investigative powers, but without a clear proportionality test for smaller firms. This creates uncertainty and often deters new entrants.
Predictability (2/5)
Canada has stalled on open banking and been inconsistent on payments modernization, leaving both fintechs and banks unsure about what rules to plan around. Licensing and regulatory approaches often lack clear roadmaps, meaning firms cannot anticipate timelines or likely outcomes. This erodes investor confidence at exactly the point when fintechs need greater visibility and confidence support. By contrast, the CMA now publishes roadmaps and consults on jurisdictional thresholds in advance.
Process (2.5/5)
Regulators in Canada conduct consultations but feedback loops can be slow and often opaque, discouraging stakeholders from participating. It reminds of a Stephen King quote, "Fool me once, shame on you. Fool me twice, shame on me. Fool me three times, shame on both of us." Stakeholders rarely see how their input affects outcomes.
See: New Zealand’s Regulatory Approach Offers Lessons for Canada
In fintech licensing and payments reform, firms report long periods of silence, creating uncertainty and wasted preparation costs. Engagement exists but is not structured to produce rapid clarity. The CMA, by contrast, has set up a Growth and Investment Council and targeted outreach to startups, making process improvements measurable and visible.
Outcomes and Accountability
What further distinguishes the CMA approach is its focus on measurable outcomes. Timelines, KPIs, and stakeholder feedback are built directly into its reform process. In Canada, regulators rarely hold themselves to outcome metrics. Open banking, payments modernization, and fintech licensing all lack clear outcome based benchmarks for success with transparent reporting, leaving startups and investors facing prolonged uncertainty.
Government Procurement as a Fintech Growth Escalator
Cardell highlighted procurement as a powerful lever for scaling firms. In the UK, public procurement represents £385 billion annually. Used strategically, it can help innovative firms scale into global leaders.
Canada’s Phoenix pay system failure illustrates what happens when procurement excludes startups and fintechs. Instead of relying solely on a single legacy vendor, the government could have piloted payroll fintechs and scaled those that proved reliable. This approach would have reduced project risk, avoided billions in overruns, and nurtured homegrown fintechs with export potential. The Phoenix example demonstrates why procurement should be used to actively build capacity for Canadian innovators, which can be accomplished in several ways.
See: Innovative Approaches to Smarter Regulation
Demand Generation
Government is the largest single purchaser in the economy, and directing even a fraction of that demand toward fintech solutions can create the credibility these firms need to raise capital and expand. For example, the government could launch vendor challenges for small business lending platforms or digital payment systems for rebates, benefits, and tax refunds. Winning firms would gain real contracts that prove their technology works and make it easier to raise more investment. This type of procurement not only meets government requirements but helps Canadian fintechs grow at home and compete abroad.
Scaling Escalator
Too often, fintechs win small pilots but never graduate to meaningful contracts. A staged model, where early pilots can transition into scaled adoption if they meet performance benchmarks, would help promising firms grow into national providers. This escalator effect is critical in financial technology, where credibility with one large client can unlock commercial opportunities globally.
Regulatory Bridge and Clarity
Fintechs often face a Catch-22 where they can't win major contracts without clear regulatory status, yet regulators hesitate to provide clarity until the firm has proven market traction. Procurement could break this cycle by acting as a regulatory bridge. If a fintech wins a vendor challenge for services such as digital identity or payments, the process could be designed to include early regulatory sign-off or tailored supervisory guidance. This would give the fintech and its backers confidence about compliance costs and expectations, while also reassuring the public that safeguards are in place from the start.
See: Overcoming Barriers to Growth in Financial Regulation
Taken together, the above examples could use government procurement as a genuine scale-up escalator. So instead of simply selecting incumbents all the time and concentrate risks into a handful of providers that turn into an oligopoly, government purchasing could become a purposeful tool for nurturing Canadian fintechs into globally competitive firms.
Lessons and Recommendations
The CMA’s speech discusses competition as a tool for unlocking growth. For Canada’s fintech sector, three lessons stand out.
- Approvals must be streamlined so fintechs can access capital and scale without delays.
- Oversight should be applied proportionately so startups retain resources for innovation rather than compliance.
- Procurement should be used strategically to build scale up pathways through real contracts that strengthen fintechs at home and abroad.
If Canada embraced the UK's stance on competition and scale-ups, fintechs would move faster from idea to scale, investors would back firms with greater confidence, and procurement would foster globally competitive players.
Competition shouldn't be seen as a hand-brake but rather as the engine for Canadian productivity and growth.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create aa vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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