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
Narwhal Project: Growth Insights from the Class of 2014
Scale-up Research | Dec 18, 2024
Image: The Class of 2014 (Narhwal project, Charles Plant)
Scaling Canadian Fintech and Lessons from the Narwhal Project Class of 2014
Ten years ago Canada’s tech sector had launched 260 startups that had raised at least $500,000 in what became known as the "Class of 2014" (14 page PDF). These companies not only showed early promise and were supported by the ecosystem at the time to kickstart their journey.
Charles Plant, founder of The Narwhal Project and an expert in scaling companies analyzed how the class of 2014 performed over the past decade, comparing their progress with international comparators like the U.S., UK, Israel, France, and Germany to gain deeper insights into the wins and struggles of Canadian startups. For fintech entrepreneurs, these data-driven insights offer powerful lessons about the art of scaling. This article explores strategies to scale in today's competitive global market.
Strong Start, Weak Scalability
It's certainly not the first time you've heard this about Canada's entrepreneurial ecosystem including in fintech - see Canada's innovation paradox: strong start, missing impact. Or dare I say like the Toronto Maple Leafs!
So here's the good news. The data analysis confirms that Canadian startups are good at raising early-stage funding (think Pre-seed, Seed, Series A). The Class of 2014 companies raised an average of $30 million each, which outpaced many peers in the study including France, Germany, the UK, and Israel yet lagged the U.S. with average funding of $49.4 million per company. Fintech founders should feel optimistic about Canada being a strong environment for early investors (includes government).
See: Tipalti Expands Canadian Operations with Localized Solutions
But here’s the catch. Only 8.4% of these companies successfully closed a Series B funding round. That’s the lowest success rate among the countries studied and well behind Israel (16.6%) and the U.S. (13.9%). Series B is really where the rubber hits the road for many of these companies who scale aggressively by hiring talent, entering new markets, strengthening their competitive tech stack and operations.
Fintech growth often depends on scaling the acquisition of new customers and successfully navigating complex markets but the inability to rise Series B is a serious challenge that goes beyond funding and points to systemic problems, such as over reliance on government grant funding, lack of sales and marketing, smaller domestic market, and then there's the so called risk adverse culture - they all need to breakthrough and change.
20% of the Class of 2014’s top companies relied on grant funding in their last raise, which was more than double the rate of any other country. Use grants as a springboard, not a crutch, as you are operating in a competitive and market driven environment.
Fintechs Need Better Sales and Marketing
Canada’s startups don’t fail because they can’t innovate. Almost 95% of the Class of 2014 had the technical chops to build compelling products and secure Seed funding but the issue was around commercialization. They couldn't take those products to market with the save fervour as their peer countries. Many companies failed due to lack of product-market fit, couldn't identify large enough markets or couldn't market effectively/efficiently.
See: Key Findings from 2025 Advanced Payments and Fintech Survey
Fintechs need to understand that to grow, they need top customer acquisition strategies, build trust with users, and strike key partnerships with established players like banks, payment networks, enterprise platforms, or ecosystems. They should not neglect to prioritize targeted, data-driven, sales and marketing from day one. If they aren't selling, they aren't iterating.
Global Expansion An Opportunity or Distraction?
Canada is a small market. Fintech startups know this better than anyone and often look globally for expansive growth but the Narwhal Project’s data shows why this isn’t always straightforward. While global markets can be lucrative, they are also highly regulated, diverse, and competitive. Take payment preferences for example. In Asia, QR codes currently dominate. In Europe, open banking laws encourage innovation and competition. In Canada, entrenched incumbents without much competition make disruption harder. Expanding without understanding these nuances can derail growth.
Fintech firms should approach global expansion as a pilot or phased rollout instead of all or nothing. Look for regions that align with your product/service offerings, such as mobile-first banking solutions for regions with large underbanked populations such as Africa or Southeast Asia. Always localize, meaning integrate with regional payment systems, learn the local cultural attitudes towards money, and build compliance frameworks for each market.
Underwhelming IPOs and Acquisitions
Canada lags in both IPOs and acquisitions. Only 2.2% of the Class of 2014 went IPO and listed on senior exchanges versus the U.S. (3.1%) and Israel (4.4%). While five Canadian companies went public on major exchanges, their average funding was just $57 million compared to the U.S. average of $364.4 million per IPO.
See: As AI-driven IPOs Take Center Stage, What Could go Wrong?
The acquisition story is similar. Only 10.4% of Canadian startups were acquired compared to 21.8% in Germany. Further, the average pre-acquisition value of Canadian companies was $12.8 million compared to $37 million global benchmark. This points to startups selling out early or missing the opportunity to grow into market leaders.
Fintechs should focus on long term value creation and instead of giving into the pressures of selling out early, founders should cultivate relationships with investors that can provide follow-on later stage funding to give the company a longer scale-up runway and unlock bigger exit opportunities. They can look to private markets. Also, organic growth is arguably underrated in fintech. In the current economic climate, fintechs are relying less on aggressive fundraising to fuel growth but are focused on profitability and revenue-first growth which attracts higher quality and deeper investors.
Takeways Fintech Growth
The Class of 2014 is like looking into a mirror as it shows Canada's strengths and weaknesses in tech, and fintech is no exception. The data shows a better playbook and pathway forward:
- Make sure your product solves a real problem for a large audience and build a business model that can grow over time before expanding too quickly.
- Invest in strong sales and marketing teams to reach the right customers and grow your market share.
- Expand internationally step by step, using data to guide decisions and adapt to local needs.
See: BoE Report: Open Banking Boosts Productivity, Competition
- Grants are okay but combine with private funding to stay competitive and set up for long-term growth.
- Focus on building a company that grows long term value and aims for bigger milestones instead of selling (out) too early.
Canadian fintechs have the potential to lead on the global stage. The challenge is clear but so is the opportunity.
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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US Financial Surveillance Report Shows Privacy in Crisis
Privacy Report | Dec 13, 2024
How U.S. Surveillance Practices Threaten Financial Privacy and Innovation
Financial privacy is at a crossroads. Another 'eye opening' report dropped December 6, 2024 by the U.S. House Judiciary Committee and the Select Subcommittee on the Weaponization of the Federal Government titled, "How the Federal Government Weaponized the Bank Secrecy Act to Spy on Americans" (47 page PDF) reveals alarming financial surveillance systems being used in the United States. Using laws like the Bank Secrecy Act (BSA), federal agencies use financial institutions to monitor millions of Americans without their knowledge or consent. These findings have serious implications for fintech, innovation, and consumer trust. There's a tug of war between security and privacy and it's reaching a breaking point.
The Scale of Financial Surveillance
Last year in 2023, financial institutions filed 4.6 million Suspicious Activity Reports (SARs) and 20.8 million Currency Transaction Reports (CTRs) with the Financial Crimes Enforcement Network (FinCEN). Over 25,000 government officials at various levels accessed this data without legal warrants to conduct over 3.3 million searches using the FinCEN Query system. FinCEN's integrated access program allowed approx. 27,000 users across nine federal agencies to download entire datasets of financial records with minimal oversight.
Financial institutions often outsource compliance tasks to third party vendors which raises questions about data security and privacy breaches under the confidentiality rules under the Bank Secrecy Act. Another layer of exposure risk.
See: Opinion: The Financial Surveillance System May Be Less a Tool for Crime Prevention than a Means of Bureaucratic Ass Covering
The report describes a system that encourages banks to over-report SARs to avoid penalties for non-compliance (even when the reported activity is unlikely to be connected with a crime or wrongdoing).
Jimmy Kirby, FinCEN Deputy Director:
"There’s the mandatory requirement and then there’s the ability to voluntarily file, as the statutory construct laid out by Congress really is to encourage filing. So... there’s the ones you’re required to file, but there’s also very much an encouragement for people to voluntarily file beyond what they’re required to file."
Weaponization of Financial Data
The use of financial data to target specific individuals or groups is critical issue for policymakers, and has been increasing in recent years. Especially after Jan 6, 2021 uprising in the U.S. where institutions were told to flag individuals on politically charged criteria, such as purchasing firearms, travel to Washington, D.C., staying at specific hotels etc.
See: Surveillance Capitalism: Policymakers must put an end to abusive practices
A similar situation happened here in Canada too during the trucker protests of 2022. Canadian federal agencies used the Emergencies Act to direct banks to freeze accounts of individuals and organizations linked to the protest. They also instructed crypto exchanges to cut off crypto user accounts linked to the protests. Donation- based crowdfunding platforms were also caught in the fire as FINTRAC's knee jerk reaction to impose unwarranted AML/ATF requirements on them without any data-driven analysis.
Daryl Hatton, Founder and CEO of FundRazr:
“In summary, the regulations are ineffective, burdensome, anti-competitive, and damaging to both the domestic donation crowdfunding sector and the Canadian nonprofit/charitable sector. The goal of protecting Canadians from money laundering and terrorism is laudable, but these regulations should be scrapped, and new regulations drafted in full consultation with stakeholders.”
Implications for Fintech and Innovation
Fintech firms operating in the U.S. (especially smaller ones) in some capacity can find themselves swamped by compliance costs which eat up valuable resources away from innovation. For example, a Canadian payment processor may find that routine transactions under Canadian regulations could trigger SARs in the U.S., adding to compliance and operational costs.
See: Privacy and Crypto Shaken as Telegram’s CEO Arrested
Or consider, a crypto platform doing business in the U.S. could encounter conflicting demands such as when U.S. regulators request data but Canadian privacy laws protect that data. These different regulatory environments create frictions.
Why It Matters
Excessive surveillance hurts consumer trust and adversely impacts the adoption of fintech solutions. Use your voice and emerging technology to demand accountability and create private, ethical systems that balance security with individual rights, ensuring a future free from weaponizing financial data inappropriately.
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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Digital Export Trends and Global Trade Fintech Opportunities
Digital Trade | Dec 10, 2024
Image: Global Trade Outlook and Statistics (WTO, Apr 2024)
WTO Global Digital Trade Growth Insights and Fintech Opportunities
The World Trade Organization published a comprehensive report on 'Global Trade Outlook and Statistics' (48 page PDF, April 2024) highlighting the growth of digitally delivered services in 2023 which accounted for 13.8% of total global exports (9% increase year over year) for a total value of $4.25 trillion.
See: IMF Working on Global CBDC Platform to Revolutionize Global Remittances and Trade
This includes categories such as IT/software development and support, financial services, media streaming, research, and e-learning. Canada ranked 16th with the United States, United Kingdom, and Ireland capturing the top 3 spots among digital exporters (see table below). There are significant opportunities for fintech in the expanding digital global trade sector.
Top 20 Digital Exporters
Visual capitalist created a great infographic that helps you visualize and compare the top 20 digital exporters table data below, view here.
| Rank | Country | Export Value (USD) | Global Share (%) |
|---|---|---|---|
| 1 | United States | $649 billion | 15.3% |
| 2 | United Kingdom | $438 billion | 10.3% |
| 3 | Ireland | $328 billion | 7.7% |
| 4 | Germany | $279 billion | 6.6% |
| 5 | India | $257 billion | 6.1% |
| 6 | France | $225 billion | 5.3% |
| 7 | Netherlands | $207 billion | 4.9% |
| 8 | China | $207 billion | 4.9% |
| 9 | Japan | $162 billion | 3.8% |
| 10 | Switzerland | $155 billion | 3.7% |
| 11 | Singapore | $153 billion | 3.6% |
| 12 | Belgium | $143 billion | 3.4% |
| 13 | Sweden | $132 billion | 3.1% |
| 14 | Spain | $128 billion | 3.0% |
| 15 | Italy | $125 billion | 2.9% |
| 16 | Canada | $118 billion | 2.8% |
| 17 | Luxembourg | $112 billion | 2.6% |
| 18 | Denmark | $110 billion | 2.6% |
| 19 | Hong Kong | $105 billion | 2.5% |
| 20 | Australia | $100 billion | 2.4% |
Select Data Insights from the Report
1. Growth by Regions
- North America: The U.S. leads with $649 billion in digital exports due to its strong technology, great infrastructure, and large consumer market.
- Europe: Countries like the U.K., Ireland, and Germany are top exporters and rank high on the list thanks to strong technology sectors and supportive government policies.
See: 2024 Global Payments Growth, Trends, and Fintech’s Edge
- Asia: India and China are rising stars and growing fast. India’s IT services grew 17% last year, and China’s digital exports doubled since 2019.
- Emerging Markets: Singapore and Hong Kong are key players in Southeast Asia, driving growth in fintech and IT services.
2. Key Trends
- Digital trade grew 9% yoy and reached $4.25 trillion in 2023. Digital services like IT and financial services enjoyed double-digit growth as more and more businesses and consumers transact more online.
- Unlike physical goods, digital services were less affected by conflicts and supply chain issues. They bounced back quickly after the pandemic with trade now 50% higher than pre-pandemic levels.
- Sustainability and ESG compliance is becoming an important part of digital trade. For example in 2023, demand for insurance services that addressed climate and geopolitical risks grew by 17%.
- Regions with smart policies and trade agreements like the EU experienced strong growth in digital services (i.e., business services alone grew by 13% in 2023).
3. Breakdown by Service Type
- Business, professional, and technical services: 41.2%.
- Computer services: 20.5%.
- Financial services: 16.0%.
- Intellectual property-related services: 10.9%.
See: Reversing Canada’s Digital Economy Productivity Decline
- Insurance services: 5.2%.
- Telecommunications services: 2.6%.
- Other personal, cultural, and recreational services: 2.1%.
- Information services: 1.5%
Fintech Opportunities in Digital Trade
1. Faster, Cheaper International Payments
Fintech companies like Wise and Ripple have democratized international payments. In Canada, Buckzy Payments is leading the charge with real-time cross-border payment solutions. Their platform allows businesses to transfer money across borders instantly which helps exporters avoid exchange rate risks and save on fees.
2. Smarter Trade Financing Options
For many exporters, managing cash flow is a challenge, especially when dealing with international buyers, however it an be easier with tools like invoice factoring and export insurance.
See: Breaking Down the Steps to Achieving Full Business Ownership in a Foreign Market
Canadian fintech FundThrough specializes in invoice factoring which is a fintech tool where businesses get paid upfront for their invoices. Their service is made for small and medium-sized exporters, helping the manage cash flow and expand internationally.
3. AI Insights to Drive Better Trade Decisions
Artificial intelligence is transforming trade decisions. Fintech companies can create platforms that analyze global markets, predict and pinpoint demand, improve trade route planning, and identify growth opportunities. Canadian AI startup, Coveo, provides businesses with advanced analytics to optimize operations and market strategies.
4. Automating Taxes and Compliance
Dealing with complex regulations and taxes is simplified by fintech solutions. Canadian company Wave Financial provides tools for automating invoicing, tax calculations, and financial compliance. While Wave focuses more on small businesses, its software can be adapted for exporters (opportunity). Imagine software that calculates tariffs, files tax reports, and ensures compliance with local laws and all in real time. This reduces errors, saves time, and helps businesses avoid costly penalties.
5. Financial Products that Promote Sustainability
Sustainability is becoming a global trade requirement. Fintech companies are creating tools that track carbon emissions, monitor ESG compliance, and provide financing for green initiatives.
See: Export resources for Canadian firms
Canadian fintech CoPower (now part of Vancity) offers green investment products such as loans for renewable energy and energy-efficient projects. These tools help companies align with sustainability goals while accessing financing for eco-friendly initiatives.
Challenges in Digital Trade
While digital trade opens up huge opportunities, it also comes with a lot of challenges that businesses must overcome to reap the rewards.
- Different tax rules in each country make it tough for exporters to stay compliant, adding extra headaches for businesses trying to expand globally.
- Increasing tariffs and trade restrictions are making it harder or more expensive for goods and services to move freely across borders.
- Political conflicts can disrupt trade routes, trigger sanctions, and create uncertainty, all adding risk for businesses looking to expand to new markets.
What Canada Needs to Do Next
To boost its ranking position as a leader in digital exports, Canada needs to invest in fintech innovation to solve practical world trade challenges. They need to build robust and reliable solutions that make global trade cheaper, more streamlined, and more predictable.
See: A Guide on Global Entity Management: Strategies & Services
Industry and government need to build more global connections and partner with global fintech hubs and trade organizations that can help Canadian fintechs tap into global expertise and markets. Canada needs simpler, trade-friendly policies to make it easier for businesses to expand their digital exports and improve Canada's competitiveness in global markets.
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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Visual Deep Dive Into Large Language Models
AI | Dec 5, 2024
Image: Large Language Models Ranked (Information is Beautiful Nov 2024)
Understanding the Growth of GenAI with LLM Rankings and Industry Insights
Information is Beautiful maintains a data rich source full of infographics that depict how Large Language Models (LLMs) like ChatGPT compare with each other from OpenAI to Google, Microsoft and even Chinese versions. This resource visually maps out the rapid growth of artificial intelligence technologies, the key players, their advancements and benchmarks such as Massive Multitask Language Understanding (MMLU).
See: FSB’s Warnings of Hidden Stakes of AI in Finance
The complex implications of AI technology is profound and continues to evolve, creating questions about its role and impact on business, culture, and the environment are becoming more important. From small language models making AI more accessible to discussions about the environmental costs of training massive systems, these topics reflect the complex implications of this technology.
GenAI's Impact on Financial Technology
Below, we’ve rounded up some insightful articles from NCFA Canada’s archives that explore these themes, providing insights into the latest trends, opportunities, and challenges in AI.
- Canada’s $300M AI Funding Targets SMEs for Growth
Did you know Canada is investing $300 million to help small and medium-sized businesses (SMEs) adopt AI? This funding is part of a broader effort to make AI more accessible and boost innovation across the country. From streamlining operations to enhancing customer experiences, this funding should give SMEs the tools the need to complete on a global scale. - The Frontline of AI’s Copyright Law Battle in 2024 | Generative AI: A Primer On Canadian AI and IP
As AI-generated content becomes more common, it raises serious questions about copyright laws. Who owns the rights to a work created by AI? This article breaks down the key legal challenges and explores how courts and lawmakers are trying to keep up with the pace of technology and is for anyone concerned about the future of intellectual property in the age of AI. - Trudeau Announces $2.4 Billion AI Funding Package
The Canadian government made a massive commitment to AI innovation with a $2.4 billion funding package. This article explores how the funding will be allocated to research, commercialization, and workforce development, aiming to position Canada as a global leader in artificial intelligence. - AI, Funding Shifts and Regulatory Hurdles in Fintech 2024
The fintech industry is rapidly evolving, thanks to AI, but it’s not without its challenges. This article dives into the funding trends shaping fintech innovation and the regulatory roadblocks that businesses need to navigate. It’s an insightful read for anyone in the financial sector. - How Small Language Models are Changing the AI Landscape
While large language models like GPT-4 grab headlines, smaller models are quietly transforming the AI landscape. This article explores how these lightweight models are making AI more efficient, affordable, and sustainable, offering exciting opportunities for businesses of all sizes. - The Environmental Costs of AI: What You Need to Know
AI is powerful but it costs the environment. This post breaks down the energy and resources required to train large models and explores strategies for making AI greener. - Generative AI and Major Human Rights Fintech Risks
This post looks at the ethical considerations of AI in fintech, emphasizing the importance of diverse training data and clear recourse mechanisms to mitigate biases and uphold human rights. - NFX: Hot List of 75 Emerging AI Startups (Seed, Series A)
Looking for the next big thing in AI? This curated list features 75 of the most exciting early-stage AI startups making waves in industries like fintech, healthcare, and entertainment. It’s a goldmine for investors, innovators, and tech enthusiasts. - A Look Inside Canada’s AI Commercialization Challenge
Canada has made huge strides in AI research, but turning that research into market-ready products is another story. This article examines the hurdles facing Canadian companies, from funding gaps to scaling challenges, and offers insights into what needs to change.
Why These Articles Matter
Whether you’re an entrepreneur, policymaker, or curious reader, there’s something here for everyone. Explore these resources on NCFA Canada and stay informed about the future of AI.
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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UK vs. Canada: A Tale of Two Different Crypto Consumers
Crypto Survey Results | Dec 3, 2024
Key Insights from the UK FCA's 2024 Crypto Consumer Research Survey
On Nov 26, 2024, the Financial Conduct Authority (FCA) published results from its latest 2024 Cryptoassets Consumer Research Survey. The UK-based survey is in Wave 5 which is part of a longitudinal survey designed to track insights and trends over time given that attitudes towards cryptoassets can evolve.
Download the 80 page PDF survey results report here
The survey data was collected from August 12-21, 2024 via an online self-completion questionnaire. Participants were sourced from the YouGov panel in two phases (groups) to ensure a diverse cross-section of the UK adult population.
- Phase 1 was a national sample of 2,199 UK adults
- Phase 2 follow-up was 1,097 cryptoasset users (active or former) to gain deeper insights
Key Findings
Awareness
- 93% or nearly all adults in the UK are now aware of cryptoassets (slight increase from 91% in 2022).
- Men are more likely to have heard of cryptoassets (96%) compared to women (90%).
Ownership Trends
- Cryptoasset ownership has grown to 12% of UK adults or 7 million people (up from 10% in 2022). This is a significant increase from 2020 where only 4% of UK adults owned cryptoassets.
- Ownership is higher among younger individuals (24% of those aged 18-34) and those with annual household incomes exceeding £100,000 (25%).
- Men are more likely to own crypto (19%) than women (9%).
Usage and Investment Motivations
- 36% buy crypto as part of an investment portfolio.
- 26% see it as a gamble for significant gains or losses.
- Long-term saving and day trading are also popular and increasing motivations.
See: 10 Insights from IOSCO’s Report for Crypto Investors
- More users are holding crypto: £1,001–£5,000 (17%, up from 14% in 2022) and £5,001–£10,000 (19%, up from 6% in 2022). About one-third (32%) still hold crypto valued at £100 or less.
- 67% of crypto owners have used their assets in some way. The most common use is converting cryptoassets into currency (43%).
Advertising and Its Impact
- 38% of crypto-aware individuals said they remember seeing crypto adverts primarily on social media (44%).
- 18% felt curious after seeing ads but it wasn't enough to buy.
- 10% were influenced to purchase crypto.
- Crypto ad awareness is higher among younger respondents and men.
Risks and Challenges
- 9% of crypto users said they were victims of scams including fake social media endorsements and phishing.
- 90% of the scam victims said they lost money (20% reported losses of over £1,000).
- 20% of crypto users mistakenly believe they are financially protected against losses (up from 10% in 2022).
Regulation and Consumer Perceptions
- 58% of users said they were comfortable trading in an unregulated market.
- 27% of users said they would invest more if cryptoassets were regulated, and another 25% would invest if regulation included financial protection for losses.
- Only 8% of non-crypto users said they would likely invest more, if the market were regulated.
See: Report Insights: DIY Investors in Canada on the Rise
Emerging Trends
- 27% of users said they participated in staking in the past year. 9% participated in lending or borrowing cryptoassets.
- 72% of crypto purchases were funded with disposable income. Credit card payments doubled to 14%.
- 72% store crypto on the exchange where they purchased it.
AI Image
So How Do UK and Canadian Retail Investors Compare?
Comparing the above 2024 cryptoaseets research by the FCA with the Crypto Asset Survey conducted by the Ontario Securities Commission (OSC) in 2023 reveals some interesting differences between retail crypto investors in the two countries.
1. Ownership Trends
Crypto ownership is on the rise in the UK with 12% of adults now owning cryptoassets (up from 10% in 2022). This growth is fuelled by younger adults, higher-income households, and a more optimistic view of crypto’s future utility.
See: Wealth Management Insights for Fintechs and Investors
Crypto ownership in Canada declined from 13% in 2022 to 10% in 2023. Many Canadians are still cautious and concerns about risk, volatility, and lack of understanding, slowing adoption.
2. Engagement and Usage
UK investors are more active users of their cryptoassets. 67% of crypto owners in the UK report using their holdings for various purposes, such as converting to fiat currency (43%) or trading between cryptoassets (33%). This indicates a shift toward integrating crypto into financial strategies.
In Canada, engagement remains lower. A significant proportion of Canadians (30%) report never using their crypto after purchase. When used, the most common activity is converting crypto to fiat currency (25%). This suggests many Canadians view crypto as a speculative asset rather than a functional tool. Worth noting that the OSCs survey was in 2023 so perspectives could very well be changing, especially in the current bull run.
3. Risk Perception and Confidence
Crypto's risk perception in the UK is more balanced. While 58% of UK investors are comfortable trading in unregulated markets, many still express interest in clearer regulations, with 27% saying they’d invest more if the market were better regulated.
Canadians are more skeptical of crypto. 77% expressing regret over their purchases (far higher than 20% reported in the UK). Nearly half of Canadians (49%) cite risk as their main barrier to investing, and confidence in the ability to buy or sell crypto in the future is low (16% highly confident).
4. Knowledge and Awareness
Awareness of cryptoassets is much higher in the UK with 93% of adults familiar with the concept. Many UK investors also demonstrate a deeper understanding of crypto’s potential, treating it as a diversification tool within their broader financial portfolios.
See: Overcoming Barriers to Growth in Financial Regulation
In Canada, only 54% of respondents could correctly define cryptoassets, and many rely on informal sources like friends or social media for information. This knowledge gap contributes to poor decision-making and higher regret.
5. Advertising and Influence
Both countries report significant exposure to crypto advertising, primarily through social media. However, UK investors appear better equipped to evaluate such promotions. In the UK, 10% of individuals reported purchasing crypto due to advertising while Canadians, despite similar ad exposure, showed greater regret about purchases influenced by these ads.
In Summary, the characteristics between UK vs Canadian retail investors is as follows, do you agree?
As per the FCA's 2024 cryptoasset survey, UK retail crypto investors tend to be more involved and optimistic and are using crypto as part of a broader financial plan. They actively use their crypto and recognize its use beyond just making a quick profit.
See: Canada’s Proposed Mutual Fund Crypto Regulations 2024
Accordingto the 2023 OSC crypto assets survey, Canadian retail crypto investors are more cautious and focused on quick gains. They use crypto less often and are more likely to feel regret about their investments and may reflect uncertainty or confusion about how crypto fits into their financial goals.
Why Such a Difference?
Regulatory Environment
In the UK, the FCA has worked to build trust in crypto by creating clear rules and educating people about safe trading. These efforts have helped reduce confusion and fear around using crypto.
In Canada, while regulators have made strides in creating balanced regulations, over half of people don’t know about these crypto regulations, and a third mistakenly think there are no rules at all. This uncertainty makes people more skeptical and less likely to get involved in crypto.
Market Maturity
The UK’s crypto market appears more developed with many investors actively using their crypto for things like trading, converting to cash, or earning through activities like staking. These actions show that people in the UK see crypto as a tool they can use in their financial lives, not just something to buy and hold.
See: UK’s Regulatory Crypto Roadmap from Sandbox to Mainstream
In Canada, according to the survey data, many people buy crypto but don’t use it much beyond that and there are fewer options like staking or other services that are widely available. This makes crypto feel more like a speculative investment than a practical financial tool.
Cultural Attitudes Toward Risk
Canadians tend to be more risk-averse with nearly half perceiving crypto as too risky to consider. *Update* Worth considering if the way the OSCs 2023 crypto asset survey results are 'over-egged' in the way risks are presented while shying away from reporting the positives (not balanced), and as unintended (or intended) consequences go, the OSC may just be unfairly miseducating consumers causing slower adoption in Canada?
In the UK, while investors do have risk concerns they are more likely to integrate crypto into diversified portfolios, helping them to balance risk vs reward with a long term view.
How Canada Can Close the Gap
- Simple, transparent rules for crypto and communicate it widely so investors feel more confident in participating.
- Run public education campaigns to teach people about the benefits and risks of crypto. Work with industry associations, schools, financial experts, and regulators to make crypto easier to understand.
- Highlight more real life use cases of how crypto can be used for things like international payments, staking, or decentralized finance (DeFi). Help people see it as a useful tool, not just a risky gamble.
See: UK Proposes Bill to Recognize Crypto as Personal Property
- Train advisors to talk about crypto with clients. This can help investors make smarter decisions instead of relying on advice from friends or social media.
- Set clear rules for crypto ads to prevent misleading claims. Require clear explanations of risks to reduce regret after purchases.
- Encourage Canadian platforms to offer more services like staking and educational tools. A wider range of options will help attract more active and confident investors.
Conclusion
According to survey results, Canada and the UK have taken different paths in their crypto markets. While UK investors are confident and actively use crypto as part of long-term financial plans, Canadians remains cautious, speculative, and less engaged. To close this gap, Canada must focus on clear regulations, better education, and highlight crypto's practical use cases beyond speculation.
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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Wealth Management Insights for Fintechs and Investors
Report | Nov 28, 2024
Image: Global Asset and Wealth Management Survey 2024 (PwC)
3 Insights from PwC's 2024 Global Asset and Wealth Management Survey
PwC recently published a report called the 2024 Global Asset and Wealth Management Survey which was designed to evaluate perspectives on disruptive technologies in Asset and Wealth Management (AWM) industry from two key groups:
- 264 asset managers on how technologies like AI, blockchain, big data, and cloud computing are impacting efficiency, revenue, and changing customer interactions.
- 257 institutional investors on their expectations for tech powered investment strategies and how technologies are being used for risk management and portfolio optimization.
- Collectively, participants in the survey represented a wide range of organizations with over half managing assets exceeding $10 billion.
Below are 3 data-driven takeaways for fintech innovators and investors.
1. Institutional Investors Want Digital Assets But Asset Managers Aren’t Ready
According to survey responders in aggregate, there's currently a mismatch between institutional investors and asset managers when it comes to demand for tokenized assets. While 59% of institutional investors believe technologies like blockchain will reduce barriers to investment, only 18% of asset managers currently offer digital assets as part of their portfolios.
Why the Gap?
- Some Asset managers have said that they are hesitant to adopt digital assets like tokenization because of inconsistent rules and lack of clarity on compliance requirements.
- Others have said that many firms don’t have the systems in place to support advanced tools like blockchain. Less than 60% of asset managers feel their infrastructure can handle these innovations.
- Many managers are conservative about taking risks on new tech that might disrupt their existing operations.
See: Wealthtech Startup, Allocations, Surpasses $2 Billion AUA
This gap is an opportunity for fintech firms to build the infrastructure that makes digital assets accessible, compliant, and secure. Fintechs can act as the bridge between institutional demand and hesitant asset managers by blockchain platform solutions for tokenized trading or custody.
Image: Asset and Wealth Management Survey (PwC), Tokenization Gaining Popularity Across AWM Industry
2. Tokenization is Changing the Investment Landscape
Tokenization is one of the fastest growing trends in finance and is transforming the wealth management industry. It's not a pipe dream. It's here today and fundamentally changing how assets like private equity and real estate are managed and accessed. The tokenized investment market is projected to grow from $40 billion in 2023 to more than $317 billion by 2028 (annual growth rate exceeding 50%). More than 50% of institutional investors rank private equity as their preferred tokenized asset class followed by real estate and infrastructure.
What’s Driving Growth?
- Tokenization divides assets (including expensive ones) into smaller and more affordable digital units so more people can invest in them.
- Private equity investments that were once hard to sell (think 'securities are sold, not bought') are becoming easy to trade on digital marketplaces with ample liquidity.
See: WealthTech in Asia-Pacific: A Trillion-Dollar Opportunity
- Blockchain tech streamlines a lot of back office operations, making it easier and quicker to manage more complicated investments.
- There are still challenges ahead with only 18% of asset managers offering tokenized products.
- Investor education is still a huge barrier. Retail investors need to learn the benefits of tokenization or risk slower adoption.
Fintechs can build tools and trading systems to support asset managers and investors and help them access this growing market.
3. GenZ Investors Demand Tech First Solutions
As the next generation of investors receive the 'great wealth transfer' from boomers and older generations handing down assets, there's real pressure on wealth managers to be comfortable with and use wealth management technologies. Younger investors will inherit $68 trillion over the next decade.
Key Trends
- These investors value automation, personalization, and real-time insights.
- Many currently prefer hybrid models that combine human advice with digital tools.
- Institutional investors are preparing for the wealth transfer and investing heavily in emerging fintech, blockchain, and AI solutions that are the future of market predictions, risk monitoring, and portfolio analytics and optimization.
See: Retail Investors to Drive Growth in Private Assets Under Management Expected to Reach $18.3 Trillion by 2027
- Many asset managers are falling behind however with only 39% actively upskilling their teams on these disruptive technologies.
- Firms with traditional investment approaches that are using legacy systems will struggle to meet the speed and personalization that younger investors demand.
- Fintech innovators can own this space by offering a raft of wealthtech solutions but the challenges will be execution and adoption.
Outlook
As investment interest grows for tokenization, and the great wealth transfer continues to younger and more tech savvy investors, there will be a growing demand for fintech, blockchain, AI, and wealthtech solutions. Fintech companies have a great opportunity to lead, innovate and command the future of wealth management.
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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Be Part of a Landmark Study Shaping the Future of Fintech
Survey | Nov 26, 2024
Image: 2nd Global Fintech Research Initiative (CCAF, WEF)
Help Shape the Future of FinTech: Join the Global Research Initiative Today!
The Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School and the World Economic Forum invite you to participate in the 2nd Future of Global FinTech Research Initiative. This flagship study will provide key insights into global Fintech trends and challenges. Insights from Canadian fintech innovators are key to this research which will explore the bleeding edge trends such as:
- Artificial Intelligence in Finance: How is AI revolutionizing the industry?
- Partnerships Between Fintechs and Financial Institutions: What are the opportunities and challenges?
- Financial Inclusion: The impact of Fintech in underserved markets
- Key Performance and Growth Indicators: Industry benchmarks for success
See: CCAF and WEF Unveil 2024 Global Fintech Report at Davos
Why Participate?
- Help Shape Policy & Industry Trends: Your data will contribute to evidence-based decisions for regulators, policymakers, and stakeholders.
- Global Recognition: Your organization will be acknowledged in the report and associated materials.
- Access Exclusive Insights: Early access to findings and invitations to key events with industry leaders.
- Checkout the CCAF and WEF 2024 Global Fintech Report (unveiled at Davos)
Click the Survey Link to Start
- Survey Link: Complete the Survey Here
- Time Commitment: 20 - 30 minutes
- Deadline: *Extended until December 28, 2024 (from Nov 29)
- Confidentiality: Individual entries are strictly confidential and only aggregated data will be reported.
Take part in this unique opportunity to drive the future of Fintech and ensure Canada’s voice is strongly represented on the global stage.
For more information, reach out to the team at cambridgeFMO@jbs.cam.ac.uk.
Take the survey --> Now
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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