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
Bank of Canada Publishes Analytical Notes on DeFi
DeFi | Oct 19, 2023
Image: Bank of Canada
The Bank of Canada staff released analytical notes on Decentralized Finance (DeFi) including the innovation, its potential, and challenges.
The Rise of DeFi
- The cryptoasset industry has seen exponential growth, with the market value peaking at US$2.9 trillion in 2021.
- Initially, cryptoassets like Bitcoin were designed for decentralized payments using blockchain technology. However, the focus has now shifted to offering a broader range of financial services, known as DeFi, primarily on the Ethereum blockchain.
- DeFi operates in a multi-layered structure, with the blockchain at the base layer recording and settling transactions. On top of this, developers create various cryptoassets, including native tokens, stablecoins, and non-fungible tokens (NFTs). Ethereum also supports an application layer offering financial services like lending and asset management.
See: LQWD’s AI Tech Achieves 4500% Lightning Network Surge
- The emergence of DeFi was partly driven by the inefficiencies and high costs in traditional finance. For instance, cross-border payments in the traditional system involve multiple currencies and a limited number of correspondent banks, leading to cost and time inefficiencies. Securities settlement also demands reconciliations across various ledgers.
- DeFi can potentially revolutionize the financial system by enhancing service offerings, boosting competition, and increasing transparency. A unified ledger can minimize frictions in the traditional system and expand the range of financial services.
Image: Bank of Canada
What Makes DeFi Unique?
- DeFi provides financial services without traditional intermediaries by utilizing smart contracts on blockchains.
- Smart contracts act as custodians in the absence of trusted parties. For instance, in a collateralized loan, a borrower locks a digital asset into the contract as collateral, which is released upon repayment. If the borrower defaults, the smart contract liquidates the collateral to repay the lender.
- DeFi offers a range of services, including decentralized stablecoins, exchanges, lending protocols, and asset management platforms.
See: Decentralized Finance: Uniswap’s Legal Victory Sheds Light
- One of the standout features of DeFi is its "composability." Smart contracts, being open source, can be combined like Lego bricks to develop new products. This allows for the creation of innovative solutions, such as combining an exchange contract with a lending contract to create a smart contract for margin trading. This composability accelerates the growth of the DeFi system and enhances the interconnectedness across its applications.
Challenges Facing DeFi
- Limited Tokenization: Only tokenized assets can interact with smart contracts, and few real-world assets have been tokenized.
- Centralization concerns: While DeFi aims for decentralization, there's a noticeable concentration within the system. Most sectors within DeFi have multiple service providers, known as protocols. However, a significant portion of the value is locked into a few key protocols. Operational or financial shocks to these major protocols could have system-wide implications.
- CeFi platform risks: Though they offer financial services using cryptoassets, differ from DeFi as they are managed by people instead of smart contracts. This introduces custodian risks and reduces transparency. The recent failures of centralized platforms like Celsius and FTX underscore the risks tied to these unregulated CeFi entities.
- Price manipulation, bad actors and rug pulls: Exit scams and fraudsters
Regulatory Implications
- The Bank of Canada expressed concerns that while DeFi currently poses limited risks to financial stability, its ties to the real economy might grow. Vulnerabilities in DeFi mirror those in the traditional system, such as run risk with stablecoins and leverage associated with lending.
See: Harnessing Decentralized Finance to Combat Climate Change: A New Era of Sustainable Finance
- DeFi introduces new, blockchain-specific challenges, including potential points of failure when blockchains interact with each other or the real world, and amplification channels like flash loans that allow malicious actors to secure vast funds without credit checks or collateral requirements.
- The anonymous and borderless nature of public blockchains complicates regulatory oversight.
Conclusion
In conclusion, while DeFi holds promise for future monetary and payment systems, it also introduces new risks. Policymakers and regulators are tasked with finding a balance between promoting innovation and mitigating these risks.
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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Canada’s Declining Competitive Intensity: A 2023 Insight
Competition | Oct 18, 2023
Image: Unsplash/Maico Amorim
The Competition Bureau has released the findings of its study on competitive intensity in Canada, the first of its kind both for the Bureau and in Canada (Ahem, about time)
The Competition Bureau is an independent law enforcement agency that promotes and safeguards competition for the benefit of Canadian consumers and businesses. They emphasize that competition leads to lower prices, innovation, and economic growth.
See: Ipsos Survey: Most Canadians Say (88%) We Need More Competition
Objective of the Research and Findings
The main goal of the research was to examine the general state of competition across the Canadian economy and understand how competition in Canada has evolved from 2000 to 2020.
- The competitive intensity in Canada decreased from 2000 to 2020. This means businesses felt less need to work hard to gain an advantage over their rivals, leading to fewer benefits for both consumers and businesses.
- Concentration increased, which measures the relative size of firms in an industry, rose in the most concentrated industries. The number of highly concentrated industries also increased.
- Rank Stability: Top firms were less challenged over time, indicating that they maintained their leading positions in their respective industries.
- Fewer firms entered industries over time, suggesting that these industries became less dynamic.
- Both profits and markups for firms rose overall, with greater increases observed for firms that were already earning higher profits and markups.
Implications
- The findings emphasize the importance of vigorously protecting and promoting competition in Canada.
- They also highlight the need to modernize Canada's competition laws to address the current economic realities and implement pro-competitive public policies.
Briefing Scheduled for 11:15 a.m. EST
The Bureau officials will conduct a technical briefing for the media to discuss the methodology and findings. They will provide opening remarks and then answer questions from the media.
The briefing is scheduled for October 19, 2023, at 11:15 a.m. EST and will be held virtually via teleconference.
See: Canada’s Competition Consultation Continues (thanks Senator Colin Deacon)
Why Does This Matter?
A decline in competitive intensity can lead to several challenges:
- Stagnation in Innovation: With fewer competitors in the market, there's less incentive for businesses to innovate, leading to potential stagnation in product and service development.
- Higher Prices for Consumers: Reduced competition often results in higher prices as businesses face less pressure to offer competitive pricing.
- Barriers to Entry: A less competitive market can deter new entrants, further solidifying the position of existing dominant players.
Conclusion
Canada's competitive landscape is at a pivotal juncture. While the decline in competitive intensity over the past two decades is a concern, it also offers a chance for introspection and proactive action.
See: Canada’s Competition Problem: 7 Reasons
At NCFA Canada, we remain committed to fostering an environment where every business, especially small businesses representing the back-bone of the Canadian economy, can compete and thrive, driving Canada's economic future to new heights.
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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2023 Canadian Insurtech: What You Need To Know
Insurtech | Oct 10, 2023
The insurtech landscape in Canada is dynamically evolving, navigating through technological advancements and emerging risks, while simultaneously adapting to shifting customer expectations and regulatory landscapes.
In this exploration, we lean on the comprehensive insights provided by Luge Capital in their detailed report on the Canadian Insurtech Landscape for 2023. The report, compiles data, trends, and projections, guiding readers through multifaceted developments and innovations that are sculpting the future of insurtech in Canada.
Canadian InsurTech Market Insights
Overview
- In 2022, the Finance and Insurance industry contributed $152 billion, which is 7.4% to Canada’s Gross Domestic Product.
- It experienced a 3.65% CAGR between 2019 and 2022 and employed nearly 1 million people across Canada.
- The Canadian insurance industry wrote over $216 billion in premiums in 2021.
- Ontario (19%) and Quebec (31%) accounted for half of all insurtech startup funding within Canada.
- Ontario is home to the largest number of Canadian insurtechs (over 100).
- Many large Canadian insurers, such as Intact, Manulife, and Sun Life, are based in Ontario, making it a very large market for insurance in Canada.
- Quebec, with insurers like Desjardins, Industrial Alliance, and Beneva headquartered there, is a pivotal player in the insurtech startup activity.
- The Property & Casualty and Life & Health markets paid $150.8 billion in combined benefits and claims in 2021.
See: Here is why InsurTech is heating up as an investment category
- Over the last five years, auto insurance's direct written premiums have increased, but the rate of increase slowed down in 2020 and 2021 due to the Covid-19 pandemic. In a post-pandemic world, auto insurance rates are expected to increase by high single digits as cars have returned to the roads and replacement costs increase.
- Healthcare and Insurance - according to a study by Angus Reid Institute and the Canadian Medical Association (CMA), 1 in 5 Canadians do not have a family doctor, and a significant portion of those who do find it difficult to receive timely access to care. The shortage of family physicians varies by region, with Ontario having the lowest figure (13%) and Atlantic Canada having some of the highest shortage rates (e.g., Nova Scotia, where the figure is 26%).
- Investor Participation
- Access to capital is crucial for insurtech startups, and a growing number of venture capital (VC) firms have been investing in this vertical over the past several years. There is a deeper appreciation among the VC community regarding the complexities of the insurance industry and opportunities for innovation.
- With increasing participation from more generalist funds and continued support from firms with sector expertise, the insurtech funding market is anticipated to remain vibrant.
Incumbent and Insurtech Collaboration
- The insurtech landscape in Canada is witnessing a significant trend where traditional insurance carriers and insurtech startups are forming collaborative partnerships. Incumbents bring to the table their substantial market share and existing business, while insurtechs introduce modern technology and AI capabilities.
See: Growing Trends: Insurtech and AI
- The adoption of cloud technology is facilitating these collaborations, enabling digital transformation and fostering the development and application of technologies like AI.
- This symbiotic relationship is not only propelling technological advancements but also enhancing the capacity to innovate and meet evolving customer needs.
The Pivotal Role of Third-party Data
- Third-party data has emerged as a crucial element in streamlining consumer purchasing processes, improving underwriting efficiency, and automating claim management.
- For instance, data providers like HonestDoor allow carriers to access information about properties, such as the year of construction or the number of units, thereby enabling pre-filling of application forms and reducing the need for manual entry. This intelligent use of alternative data is not only enhancing the digital customer experience by removing friction but also contributing to increased conversion and underwriting accuracy.
Connected Technologies
- Connected technologies, such as IoT and mobile technologies, are being used to incentivize risk-reducing behavior and provide continuous support to policyholders. For example, in auto insurance, telematics programs, which have witnessed an 18%+ Y-o-Y increase in Usage-Based Insurance (UBI) quotes in January 2023, are being adopted to allow for discounted premiums.
- Similarly, in home insurance, carriers are exploring new ways to assist policyholders in better managing and monitoring their homes through connected technologies, thereby bolstering value, efficiency, and customer loyalty.
Navigating Evolving (Cyber) Risks
- The insurtech sector is actively developing expertise and solutions to help insurers understand and quantify new areas of risk, particularly in the realm of cybersecurity.
- With a 38% increase in international cyber attacks between 2021 and 2022 and Canadian net written premiums reaching $372 million in 2022, the market for cyber insurance is anticipated to witness rapid growth.
See: Costanoa: Insurtech Investment Themes and Opportunities
- Insurers are adapting their underwriting criteria and increasing premiums in response to large losses in recent years, indicating a pressing need for further evolution in underwriting cyber insurance.
Holistic, Multi-channel Distribution Strategies
- The adoption of holistic, multi-channel distribution strategies, which may encompass online platforms, agents, and a combination of both, is proving to be effective in the insurance industry. The focus is on providing true omni-channel experiences, offering customers the choice of purchasing their policy online, speaking to an agent directly, or a combination of both.
- This approach not only optimizes conversions but also ensures that the customer journey is smooth, consistent, and tailored to individual preferences.
Future Remains Bright
The insurtech landscape in Canada is at a pivotal juncture, where technological advancements, emerging risks, and shifting customer expectations are shaping the future of the industry.
See:
Ontario’s FSRA Spearheads Insurance Innovation with Direct Access Model
Decarbonizing Insurance and the Adaptation of Carriers to a New Zero Economy
Duuo by Co-operators: A New Era of Embedded Insurance for Canadian Businesses
Global Reinsurance Giant Calls for More Innovation, Capital, and an Insurance-Linked Securities (ILS) Marketplace
By embracing collaborative approaches, leveraging third-party data, adopting connected technologies, navigating through emerging risks, and implementing holistic distribution strategies, the insurtech sector is not only addressing current challenges but also paving the way for a future where innovation and customer-centricity are at the forefront.
Download the full 68 page PDF report --> here
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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Insights into CFOs Strategic Recalibration
Survey Insights | Oct 4, 2023
Image: Unsplash/Ch pski
In the face of economic and technological shifts, CFOs and finance leaders are recalibrating their strategies, balancing the imperative of cost control with the potential of technological advancements.
Insights from two pivotal surveys, one conducted by U.S. Bank and the other by Stripe, provide a comprehensive view of the current and future landscape of finance departments globally. Below are some key insights from the amalgamated findings:
1. Prioritization of Cost Control
- The U.S. Bank survey indicates a significant shift towards cost control within finance departments, with 38% of CFOs prioritizing internal finance-function cost control, even surpassing the emphasis on maintaining costs across the entire business.
- Driving revenue growth was the fifth-highest priority (23%), up slightly from 2022 but down from the second-highest priority (35%) in 2021.
- 56% of finance leaders currently struggle to balance cost cutting and building resiliency with investment in future growth, up from 46% in 2021.
- This insight points towards a defensive and conservative approach adopted by finance leaders, potentially driven by prevailing economic conditions, such as the end of the low-cost capital era and persistent inflation in some sectors.
2. Tech Integration and Automation
- The Stripe survey reveals a strong inclination among finance leaders towards technological advancements, with nearly 40% listing "digital technologies to automate financial operations" as one of the top initiatives they are most excited about in 2023.
- Despite the current manual handling of a significant portion of back-office operations, there is a palpable excitement about employing technologies and innovations to streamline processes and enhance efficiency, albeit with a balanced approach that does not completely eliminate human intervention.
3. Increased Appetite for Digital Payments
- 68% of respondents intend to use instant payments (i.e. FedNow Service) two years from now. The survey found that 42% currently use real-time payments, up from 38% in 2022.
4. Data Consolidation and Management Challenges
- The Stripe survey highlights that 63% of finance teams use more than 10 different systems to access crucial business metrics, and 55% of finance leaders aim to consolidate software programs within the next one to two years, primarily to centralize data.
- This insight underscores the challenges faced by finance departments in managing data across multiple systems and the strategic importance of data centralization in facilitating faster, more accurate decision-making and driving business growth.
Walking A Tight Rope
These insights collectively underscore the evolving landscape of financial management, where CFOs and finance leaders are navigating through the complexities of economic challenges while also aspiring to harness the potential of technological advancements to streamline operations, enhance efficiency, and facilitate strategic, data-driven decision-making.
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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BoC: Redefining Financial Inclusion for CBDCs
Report | Oct 4, 2023
Bank of Canada's Staff Release New Research on Implications for a Central Bank Digital Currency
- Today, the Bank of Canada's staff released their latest report, "Redefining Financial Inclusion for a Digital Age: Implications for a Central Bank Digital Currency," which delves into the intricacies of digitalization and its impact on financial and digital inclusion, particularly in the realm of payments.
- The Bank of Canada has been exploring the concept of CBDCs and considering various aspects related to its implementation, such as technology options, unmet payment needs, security, and privacy.
- As over 130 central banks around the world are actively researching, developing, or implementing their own CDBCs, and the IMF is implementing a cross-border CBDC global platform.
Report Insights
1. Digitalization and Financial Inclusion
- Canada experiencing a notable shift in consumer behavior and technology use, especially in how Canadians manage money and make payments.
- The decline in the use of cash in favor of cards and digital payments has been significant, prompting broader considerations about digital money and its social implications.
- Digitalization has permeated society, offering new opportunities but also creating and exacerbating existing inequities, especially in payments.
See: Bank of Canada Seeks Your Input on Transaction Reports
- The report applies the social model of disability to the Canadian payments landscape to identify opportunities to remove barriers that marginalize or hinder people. The authors aim to build awareness of the inequities and challenges present in the current payments system and motivate fintech providers to offer more inclusive products and services.
2. Challenges in the Current System
- The authors identify barriers faced by rural populations, Indigenous communities, Canadians with low incomes, and persons with disabilities in using financial products.
- There is a noted deficiency in the current research and payment offerings for those with cognitive accessibility challenges.
- Financial inclusion is often measured by access to bank accounts, with 98% of Canadian adults having a bank account and a debit card.
- However, the remaining 2% who are unbanked, and the 13% without a credit card, may face limited options for online purchases and are at a higher risk of being excluded from the digital economy.
See: McKinsey Global Payments On Cusp of ‘Decoupled Era’
- The decline of cash as a payment method, from approximately 53% in 2009 to below 21% in 2021, also poses challenges for those who rely on banknotes.
3. Trust and Literacy in Financial Inclusion
- Trust and literacy emerge as recurring themes across financial inclusion research. Some people with low incomes have shown a preference for paper bills as assurance when transacting with banks and billing firms.
- Discrimination experiences, especially in financial institutions and banks, have been reported by Black and Indigenous respondents, which may influence their engagement with traditional financial services.
What Can Canada Learn About CBDCs in Other Jurisdictions?
GDPR and Data Privacy
- The General Data Protection Regulation (GDPR) has been implemented by the European Union and is considered a gold standard in regulating how companies use and secure consumer data.
- GDPR-like data privacy laws have been adopted by many countries around the world since 2018, affecting international enterprises with customers or employees in Europe as well as those serving as data processors in Europe or for European companies.
- The implementation of GDPR has faced challenges such as insufficient funds, complex procedural labyrinths, and infighting on implementation among national enforcers.
See: Can Privacy and Financial Regulation Co-exist?
- The GDPR has led to many companies considering reducing their presence in Europe significantly, or even halt services in entire jurisdictions.
Best Practices in CBDCs and Privacy
- Ensuring that users have control over their data and are aware of how it is being used is crucial. This involves clear communication about data usage policies and providing options for data control to the users.
- Some CBDC models propose different levels of anonymity, such as "loose" anonymity, where the transaction data is visible to the central bank or "tight" anonymity, where the data is not visible to the bank.
- Implementing data minimization practices that limit the collection of user data to what is strictly necessary for the transaction or service.
- Employing robust security measures to protect user data from unauthorized access and breaches.
- Establishing a clear legal framework that outlines the rights of the users and the obligations of the CBDC providers.
Country Model Examples
- China's Digital Currency Electronic Payment (DCEP) model has been in pilot testing in various cities. The model is designed to replace cash in circulation and is not fully anonymous. The People’s Bank of China will be able to trace the DCEP to fight against money laundering, terrorist financing, and tax evasion. See also: Offline payments via super SIM cards
- Sweden's e-Krona model by Sweden's central bank, Riksbank, is exploring to have an electronic currency that could ensure that the general public will retain access to a state-guaranteed means of payment in the future.
- Bahamas' Sand Dollar is a digital version of the Bahamian dollar, launched by the Central Bank of The Bahamas. It provides for digital identity and maintains transaction privacy but is also compliant with AML/CFT regulations.
The Consumer's Voice is Critical
The insights derived from the report could serve as a foundational framework for policymakers, financial technology providers, and central banks in designing and implementing digital payment products and services that are not only technologically advanced but also universally accessible and equitable. Beyond fintech innovators, traditional financial institutions, and policy-makers, the general public and consumer must be consulted and brought to the forefront of the discussion.
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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McKinsey Global Payments On Cusp of ‘Decoupled Era’
Oct 3, 2023
Iage: McKinsey 2023 Global Payments Report, Exhibit 1
Navigating the Surge and Strategy of Global Payments
The McKinsey 2023 Global Payments Report unveils a realm where regions experience unprecedented revenue hikes, digital transactions become paramount, and new payment business strategies are essential for navigating through the intricate financial ecosystem. Explore the pivotal insights and trends shaping the future of global payments, unearthing opportunities, challenges, and the strategic pathways ahead for financial entities.
Widespread Double Digit Growth
The global payments industry has witnessed robust growth, with revenues increasing by double digits for the second consecutive year. This growth trajectory reflects a remarkable resilience despite the numerous challenges and adversities faced by the financial ecosystem globally. Most regions experienced significant revenue growth, with North America, Latin America, and Europe, the Middle East, and Africa (EMEA) recording double-digit increases - the highest in the past decade.
See: [Brookings Event, Oct 6, 2023]: Payments in America for a Digital Century
In contrast, the Asia–Pacific region, which traditionally has been a major contributor with 47% of global payments revenues, showed a subdued trend. While the region has been a key growth driver in recent years, 2022 saw only a 4% increase in its revenues. This slowdown can be attributed to a 3% drop in payment revenues in China. However, when we exclude China's figures, the Asia–Pacific region displayed a robust growth of 25%, surpassing its own growth rate from the previous year.
Select Report Insights
India has seen a substantial shift, moving into the top five countries for payments revenues. This movement is propelled by the sustained growth experienced in the country, which is significantly fueled by the displacement of cash transactions.
For the first time in several years, interest-based revenue has made a significant contribution, accounting for nearly half of the revenue growth in the payments sector. This indicates a shift in the revenue generation dynamics within the industry.
In 2022, cash usage globally declined by nearly four percentage points. Over the past five years, the growth rate for electronic transactions has been nearly triple the overall growth in payments revenue, signaling a shift towards digital and electronic payment modalities.
See: Key Insights and Trends from Citi’s Payments Survey
The payments sector has undergone significant evolution, moving through distinct eras and currently transitioning from the Account Era to what the team at McKinsey calls a "Decoupled Era." This transition implies a shift towards more integrated and user-centric payment solutions, decoupling traditional account mechanisms from payment functionalities.
Building New Payment Businesses 'Carpe Diem'
$3 Trillion payment revenue is estimated by 2027. Electronic transactions have been growing at a rate nearly triple the overall growth in payment revenue over the past five years, and as such building new payment businesses is a crucial strategy for banks, financial institutions, and fintechs.
- The era of embedded finance is upon us, opening avenues for financial institutions to integrate services within non-financial platforms, enhancing user experiences and facilitating seamless transactions. By embedding financial services into e-commerce, social media, and other digital ecosystems, new revenue streams are created, fostering a cohesive relationship between various sectors.
- In the realm of cross-border payments, technology like blockchain and stablecoins are pivotal in ensuring transactions are faster, more transparent, and cost-effective. Financial institutions can leverage these technologies to facilitate global trade and enhance international financial connectivity, thereby reinforcing their role in the global financial infrastructure.
- Alternative supply chain finance solutions provide an avenue for financial institutions to offer liquidity and stability to suppliers and buyers, thereby contributing to the overall robustness and sustainability of the global trade ecosystem. This ensures enhanced operational efficiency and facilitates a stable financial flow within the global supply chain.
See: FIS Dives Deeper into Embedded Finance with Bond Acquisition
- With interest-based revenue contributing nearly half of revenue growth for the first time in several years, reimagining deposit strategies becomes imperative. Financial institutions must develop and promote products that cater to specific needs and preferences of various customer segments, ensuring financial inclusivity and health, such as:
- Liquidity Insight for Clients
- Centralized Deposit Management Hub
- Targeted Deposit Growth Sales Strategy
- Value Offerings for Liquidity-Rich Clients
- Advanced Analytics and Strategic Pricing Models
Payment Modernization and Operational Efficiencies
Embracing technological advancements, streamlining operations, and enhancing digital capabilities are pivotal in modernizing payment infrastructures. By focusing on improving productivity and aligning with contemporary payment modalities, financial entities ensure they are equipped to navigate the complexities of the modern financial landscape.
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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Navigating BC’s Innovation Landscape with Capital Compass BC
Capital | Sep 29, 2023
Image: Capital Compass BC
This week hails the launch of Capital Compass BC, a dynamic and collaborative platform by Innovate BC, InBC Investment Corp., PacifiCan, and New Ventures BC, designed to bolster and connect BC's thriving entrepreneurial ecosystem.
British Columbia (B.C.) is a hub of innovation, with entrepreneurs and companies propelling it as a leading innovation center in North America. Capital Compass BC is not just a boon for businesses but also for investors, innovators, and ecosystem enablers. It's publicly accessible, free-to-use, and allows individuals to submit relevant information, making it searchable within the platform.
Key Features of Capital Compass BC:
- Comprehensive Database: The platform provides detailed insights into startups, scaleups, investors, entrepreneurial resources, and the flow of investment capital within BC. There are currently 538 fintech startups and scale-ups based in BC listed on the platform.
- Advanced Filtering: Users can explore the vast database using filters like sector, company stage, funding round, and other pivotal characteristics. This facilitates the identification of trends, opportunities, and gaps in the regional innovation ecosystem.
- Support for Companies: Beyond just being a data repository, Capital Compass BC aids companies in navigating funding sources and amplifying their visibility in the market.
- Investor's Paradise: Investors and funding providers can leverage the platform to pinpoint companies in BC that resonate with their investment strategies.
See: H1 2023 Fintech Investment Landscape: Top 10 Global Markets
Brenda Bailey, the Minister of Jobs, Economic Development, and Innovation, expressed her enthusiasm about the platform, emphasizing its role as a one-stop site for accessing funding-related resources in BC. She believes that this publicly accessible platform, developed collaboratively by multiple stakeholders, will be instrumental in connecting BC businesses and investors, paving the way for more developmental opportunities and growth.
For those eager to delve deeper into what Capital Compass BC has to offer, the platform is accessible at www.capitalcompass.ca.
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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