Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Canada and Trump Risk Index What Fintechs Need to Know
Policy | Nov 19, 2024
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Preparing Canadian Fintechs for an Era of Trump's Policies
The idea of Trump returning to the White House is stirring up questions about how it will shake things up globally, especially for Canada and its fintech companies. The Economist Intelligence developed the Trump Risk Index (TRI) showing just how much trade, security, and immigration policies might shift. For fintechs looking to stay ahead of these changes, it means thinking strategically, staying resilient, and understanding what’s at stake.
Canada is Heavily Dependent on the U.S. Market for Trade
Canada’s economy is closely tied to the United States, its biggest trading partner. In 2023, Canada exported about $439.6 billion USD to the U.S., making up over 70% of its export revenue.
- Trump will likely introduce new trade barriers like tariffs on goods such as aluminum and cars. Trump's America's First policies may also encourage U.S. companies to rely less on foreign suppliers which could adversely affect Canadian fintechs working in areas like supply chain finance and trade facilitation. Same goes for cross-border partnerships for services like payments and lending. These businesses might experience higher costs or disruptions to their operations.
See: Can Fintechs Help Narrow Canada’s Prosperity Gap?
- In September 2024, Canada reported a trade deficit of C$1.26 billion which was larger than expected. This was the seventh month in a row that Canada reported a trade deficit with exports to countries other than the U.S. experiencing significant declines.
- The Canadian dollar has weakened against the U.S. dollar partly due to the uncertainty over U.S. economic policies and has dropped below 1.4 psychological support level. Fintechs that manage international transactions will be impacted by currency fluctuations.
- Fintechs should diversify service providers across multiple regions to offset potential disruptions.
- Fintechs should monitor for any changes in cross-border payment regulations and prepare for adjustments in pricing or service frameworks.
Increased Pressure to Spend More on Security
Canada's defence spending in 2022 was only 1.24% of GDP, one of the lower contributors within NATO. Canada has consistently fallen short of NATO's guideline of 2% of Gross Domestic Product (GDP). Trump has said many times on the campaign trail that the U.S. will push NATO allies including Canada to increase their defence spending or the U.S. will not protect them. In response, Prime Minister Trudeau announced that Canada would meet its 2% GDP target by 2032. So what does this mean for fintech?
- Canada's federal budget will have added pressure making it more difficult to invest in areas like innovation and technology, which is key for fintech growth.
- Also fintech firms need to be aware of indirect effects of a shifting security landscape. For example, greater emphasize may be placed on protecting critical infrastructure such as stricter rules about where data can be stored and how it flows across borders.
See: Reversing Canada’s Digital Economy Productivity Decline
- Fintechs that rely on cloud servers based in the U.S. or that handle sensitive financial data internationally should prioritize compliance with data sovereignty regulations (especially if operating in multiple jurisdictions).
- Fintechs should work with cybersecurity experts to protect their users and environment against increasing risks in a politically charged climate.
Talent Mobility at Risk (Immigration)
If Trump enacts stricter immigration rules in the U.S., it could limit access to skilled labour and make it harder for fintechs to operate offices in the U.S. or attract global talent.
- Skilled professionals in tech and finance might find it harder to obtain U.S. visas, which could impact Canadian companies operating south of the border.
- With the U.S. becoming less welcoming, Canada has the chance to attract global talent. Programs like the Global Talent Stream make it easier and faster for skilled workers to come to Canada, helping fintech companies build innovative and diverse teams.
- But not everyone in Canada sees high immigration levels as a positive. There’s growing debate about how immigration affects the economy and culture. The Canadian government already announced plans to reduce immigration targets. Such reduction will shrink the talent pool for fintech companies who need to keep growing and compete globally.
- Fintechs should continue to build remote work capabilities to optionally access talent from regions unaffected by changing U.S immigration policies.
Regulatory Uncertainty
Based on Trump's initial term, markets can expect to experience deregulation (on some level) and/or abrupt shifts in financial service policies that might disrupt existing frameworks that fintechs rely on, especially in payments, lending and blockcain/crypto.
- President-elect Donald Trump announced that Elon Musk and Vivek Ramaswamy will lead a new private initiative called the Department of Government Efficiency (DOGE) to advise the White House on cutting regulations and reducing spending that would disrupt the system and hold government accountable.
- Trump’s administration could encourage less oversight for banks which might intensify competition for fintech lenders.
See: Innovative Approaches to Smarter Regulation
- Bitcoin and Crypto markets have pumped significantly higher since Trump won the election but some experts are concerned that markets could turn if Trump doesn't deliver many of his campaign promises. Trump is pro-crypto and he already stated that he would fire the current SEC Chair Gary Gensler on day one of assuming office, companies should prepare for a balanced reality where crypto firms could face heightened regulatory scrutiny if the U.S. develops a clear framework for the crypto sector especially around issues like fraud, anti-money laundering, and national security. During Trump's initial term his administration shifted back and forth between support for blockchain innovation and aggressive actions against decentralized cryptos perceived as risky.
- Fintechs should invest in compliance frameworks to adapt to upcoming changes, especially for Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
- It's imperative for companies in both Canada and the U.S to stay current on all regulatory developments.
What This Means for Canadian Fintechs
Canadian fintechs should take a proactive and strategic approach in anticipating of Trump's incoming administration.
- Diversify partnerships and markets beyond the U.S. For example, strengthen ties with Europe through the Canada-European Union Trade Agreement (CETA) or Asia-Pacific markets under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could help reduce dependency on American markets.
- Prioritize regulatory compliance, build adaptable compliance frameworks, and closely monitor U.S. financial regulations, particularly around crypto and blockchain.
See: Canada’s Rising Tax Burden and Fintech Opportunities
- Invest in a good cybersecurity program to minimize potential disruptions.
- Adapt talent acquisition strategies per shifting immigration policies in both the U.S. and Canada.
Why It Matters
The return of Trump to the White House could bring heightened risks but also unique opportunities. Fintechs that want to thrive in this new changing global landscape must proactively prepare for these challenges as soon as possible.
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 a 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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