The biggest threat to liberal democracy isn't what you think it is
So what is financial exclusion in the era of Open Finance?
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Digital, NEO, Open Banking, Open Finance
Alex Vronces: Follow the money, but also look in the mirror
Mox | Alex Vronces | Feb 16, 2022
The biggest threat to liberal democracy isn't what you think it is
The biggest threat to liberal democracy is not what most people are saying it is. It’s not the “freedom convoy” that is calling for an end to mobility restrictions and vaccine mandates. Yes, many of them are wacky. If you spent as much time as I did scrolling through your Twitter feeds, you’d have found a video of a naked man army-crawling across a cement road, in a crowd of protesters cheering him on, with party music blaring to the discontent of Ottawa’s downtown residents. The video has since been taken down. It’s wacky, but it’s not democracy-destroying. And neither is the chattering class of cottage-dwelling MacBook-wielders, who are calling for authorities to suppress what the New York Times’ editorial board called legitimate democratic expression. These people need to take a breath and count to ten more than they need a refresher in political philosophy.
See: PM Trudeau Invokes Emergencies Act Catching Protester Firms including Crypto in Crossfire
The biggest threat to liberal democracy is the poor state of our public institutions. Law enforcement and our governments should have drawn the line weeks ago. Honking your horns on Parliament Hill in the late afternoon, and occupying a small strip of Wellington Street? Go ahead. That’s a liberal democratic vibe. Breaking decibel metres in the middle of the night, and blocking the Canada-United States border? Truck around and find out. But our public institutions were so busy pointing the finger at each other that they didn’t have any hands left to draw the line, let alone hold it.
That we let things get bad enough to invoke the Emergencies Act is as clear a sign as ever that our public institutions aren’t up to snuff. Along with its emergency powers, the federal government announced a slew of measures to follow the money: authorizing banks to cut suspected funders of civil disobedience from their bank accounts, and forcing crowdfunding platforms and payment processors to register with our financial intelligence and crime unit, FINTRAC. The private sector’s role in all of this—the good and the bad—has been under the looking glass for a while now. Recently, a parliamentary committee on public safety and national security agreed to study the role of the private sector in funding extremism. The usual suspects were named: social media, crowdfunding platforms, payment processors.
Calls to follow the money are fine. But where are the other calls? We should ask whether private institutions had a hand in this, but we should also ask why public institutions have a record of being outperformed by their private counterparts. GoFundMe, the original crowdfunding platform for the “freedom convoy,” froze almost $5 million in donations on January 25 because its terms and conditions were being violated. It wasn’t until February 10 that the Ontario government froze the funds being raised on GiveSendGo, an alternative crowdfunding platform the convoy’s enablers started using. Now the convoy has turned to bitcoin. It’s a game of whack-a-mole the government can’t keep up with.
See: NCFA Advocacy | Industry Research & Reports
Our public institutions lack capacity because we don’t invest in them to meet future logistical challenges. For example, the extraordinary power the government has exercised to follow the money didn’t have to be extraordinary. It probably could have been a business-as-usual power if the federal government had passed the Retail Payment Activities Act when it was supposed to. Passed in 2021 but not yet in effect, the RPAA will give the federal government the power to shut down any payment service provider, whether that’s for “prescribed” reasons or for reasons related to national security. This potentially broad power wouldn’t be invoked lightly, but then again, neither should the Emergencies Act.
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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, 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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Vancouver’s FINCAD Acquired by Zafin and will operate as the Capital Markets Group
Techouver | | Jan 24, 2022
Vancouver’s FINCAD has been acquired by Toronto-headquartered Zafin for an undisclosed amount.
Founded in 1990 by Bob Park, FINCAD is a leader in pricing and risk analytics of financial derivatives and fixed income products.
Zafin is the world’s leading SaaS cloud-native product and pricing platform for banks and credit unions.
See: How Covid has kickstarted Canadian fintech
By acquiring FINCAD, Zafin expands its product portfolio and analytics capabilities to become one of Canada’s largest B2B fintech companies with significant global presence including more than 450 institutional clients and more than 500 employees spread out across 13 global offices.
FINCAD will operate as the Capital Markets Group of Zafin under the established FINCAD brand.
“As we look to further accelerate our global growth and enhance our end-to-end pricing and analytics offering to the marketplace, this move into the Capital Markets space is a key step. FINCAD naturally stood out to us given their impressive track record of being the leading provider of derivative analytics and pricing with a strong team that delivers for some of the world’s most trusted institutions,” said Al Karim Somji, Founder and Group CEO of Zafin.
FINCAD secured a USD $12 million growth financing round from Vancouver’s Vistara Growth in 2019.
See: McKinsey Global Banking: Revenue pools moving to customer-ownership with embedded digital financial services
Also part of today’s announcement, Zafin announced it has launched a new Banking Group focused on delivering radical innovation of its award-winning product and pricing platform for banks and credit unions.
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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, 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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So what is financial exclusion in the era of Open Finance?
Fintech Galaxy | Lisa Gutu | Jan 19, 2022
So what is financial exclusion in the era of Open Finance?
Despite the impact of the phenomenon, little is known about which categories are excluded from the financial market. These are usually classified as follows:
Unbanked – individuals or organisations who don’t have any access to a bank’s or financial institution’s services.
Underbanked – individuals or organisations who have limited access to financial services and still rely on using cash in most operations, thus depriving themselves of important banking services, like using credit cards or getting loans.
See: Minister Freeland releases final report with 34 recommendations on Open Banking from the Advisory committee
Underserved – this is a term used to describe the two aforementioned categories: the unbanked and the underbanked. Underserved communities are most often from:
- People with low incomes from low and middle-income countries;
- People with low incomes or who are marginalised in high-income countries;
Women and expats in several parts of the world; - Micro businesses – although MSMEs constitute a high percentage of the total number of businesses in the world, financial exclusion is the main constraint keeping them from developing.
Financial exclusion doesn’t affect only the developing countries. It involves the difficulty in accessing and using all those financial services necessary for the complete development of the daily life of individuals and to their full involvement in society.
Unbanked and underbanked individuals are located across the world in both wealthy countries and undeveloped countries. According to data from the World Bank, as of 2017 — the most recent year for which figures are available — 1.7 billion people were unbanked globally.
See: Banking barriers: How the Canadian financial sector excludes Black entrepreneurs, stifling innovation
Younger people are also more likely not to have bank accounts or to be underserved by banks than older people. Around 30% of unbanked people were between the ages of 15 and 24 in 2017.
Underserved communities are most often from:
- People with low incomes from low and middle-income countries;
- People with low incomes or who are marginalised in high-income countries;
Women and expats in several parts of the world; - Micro businesses – although MSMEs constitute a high percentage of the total number of businesses in the world, financial exclusion is the main constraint keeping them from developing.
Open banking is meant to generate new benefits and opportunities for economies and societies by:
Providing access to responsible credit. Properly designed open banking products, through the use of alternative financial data, can expand access to financial insights that help increase consumers’ chances to get approved for loans and accurately assess what they can afford. Such data can include mobile bill payments, rent payments, utility bill payments, and so on.
See: Open Finance data adoption varies by country (but one thing is certain)
Enabling participation in the global economy. Open banking is spurring economic growth and driving financial inclusion by helping millions upgrade from cash-based transactions to digital financial transactions in a secure environment.
Supporting MSEs. Micro and small enterprises get access to affordable financial tools that address their needs including accounting and cash management. These processes become automated under open banking and easier to achieve from a technical point of view.
Supporting the contingent workforces. Freelancers have been underbanked for a long time, and with all the open banking-based opportunities, this is changing. They get access to affordable financial products and benefit from nano-loans and micro-insurance, which is exactly what they’ve lacked up until now.
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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, 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 Banking: Revenue pools moving to customer-ownership with embedded digital financial services
McKinsey & Company | Dec 1, 2021
The Great Divergence: 2021 Global Banking Review excerpt:
Future-proof business models
In a world that continually surprises, we hesitate to talk about a “future-proof” business. Many companies that thought they were ready for anything in 2019 are frantically reinventing themselves—or disappearing. Nonetheless, the concept is useful: What does it take to build a bank that is impervious to disruption as we understand it today?
Payments can serve as an example. Fiserv, Global Payments, Klarna, and Square are very different and operate in different parts of the payments value chain, but they all have thrived in a business in which most banks have been struggling to create value. Their business model is capital-light, focused on sales growth in the most relevant and attractive revenue pools and with a strong investment in technology and scalable and integrated systems. Banks, on the other end, have focused on the debtor-side interfaces where value creation has been limited and revenue sources are under pressure—for example, current accounts and cross-border payments.
See: 65% of Global banking executives see branch-based models dead in 5 years
Overall, specialized financial-services providers—in payments, consumer finance, or wealth management—are generating higher ROEs and valuation multiples than most global universal banks. Some fintechs are going from a rough sketch to billion-dollar valuation in a few years. And there are indeed some banks among the institutions diverging from the pack. What do these top performers have that others can build, acquire, or access through partnerships to deliver a higher shareholder value? Our analysis points to three common elements that make a future-proof business model:
1. Customer ownership with embedded digital financial services
Companies like Amazon, Apple, Google, Netflix, and Spotify have taken existing services and transformed them into digital experiences that are now embedded in customers’ daily lives. Leading fintechs, specialists, and banks are replicating this model in financial services, turning products into features to meet customer needs and keep them engaged. The existing, underlying elements are still there—the checking account, the personal loan, or the POS terminal—but they are less visible, a seamless part of a digital experience that goes beyond banking.
Successful financial-services providers take three steps to position their business for this shift. First, they attract customers by solving very specific yet relevant needs. Examples include Alipay and Klarna, which make shopping and cash management easier and convenient for small businesses through quick and simple onboarding, transparent pricing, new POS terminal features, and buy-now-pay-later checkout solutions.
See: Canadien blooming. The fertile “Valley” for finance innovation FLOW: OB, CAN Trends, Beyond OB: BaaS + Embedded Finance, tunl
Second, top performers bring customers into an ecosystem, connecting them with other services and building a dynamic and distinctive customer experience. For example, Square’s core offering is a payments service, but from there it developed comprehensive value-added services for sectors such as restaurants.
The third step is providing customers with personalized analytical insights. This increases customer engagement and, eventually, advocacy through word of mouth and social media. And in a virtuous cycle, it tells the bank or fintech more about customer behaviors and needs. The Canadian bank RBC’s AI-powered financial assistant app NOMI provides users with cash flow forecasts that take into account loan installments and subscription services, and applies deep learning techniques to customer transaction behaviors.
2. Efficient economic model that fosters growth beyond the balance sheet
Financial institutions with higher valuations tend to have a 40 to 60 percent lower cost to serve than the average universal bank and four times greater revenue growth. Higher revenues and low costs lead to more value, of course, but a deeper analysis of these leading financial institutions also shows that 55 to 70 percent of their revenues come from origination and distribution, compared with 40 to 50 percent for an average universal bank, and they leverage digital channels to interact with customers two to three times as frequently as the average bank (Exhibit 6).
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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, 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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New Mastercard Study: Majority of Canadian Consumers Embrace Open Banking
Mastercard | Dec 15, 2021
Report finds more than 77 per cent of consumers in Canada – and 86 per cent of Gen Z – are already connecting their bank accounts to technology apps
TORONTO, Dec. 15, 2021 /CNW/ - Mastercard released a new report, The Rise of Open Banking, demonstrating the mainstream adoption of technology to power smarter, more meaningful digital experiences. Open banking puts consumers at the centre of where and how their data is used to more effectively provide the services they want and need. Fintech companies and banks use this consumer-permissioned data to provide easier and more inclusive access to credit, personal financial management, digital wallets and payments services.
See: Tink Survey Report 2021: Open banking spending, investments and use cases
Open banking is already embedded in several areas of our daily lives, including personal financial management tools, linking of financial accounts and account opening. According to the report, over nine in 10 consumers (95 per cent) in Canada use online and mobile financial applications to manage money, with paying bills (85 per cent) and banking (84 per cent) as the most popular use cases.
Willingness to Connect Financial Accounts
Critical to driving many, if not all, of these transactions is the ability for consumers to securely link their bank or payment accounts and authorize their financial data to be used in online financial applications. The report found that:
- 65 per cent of consumers in Canada have, or would, consider connecting their bank accounts to financial apps and services to automate financial tasks
- 69 per cent of consumers in Canadian have, or would, consider connecting their bank accounts to financial apps and services to easily send money to someone
See: Privacy Implications of an Open Banking System in Canada
Trust in Fintech
Consumers are already connecting their data via multiple platforms to manage finances, and thus make their data work harder for them. Of those surveyed:
- 55 per cent of consumers in Canada feel very confident using technology to manage money
- Convenience is a top driver for using financial technology, with 62 per cent of consumers in Canada saying fintech saves them time and is less work
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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, 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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RBC Research: Preparing for Hyperdrive – Themes that will define our new future
RBC Wealth Management Research | Dec 7, 2021
Get ready for accelerated disruption. As we think forward to the future, progress will be faster than it has ever been and it will not be linear. Just as we did in our Landmark 2018 Imagine Report, in this thought leadership study we have taken a global, cross-sector approach to determining the themes that will define our new future.
Challenging our global research teams in their respective areas of expertise and coming together to share ideas in recent months, we identified five key themes investors and executives alike across all industries must collectively understand to prepare for the years ahead.
Themes that will define our new future
1. The Quest for Immortality – Biopharma breakthroughs, life science real estate, 5G, autos, consumer wellness, space exploration and more come together to increase life expectancy rates globally.
2. The Individual Revolution – Data monetization, blockchain, gene editing and an evolving gig economy put the individual front and center like never before.
3. Artificial Intelligence Activated – This is no longer a drill. The path is set for the latter stages of AI to be integrated into our global economy. Don’t be left behind.
See: WEF Insight Report: Digital Assets, Distributed Ledger Technology, and the Future of Capital Markets
4. Hybrid Living – Our physical and digital worlds are rapidly combining, suddenly becoming indistinguishable and the implications are radical.
5. The Great Balancing Act – An accelerating rate of change on multiple fronts has the potential to create unprecedented instability. Resources are constrained and as we make tremendous forward progress on global sustainability, we must always keep in mind the other side of the coin. Innovation will thrive and new tensions will arrive.
In conclusion, the five themes highlighted in this thought leadership study provide a glimpse into the future and the opportunities and challenges that lie ahead. Life science, in particular, plays a significant role in the first theme, "The Quest for Immortality," as breakthroughs in biopharma and gene editing are increasing life expectancy rates globally. As we prepare for accelerated disruption, it is essential to collectively understand these themes and continue to learn more about the implications and potential opportunities they bring.
By staying ahead of the curve and embracing change, we can pave the way for a brighter future. This requires us to be open-minded and flexible in our approach to new technologies and ways of working, as well as actively seeking out knowledge and insights from a variety of sources. Only then can we truly harness the power of disruption to drive innovation and progress.
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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, 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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Wealthsimple exits UK market (for now) – Too many investment apps in the UK?
Betakit | | Dec 6, 2021
As Wealthsimple exits another international market, the Canadian FinTech giant has completed the transition begun earlier this year to focus solely on Canada.
Wealthsimple announced today that the company has sold its UK book of business to European digital wealth manager Moneyfarm (terms of the deal were not disclosed). Wealthsimple UK will transfer its existing 16,000 customers to Moneyfarm by end of January next year, and no longer provide advisory services.
The sale is the last step in a transition out of international markets begun earlier this year. Wealthsimple sold its US book of business to Betterment in March, citing a desire to focus more directly on the Canadian market.
“I think what you’ve seen from us, as we’ve divested from the advisors business a year ago, as we left the US market to focus on Canada, it’s about focus,” Katchen said, referencing Wealthsimple’s sale of its advisory service in 2020.
See: Wealthsimple adds crypto portfolios to group-retirement plans
In contrast to its market scale-back, Wealthsimple has been aggressive in expanding its product offerings, adding savings and spending, cryptocurrency asset purchasing and spending, as well as peer-to-peer payments. In June, Katchen also told BetaKit that the company is exploring credit and insurance offerings.
Still, at that time, the CEO noted “our ambitions remain beyond Canada, and certainly we’re excited about other markets in time.”
The phrasing closely mirrors that of Murphree, which indicates Wealthsimple might not remain Canada-only forever.
Before new markets might come an IPO. In 2019, Katchen told BetaKit that Wealthsimple had set a target of $20 billion in assets under administration (AUA) before considering an initial public offering. According to the company, Wealthsimple currently sits at $15 billion in AUA, with over 2.5 million clients and tax filers across its Invest, Trade, Crypto, Tax, and Cash services; that’s three-quarters of the way to the finish line and a significant number of customers.
At the start of the decade, the standard FinTech approach to growth was to own one segment of the local financial value chain and scale to own it globally. Such global ambitions have mostly been dashed by a highly-regulated space where regulations differ per market, limiting the traditional scaling benefits of technology businesses (see Revolut’s on and off and perhaps on again-relationship with Canada).
See: Rise of the super app
Following this year’s Money 20/20 conference in Las Vegas, the aspiration for FinTechs now seems to be becoming financial services ‘super apps’, adopting the model of Chinese giants like Alipay and WeChat. Both Revolut and PayPal have warmed up to the branding, and with some analysts skeptical that local wedge-product incumbents have what it take to compete globally with the likes of Apple and Amazon, the proposition of using regulatory hurdles as a walled garden to becoming a national FinTech super app seems quite appealing.
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The Armchair Trader | | Dec 6, 2021
Low cost investment app Wealthsimple announces exit from UK market
Investment app Wealthsimple has announced it is closing down its UK operations and transferring its existing clients over to rival service Moneyfarm. The Canadian-based investment service said it would instead be refocusing efforts on its Canadian clients.
Wealthsimple had been active in the UK offering low cost investment services for almost five years. The company said it had contacted all its UK customers today about the transfer to Moneyfarm. Eligible assets will be transferred over in cash and will be reinvested in Moneyfarm portfolios based on the client’s investment goals.
Too many investment apps in the UK?
The decision by Wealthsimple to pack its bags is being seen by some experts as evidence that the low cost money app game is getting a little overcrowded. Further withdrawals and collapses are anticipated next year, including some M&A activity. There just seem to be too many so-called robo-advisers operating in the UK market, and margins are very thin indeed.
See: How Do Canadian Discount Brokers Compare With Robinhood?
“The difference between setting up an app-based investment service and full financial advice couldn’t be larger and the general public is clearly waking up to this,” said Adam Walkom, co-founder of IFA Permanent Wealth Partners in London. “Finance can be scary and intimidating and people can and will make mistakes. That’s unfortunate but there is no substitute for a real person to talk through your situation and help you. Yes, of course it costs more, but what price do you put on peace of mind and long-term wealth building?”
The apps have succeeded in assisting many first time investors into the market in a cost-effective way, including helping them to benefit from the massive rally in stocks last year. But now it does look as if the UK market has become too crowded. Some pundits are wondering this morning whether Wealthsimple was getting distracted by the Canadian market.
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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, 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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