Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Research
Canada’s Stablecoin Race Enters Critical Phase
Stablecoin Research | Sep 23, 2025
Image: Stablecoin Survey Research Highlights (EY Parthenon Sep 2025)
EY-Parthenon Research: Corporates and Banks Eye Stablecoins for Cost Savings, Efficiency, and Competitive Edge
On September 15, 2025, EY-Parthenon released its latest stablecoin survey results, "Stablecoins: Adoption, Optimism, and Regulatory Clarity" (download 31 page PDF), covering 350 executives from corporates and financial institutions across the US, EMEA and other regions. Research takeaways confirm adoption is picking up speed, supposed by regulatory clarity by the GENIUS Act, recently signed into law.
Stablecoin Adoption Gains Momentum
- 13% of organizations have already used stablecoins
- 23% of financial institutions
- 8% of corporates
- Professional services leads current usage at 23% followed by financial services at 21% and technology at 17%
- Among non-users, 54% expect to adopt stablecoins within six to twelve months
See: Amazon and Walmart Exploring Merchant-Led Stablecoins
Why is this happening? Approval of the U.S. GENIUS Act is a regulatory catalyst. Further, pilots are proving real value and corporate treasurers are under pressure to improve efficiency. The thinking is that organizations delaying adoption risk losing ground to competitors who are moving forward and benefiting from the lower cost and faster transactions of stablecoin technologies.
Cost Savings Strengthen Use Case
- 41% of corporates already using stablecoins report more than 10% savings on cross border transactions
- 67% of professional services firms report saving between 10% and 20%
- Mid sized companies between $500M USD and $1B USD in revenue report savings of 10% to 20%
- Almost three quarters of corporates expect to realize savings of at least 10%
Why is everyone saving money by using stablecoins? The reason is straightforward. Traditional cross border payments involve multiple intermediaries, each adding fees and time. Stablecoins bypass these frictions and settles instantly, so the cost savings are structural (not incremental). For fintech providers, there's a growing opportunity to provide integration and risk management tools to help corporates adopt/use stablecoins and measure their effectiveness.
Cross Border Payments Most Popular Use Case
- 62% use stablecoins to pay suppliers and 53% accept cross border payments from partners
- 77% of corporate users rank paying suppliers ranks as the top use case, followed by 52% cheaper transaction costs, 45% faster settlement times, and 34% indicate 24 hour liquidity
- Consumer adoption is also gaining traction with 44% of users already accepting customer payments in stablecoins
See: VoPay Unlocks Real-Time Wallet Payouts and Global Reach
The reality is that we live and function in a global economy where delays can disrupt supply chains, so it's not surprising that corporates will adopt stablecoins for faster and more streamlined and predictable settlement solutions. This means that stablecoin adoption will likely strong and swift among B2B supplier and trade finance flows before expanding more widely into consumer payments.
Regulation is the Biggest Barrier
- 73% of survey responders say that regulatory uncertainty is the leading concern (strongest in Asia at 81% and Europe at 79%)
- 38% cite accounting and tax clarity as the second barrier
- Limited banking support is also holding back adoption, especially in Europe where 51% of corporates identify it as a challenge
In Canada, regulatory inaction is catching up with market momentum. On September 19, 2025, regulators like OSFI have warned the Prime Minister Mark Carney that Canada should accelerate federal stablecoin rules to avoid falling behind global peers. The Bank of Canada has echoed this call, saying stablecoins should be as safe and stable as the balance in your bank account. OSFI is already drafting a new framework to regulate stablecoin issuers, while domestic momentum is building as Tetra Digital Group secured $10M from Canadian banks and fintechs to launch a CAD stablecoin in 2026. Observers including investor John Ruffolo warn in his Looming Stablecoin Storm substack that without clear domestic rules, Canada risks ceding innovation, competitiveness and monetary sovereignty to jurisdictions that move faster.
See: Stablecoins Are Growing Faster Than You Think
Canadian corporates and fintechs need to plan not just for current global trends, but for a new local regulatory stablecoin framework. Firms are advised to engage with policymakers to create the right environment, build compliance ready infrastructure now and position for interoperability with USD pegged tokens and domestic stablecoin initiatives.Waiting could result in higher compliance costs, restricted access, and eventually a decline in market share.
Banks and Financial Institutions Preparing to Scale
- Only 15% of financial institutions currently offer stablecoin services but 57% are actively exploring entry
- The top planned offerings are on and off ramps and wallet infrastructure, each at 56%. Nearly half plan to monetize through transaction based fees
- By 2030 financial institutions expect stablecoins to account for between 5% and 10% of global payments, representing approx $2.1T USD and $4.2T USD annually
Bottom line is banks understand that clients will demand stablecoin services and that failure to provide them risks their disintermediation. There's an intensifying race between traditional institutions and fintech challengers to capture stablecoin transaction flows.
Integration Challenges Will Drive Partnerships
- 41% of corporates believe they can integrate stablecoins with moderate effort while 36% expect major systems changes
- About 70% say they would be more willing to adopt if stablecoins were integrated directly into ERP systems
- Corporates prefer to adopt through their existing banks, with 63% identifying financial partners as their preferred channel and 68% citing banks as their preferred issuers
- On the institutional side 79% plan to rely on third parties for infrastructure
See: Stablecoin Payments Have Wings – Are You Ready?
Hybrid build and partner strategy. Corporates are demanding trust and compliance, while financial institutions know they cannot deliver the full stack alone. This means that partnerships between fintechs, banks and technology providers will determine how quickly stablecoin adoption scales.
Outlook
Stablecoins are moving from pilot projects into enterprise strategy. Corporates see real cost savings and competitive advantage, while financial institutions are preparing to build services at scale to meet client demand. Regulation is beginning to catch up, led by the GENIUS Act in the US, but the global landscape is unbalanced while Canada’s fintech ecosystem is calling on the federal government to create and regulate a stablecoin framework to remain aligned and competitive.
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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CVCA: Ontario and AI Drive $297M in Seed Deals H1 2025
Report | Sep 19, 2025
Image: H1 2025 Seed Investing in Canada by Vertical (CVCA Intelligence)
US Investors Retreat as Canadian VCs Focus On Selective Deals
On September 11, 2025, the Canadian Venture Capital and Private Equity Association released its latest report, "The Current State of Seed Investing in Canada", covering tracked investment activity in the first half of 2025. The report recorded $297M invested across 133 seed stage deals in H1 2025.
Select Takeaways
- Seed money is steady but pace is faster. The average seed round cheque size was $3M in H1 2025, the same as in 2024 and below the $4.09M peak in 2023. Total investment reached $297M in just six months, already matching all of last year
- Ontario sets the pace. With $115.1M invested across 36 seed deals, Ontario continues to lead the pack. Quebec was next at $66.1M. Startups outside these hubs face more friction raising capital, though notable exceptions exist such as PEI’s $6.3M single deal
See: Canada’s Productivity Depends on Intangible Tech Adoption
- AI is the growth engine (no surprise). AI raised $24M across 12 deals ($3.9 pre-seed + $20.1M seed) in H1 2025, making it the largest vertical by both dollars and deal count.
- US money is pulling back. US participation dropped to 27.9% of Canadian seed rounds in H1 2025, down from 35.9% in 2023. This is a decline of 8 percentage points, or nearly 30% lower year over year
- Fintech is active but secondary. The combined pre seed and seed verticals chart puts fintech at about $9M, far behind AI. For fintech founders, this means rounds are achievable but require inclusion of AI fintech to stand out AI and SaaS peers
Five Questions Entrepreneurs Are Asking
1. Is seed capital still flowing in Canada, or has the tap run dry?
It's still flowing but selectively. There were 133 rounds worth $297M in H1 2025. The average cheque was $3M, the same as 2024 and down from the $4.09M peak in 2023. But total capital already reached $297M in just six months, equal to all of last year. For entrepreneurs, this means investors are still active but expect clearer proof points before committing. Traction and defensible technology are key.
2. Where are the most active funding hubs?
Ontario pulled in $115.1M across 36 seed deals, nearly 40% of the total. Quebec followed with $66.1M, while Alberta and BC contributed $32.4M and $28.5M. PEI landed a single $6.3M seed round. If you are outside Ontario and Quebec, you may need a lead investor from one of those provinces to close a strong round.
See: The Rise of Private Markets and Opportunities for Fintechs
3. Which sectors are actually commanding investor dollars?
AI is the leader at $24M across 12 seed deals. Construction tech ($15M across 2 deals) and SaaS ($12M across 4 deals) follow. Founders building in other sectors must benchmark carefully. For example, Fintech raised about $9M across pre seed and seed combined, making it harder to get noticed without a compelling angle.
4. What does the pre seed pipeline look like?
AI again tops the list with $3.9M, followed by digital health at $2.5M. These are modest totals compared to seed, but they set the stage for the next generation of seed deals. Pre seed founders should expect smaller, milestone driven rounds focused on proving product market fit and lining up accelerators, early angels, and alternative finance options like investment crowdfunding.
5. US investment participation in seed deals is declining, how does that affect me?
US investors joined only 27.9% of Canadian seed deals in H1 2025, down from 35.9% in 2023. That is nearly a 30% relative decline. This means Canadian VCs and early stage angels and retail investors are the main gatekeepers at seed. Entrepreneurs should build domestic investor relationships first and then US and global investment pathways.
See: Larry Fink’s 2025 Fintech Vision for Capital Markets
Image: Seed Investments 2021-2025 H1 (CVCA Intelligence)
Five Questions Investors Are Asking
1. Are seed rounds shrinking in size?
They have stabilized with the average seed cheque was $3M in H1 2025, unchanged from 2024 but down from $4.09M in 2023. Total deployment hit $297M in H1 2025, already at the full year 2024 level. For investors, that means steady ownership opportunities but faster deal flow.
2. Which provinces provide the best pipeline depth?
Ontario ($115.1M across 36 deals) and Quebec ($66.1M across 18 deals) dominate. Alberta ($32.4M) and BC ($28.5M) offer steady but smaller pipelines. For investors, this concentration could means better syndication opportunities in Ontario and Quebec, but higher competition as well.
See: Investing in the Future of AI and Blockchain
3. Which sectors deserve capital allocation?
AI’s $24M across 12 deals makes it the clear leader. SaaS ($12M across 4 deals) provides repeatable playbooks, while construction tech ($15M across 2 deals) indicates appetite for capital intensive bets. Fintech’s about $9M across pre seed and seed shows it remains investable. Portfolios tilted to AI and SaaS, with selective bets in construction and fintech, balance growth with diversification.
4. What does pre seed activity suggest about future deal flow?
Pre seed AI ($3.9M) and digital health ($2.5M) dollars point to pipelines feeding into seed in the next 12 to 18 months. Investors positioning at pre seed should focus on these categories as feeders into later stage strength.
5. How should global capital trends guide strategy?
With US participation down to 27.9% from 35.9% last year, a nearly 30% relative decline, Canadian investors are leading more rounds. Other foreign investors ticked up to 10.5%. As a result, early rounds are relying more on domestic syndicates but Series A and B rounds will still require US follow on capital. Investors need to reserve capital and cultivate cross border relationships early.
In Conclusion
Seed investment in Canada is concentrating in AI and Ontario while running ahead of last year’s pace. For entrepreneurs, it means tighter pitches and focusing on hubs where money is flowing. For investors, it means disciplined bets on AI and SaaS, while keeping an eye on steady sectors like fintech to diversify portfolios.
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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Agentic AI in Banking From Pilots to Real Impact
AI Research Report | Sep 15, 2025
Image: Banking Use of Agentic AI (Figue 1, MIT Insights Survey 2025)
70% of Bankers are Using Agentic AI and Only Those With Governance, Trust, and Skills Will Win
A recent MIT Technology Review Insights survey of 250 global banking executives found that 70% of banks already use agentic AI, with 16% running live deployments and 52% in pilots. For Canadian financial institutions and fintechs, the race is on with global competitors embedding AI solutions into compliance, fraud prevention, and customer service at scale.
Banks Turn to Agentic AI for Fraud Detection and Security
Fraud detection and IT security are setting the pace. More than half of executives report that agentic AI is already highly capable in fraud detection (56%) and security (51%), with efficiency gains and customer experience improvements each cited by 41%. These use cases are significant because fraud losses are rising and regulators are upping their game on cyber resilience.
See: RBC and Cohere Partner on ‘North for Banking’ AI Platform
Practical applications include mortgage underwriting, small business lending, collections, dispute resolution, and know-your-customer KYC compliance. By using agentic agents together with expert human oversight, banks are compressing decision times from weeks to days and freeing time for employees to focus on higher value work.
As HSBC’s Ian Glasner puts it, “Think of agentic AI as like an intern helping you get all of the more simplistic tasks done, but the human is still there to oversee and take the final decision.”
Governance, Skills, and Data Remain Adoption Hurdles
Image: MIT Insights Banking Survey 2025 (Figure 6 Challenges, Agentic AI)
The survey also suggests that adoption challenges are growing, top three barriers include: 1. Governance, risk, and compliance (63%), 2. Shortage of technology skills (58%), and 3. Poor data quality and integration (54%).
To overcome, Canadian banks and fintechs should focus on resolving weak data linkages across silos and the shortage of AI ready talent needed to scale responsibly.
See: Retail Banking Platforms and VC Trends 2025
Trust compounds the issue. An EY study found that only 42% of consumers trust financial institutions to manage AI in their best interest, while 30% say they do not trust them at all. That leaves a net trust level of just 12%. In Canada, regulators are focused on consumer protection, and fintechs that build trust into their AI systems could gain an edge.
How DBS and HSBC Set Benchmarks for Agentic AI Governance
Leading institutions are building playbooks worth watching. DBS Bank in Singapore applies its PURE framework (Purposeful, unsurprising, respectful, and easy) to explain all customer facing AI systems. If performance metrics breach preset limits, a kill switch halts the system in real time. As DBS’s Nimish Panchmatia warns, “Agentic AI is a continuous journey. If done properly, there’s significant value at the end of it. But you have to persevere.”
HSBC maintains a detailed inventory of AI systems tied to business owners, risk classifications, and model documentation to create a governance baseline across 200,000 employees in more than 50 markets.
See: H1 2025 Global Fintech Funding Slows, Some Sectors Firing
For Canadian banks and fintechs, these approaches show the value of aligning governance and technical innovation before scaling widely.
Outlook
Banks in Asia, Europe, and the U.S. are experimenting with AI at pace, and many are moving from pilots to enterprise adoption. For Canada, efficiency and risk controls are only part of the story. The real differentiator will be who earns the confidence of consumers while scaling responsibly. Agile fintechs can seize this opening. Unlike large banks weighed down by legacy systems and regulatory complexity, fintechs can design AI solutions that are transparent, accountable, and 'trust first' from the start.
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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Fintech Drives UK Start-up Growth With $4B in 2024 funding
Report | Sep 11, 2025
Image: Startups and Scaleups in UK Tech Sectors (Bennett School of Public Policy, Cambridge University)
UK Matches US in VC Intensity but Lags in Scale
On September 8 2025, the Bennett Institute for Public Policy (part of Cambridge University) published their latest research called, "Start-ups and scale-ups in UK technology sectors" (37 page PDF).
Fintech stands out as the country’s strongest UK tech sector, attracting the most venture capital investment. While the UK can now go toe to toe with the US in venture funding intensity relative to GDP, the scale of available capital, the reliance on foreign investors, and the dominance of acquisitions as an exit route continue to impact the growth pathways for UK start-ups.
Fintech Leads the Pack
Fintech remains the UK’s top sector for venture funding, showing the strength of financial innovation in London and across the country. Other sectors are growing quickly but fintech continues to set the pace.
See: Revolut Finally Receives UK Banking License (after 3 years)
- Fintech start-ups raised $4.0B in 2024 (most of any sector)
- Enterprise software and health each raised $3.3B
- Energy attracted $2.2B, while travel funding grew 4.2× to $518M and robotics grew 2.7× to $1.3B
Reliance on Foreign Capital Is Increasing
The UK start-up ecosystem is attracting more foreign capital, especially from US investors. This fuels growth but raises questions about longer term independence and resilience.
- US investors contributed $6.0B to UK companies in 2024
- Domestic UK investors put in $5.2B
- From 2014–2024, the US share of inflows grew from 30.8% → 37.5%, while the domestic share fell from 36.9% → 32.4%
- A 2024 study referenced in the report suggests 1 in 10 US VC investments leads to HQ relocation abroad
Regional and Emerging Hubs
London continues to dominate investment but other regions, particularly those linked to world-class universities are growing their presence.
See: UK to Cut Regulatory Red Tape to Boost Tech and Growth
- London accounted for 58% of UK equity investment in 2024
- North West: 10%, East of England: 8%, South East: 7%, Scotland: 5%
- Cambridge drew $1.2B, and Oxford $675M in venture capital
Exit Liquidity Dominated by Acquisitions
Acquisitions are still the most common path for UK start-ups to generate investor returns. IPOs are still part of the picture but account for a much smaller share than in the US.
- In 2024, the UK recorded 291 VC-backed exits worth $15.7B
- 87% were acquisitions (253 deals), close to the US share of 86%
- IPOs made up 1.4% of UK VC-backed exits versus 4.7% in the US
- IPOs in the UK have declined by 87% since 2014
- Unicorns like Monzo and Revolut are weighing listings in New York as well as London
Intensity Versus Scale In Venture Markets
The UK now matches the US in terms of VC intensity relative to GDP, but it still lags far behind in total dollars raised. This gap matters most for later-stage fintech rounds.
See: Rachel Reeves: UK’s Financial Innovation Blueprint
- VC investment share of GDP in 2023: UK 0.57% vs US 0.55%
- VC investment volumes in 2024: UK $16.4B vs US $191.0B
- UK ranks 3rd globally in venture market size behind only the US and China
Why This Matters
London UK and other emerging hubs offer a vibrant, capital rich and globally attractive place to build but its reliance on foreign capital and the dominance of acquisitions as an exit route are challenges. Similar to Canada, the UK must building deeper domestic pools of later stage capital, strengthen listing markets, and support regional ecosystems to encourage more fintech start-ups to scale and stay anchored in the UK economy.
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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Canada’s Public Sector Costs and Productivity Gap
Economy | Sep 2, 2025
Image: Projecting Federal Personnel Expenses (Aug 28, 2025, PBO)
PBO Warns of Rising Federal Labour Costs as Union Pressures Deepen Canada's Productivity Gap
On August 28, 2025, the Office of the Parliamentary Budget Officer published a report titled, 'Projecting Federal Personnel Expenses', projecting that personnel expenses will climb past $76B by 2029/30. While the report does not address productivity directly, rising labour costs combined with low private-sector investment risk deepening Canada’s productivity gap.
Federal Labour Costs Climb Past $76B
Parliamentary Budget Officer (PBO) Yves Giroux projects that total federal personnel spending to increase from $71.1B in 2024/25 to $76.2B by 2029/30. By the end of the period, the average cost per full-time equivalent (FTE) employee will reach $172,000, up from $136,345 in 2023/24. This includes salaries, pensions, overtime, severance, and extended health and disability benefits. Salaries and standard benefits alone account for about $139,000 of the cost per employee.
See: Canada’s Productivity Depends on Intangible Tech Adoption
FTEs are expected to climb to 442,000 by 2029/30, with 87% of the workers with permanent job status (highest since 2015). Personnel costs already represent the largest federal operating expense, creating direct pressure on the government’s commitment to both cap public service employment and deliver a balanced operating budget.
Productivity Gap With Global Peers
In 2023, Canada’s GDP per hour worked was $74.7 compared with $97.0 in the United States, highlighting the persistent productivity gap. Business R&D spending in Canada is only 1.0% of GDP which is far lower than the 2.6% of GDP invested in the United States. Higher education R&D in Canada accounts for about 0.6% of GDP, but spillover into private sector innovation remains limited.
Unionization, Oligopolies, and Job Action
When media outlets report more job action in Canada is on the horizon, it makes us wonder about the structure of Canada's labour force and it's impact on key metrics like productivity. Canada’s overall unionization rate is 30.4%, far higher than the US (10%) and UK (22%), which is of course highly concentrated in the public sector.
Large strikes, such as the 155,000 worker Public Service Alliance of Canada strike in 2023, spotlight the economic impact of government and quasi-government labour actions. The risk extends beyond the core federal workforce. Many of the most disruptive strikes occur in federally regulated oligopolies such as rail, ports, airlines, telecom, and banking. These sectors are nominally private but face little competition and operate under heavy federal oversight. As a result, labour disputes in these industries have a similar impact to public sector strikes, magnifying service bottlenecks in trade, transportation, and communications. Combined with a large public workforce, the exposure of Canada’s economy to union job action(s) is amplified.
See: [Event Oct 8]: Rotman Debate on Canada’s Oligopolies
While the PBO report does not attribute rising personnel costs directly to unions, collective bargaining settlements, job actions, and the limited competition in federally regulated industries all add further pressure on expenses and productivity.
Stability Has Defined Canada’s Model, But It's No Longer Enough
Global investors trust Canada's institutions, regulatory framework, and rule of law. These qualities explain why Canada consistently attracts foreign direct investment and maintains one of the world’s top competitiveness rankings despite low productivity.
But stability alone will not carry Canada through the next decade. The global order is shifting toward regions that pair institutional reliability with high productivity and innovation intensity. The United States is pulling ahead with business R&D at 2.6% of GDP and workforce productivity nearly 25% higher than Canada. The European Union is leveraging scale and industrial policy to anchor advanced manufacturing and clean energy. Asian economies are combining strong institutions with aggressive technology investment.
Canada cannot afford to define competitiveness only as political or financial stability. A system that prioritizes protecting incumbents in concentrated industries, expanding public payrolls, and absorbing rising labour costs may sustain trust, but it does not generate growth.
Without a structural shift toward business R&D, more open competition in regulated sectors, and productivity and innovation focused policy, Canada risks being left behind in a global economy where innovation (and not stability alone) determines long term growth and prosperity.
Implications for Fintech and Investment
The implications are strong for fintech and financial services. Canada’s federally regulated banking and telecom sectors function as oligopolies, shielding incumbents while limiting space for fintech entrants to scale. High labour costs and frequent disruptions in related regulated industries, such as rail and ports, add to the overall cost base and economic drag.
See: Canada’s Competition Plan Is Getting More Serious
At the same time, foreign direct investment continues to flow into resource and real estate sectors, while technology and financial innovation receive less priority. Without targeted policy that directs investment into sectors that can significantly boost productivity, Canadian fintechs will remain at a structural disadvantage compared to peers in the US, EU, and Asia.
Outlook
Canada's competitiveness outlook in the longer term hinges on opening competition in regulated sectors, strengthening private sector R&D, and ensuring that a greater share of FDI flows into innovation rich sectors like financial technology.
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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BlackRock Tests Multi Agent AI in Equity Portfolios
AI Aug 27, 2025
Image: Freepik AI
BlackRock Research Shows AI 'Stock Picking' Agents Beat Benchmarks
For generations, investors have imagined a system that could analyze company filings, market news, and stock prices without bias, synthesize all the information, and generate transparent recommendations. Until now, this dream has remained out of reach. New research by BlackRock, the world's largest asset manager, finds that multi agent artificial intelligence may finally bring this vision closer to reality.
See: Peirce: You Can Tokenize Securities but Not Skip the Rules
A collection of specialized large language model agents called AlphaAgents who collaborate and debate with each other have proven to outperform benchmarks in certain back tested cases and to provide explainable decision making trails that mirror investment committee discussions.
How AlphaAgents Works
The system uses three unique agents with focused expertise to deliver a type of collective intelligence into portfolio construction.
- A fundamental agent evaluates company filings and financial statements.
- A sentiment agent reviews analyst ratings and market news.
- A valuation agent studies historical prices and trading volumes.
Instead of outputting isolated judgments, the agents debate until they reach consensus which produces a stronger investment view aligned with specific risk profiles.
Back Testing Evidence
The BlackRock team tested AlphaAgents on 15 technology stocks between February and May 2024. In practical terms, the back test showed that multi agent reasoning can deliver superior returns in balanced mandates and greater stability in conservative ones.
Four portfolios were created. One for each single agent, plus a multi agent consensus portfolio. These were compared against an equally weighted benchmark with the results showing measurable gains and improvements.
See: Goldman Sachs Deploys Agentic AI Engineer Devin
With a neutral risk setting, the multi agent portfolio outperformed single agent portfolios and the benchmark on cumulative returns and rolling Sharpe ratios. A case example showed one stock gaining 13.56% in January 2024, far ahead of the 3.85% increase in the S&P 500.
Interestingly, using the risk averse setting, all agent portfolios underperformed the benchmark during a technology rally, but the multi agent portfolio still produced lower volatility and smaller drawdowns, demonstrating its value for downside protection.
Implications for Wealthtech
The difference between a 13.56% stock return and a 3.85% market return in the same month illustrates why investors have long dreamed of such systems. AlphaAgents not only captured the upside but also flagged risks such as insider selling and negative operating margins.
For managers and advisors, this means decision support that is both measurable and transparent.
See: AI’s Double-Edged Sword of Retail Investing
AlphaAgent debate logs are like committee notes, creating an audit trail that supports compliance and strengthens client conversations.
For regulators, the full record of data inputs and reasoning provides an unprecedented level of model oversight.
Conclusion
While there are back testing limitations of evaluating a mere four month window across 15 tech stocks, there's real evidence now that multi agent AI systems can produce superior ROI and risk management in risk neutral strategies. If integrated into live portfolios, these systems could in fact significantly alter equity investing.
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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H1 2025 Global Fintech Funding Slows, Some Sectors Firing
Global Fintech Report | Aug 22, 2025
Image: Pulse of Fintech H1 2025, KPMG
Fintech Investment Hits Five Year Low, but Digital Assets, AI, and Regtech Gaining
According to the KPMG Pulse of Fintech H1 2025 report (67 page PDF) published in August 2025, global fintech investment in the first half of 2025 fell to $44.7 billion across 2,216 deals, recording the lowest H1 total since early 2020. Investors remain cautious about elevated risks around higher interest rates, capital costs, and geopolitical uncertainty. Q2 2025 was particularly weak, with $18.7 billion across 972 deals.
Regional Divergence
- Americas attracted $26.7 billion, accounting for more than half of global fintech investment
- EMEA $13.7 billion, driven by large buyouts and consolidation activity
- ASPAC lagged with $4.3 billion, showing the most pronounced slowdown
Top Global Fintech Trends in H1 2025
1. Digital Assets Rebound Strongly
Investment in digital assets totalled $8.4 billion across 586 deals in H1 2025. Stablecoins attracted attention for payments and remittances in emerging markets, while tokenization platforms and infrastructure also captured capital. Circle's IPO anchored the sector’s strength, raising $1.1 billion with shares jumping 168% on day one.
2. AI Is Transforming Fintech Models
AI continues to boost fintech investment. Capital flowed into both AI native startups and to incumbents embedding AI in credit scoring, fraud detection, and customer engagement. Investors prioritized business models that combined growth with efficiency and risk control. See NCFAs coverage of AI Fintechs attracting a 242% valuation premium
3. Regtech Gains Momentum
Regtech attracted $2.1 billion across 190 deals in H1 2025. Adoption of automated KYC, AML, and reporting tools continues to grow as financial institutions look for cost savings and regulatory agility. GenAI in risk and compliance
4. Wealthtech and Insurtech Consolidation
Insurtech raised $4.8 billion across 141 deals in H1 2025, which is already greater than all of 2024. Wealthtech funding reached $0.9 billion across 14 deals, with AI enabled platforms a recurring theme. Both sectors experienced consolidation as incumbents prefer acquisitions over building new capabilities.
5. Payments Infrastructure Still the Backbone
Payments investment slowed to $4.6 billion across 242 deals in H1 2025, as investors grew more selective. But the sector is still foundational with capital being allocated to embedded finance, cross border platforms, and transaction monitoring. For Canada’s policy context see open banking delays and competitiveness and banks exiting merchant acquiring businesses like Moneris.
6. Cybersecurity Funding Is Soft
Cybersecurity specific fintech investment was just $0.1 billion across 26 deals in H1 2025. Despite heightened threat levels, most activity was concentrated at seed and early stages, reflecting investor caution toward scaling security focused fintechs.
7. IPOs and Exit Activity Pick Up
Exit momentum is returning. Circle’s successful IPO may open the door for additional digital asset platforms to list in H2 2025, boosting the case for fintech exit activity after years of lack lustre listings.
Top 10 Global Fintech Deals in H1 2025
- Preqin, $3.2B, London, UK, Information, Buyout
- Next Insurance, $2.6B, Palo Alto, US, Insurtech, M&A
- Binance, $2B, George Town, Cayman Islands, Digital assets, Late stage VC
- Esker, $1.7B, Villeurbanne, France, B2B and back office, Take private
- NinjaTrader, $1.5B, Chicago, US, Investment management, M&A
- Enfusion, $1.5B, Chicago, US, Wealthtech, M&A
- Hidden Road, $1.25B, New York, US, Digital assets, M&A
- Converge Technology Solutions, $916.5M, Toronto, Canada, Fintech services, Take private
- SafeSend, $600M, Ann Arbor, US, B2B and back office, M&A
- Plaid, $575M, San Francisco, US, B2B and back office, Late stage VC
See: U.S. ACCESS Act Advances to Ease Crowdfunding Rules
Outlook for Canada
For Canada, the data shows the window of opportunity for digital assets, AI, and regtech could attract investment with clear policy and infrastructure. The muted state of payments and open banking highlight gaps Canada must address to remain competitive. Clear rules, targeted support, and investment in digital infrastructure are critical to positioning Canadian fintech for growth in the second half of 2025 and beyond. See the crisis Canada and fintech cannot afford to waste
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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