Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Enterprise, Scaleup
Revolut Pushes into Commercial Real Estate Lending
Revolut | Jan 31, 2025
Image: Freepik/rawpixel.com
Competition Heats Up As Revolut Launches Commercial Real Estate Lending Unit
As reported by PYMTS, Revolut has launched a new business unit focused on Commercial real estate lending Revolut, one of the largest fintechs globally, is moving into commercial real estate lending, a sector that is traditionally dominated by large banks and institutional investors. Reading between the lines, this move signals that large fintechs are on the move seeking new revenue opportunities, and entering one of the most capital intensive areas of finance. What are the implications?
See: Real World Implementation of Real Estate Tokenization
The entry of a large fintech player like Revolut could disrupt commercial real estate with a digital-first approach that integrates the latest artificial intelligence capabilities while fast tracking approvals and automating real-time underwriting. If successful, it will put pressure on incumbent lending institutions and give borrowers more choice and lower barriers. Revolut has appointed Duncan Batty from M&G Investments to lead the initiative.
Revolut has been aggressively expanding its product offerings recently and is also launching a private banking division for high net work individuals, along with applying for a banking license to become the first global digital bank in New Zealand.
Why This Affects the Fintech Industry
Until now most large fintech companies have largely focused on payments, consumer lending and wealth management services. By entering commercial real estate lending it's a sign of maturing fintechs since that type of lending requires higher capital risks, more robust risk management, and with that comes stringent regulatory oversight. In the past, Revolut experienced regulatory growing pains taking several years to acquire a UK banking license, investigated by the FCA in 2023 for allowing withdrawls from suspicious accounts, and was urged by the European Central Bank to improve financial crime and governance controls.
See: Revolut’s Crowdfunding Success from Start-up to $45 Billion
If Revolut can improve the process and offer more competitive rates, it will force traditional lenders to rethink their business models as fintech competition could ramp up quickly.
Regulators may be more encouraged to allow Revolut to operate as a digital first global bank at scale. All told, if Revolut can make things work then other fintechs may likely follow by entering more capital intensive markets.
What About Canada?
Revolut entered Canada in 2019 with a beta version of its digital banking services but announced its exit in 2021 due to regulatory challenges that didn't allow them to offer the full range of services they had planned. While Revolut kept the idea open to the possibility of returning to Canada, at the time of writing, they have not re-entered nor has there been any progress of a (digital) Canadian banking license application.
Despite its exit, Revolut left open the possibility of returning to Canada in the future. As of today, it has not reapplied for a banking license or re-entered the market, leaving Canadian fintechs to fill the gap in digital banking and alternative financial services.
See: Wealth Management Insights for Fintechs and Investors
Having said that, Canada's fintech ecosystem does have various participants making strides in fintech real estate lending. Companies like Lendwire, Nesto, and Pine are already offering digital lending solutions.
Closing Thought
Canada’s regulatory and ologopolistic banking environment are key barriers to faster fintech growth in this sector which can slow innovation. However it begs the question, if Revolut is able to develop a successful real estate lending model abroad, will Canadian fintechs push for regulatory changes that allow them to compete more effectively at home before global fintechs consider/re-consider entering the market?
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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May 14-16: Join NCFA at Consensus Toronto 2025!
Conference | Jan 31, 2025
Join Us at Consensus Toronto 2025 – The Premier Blockchain, AI & Web3 Event!
We’re excited to announce that NCFA is a Community Partner for Consensus Toronto 2025, the premier global conference for blockchain, AI, Web3, and digital assets hosted by Coindesk. The flagship event is happening May 14-16, 2025, in Toronto Canada, and is anticipating 15,000+ industry leaders, investors, developers, policymakers, and visionaries to explore the most pressing topics and innovations driving the future of technology and finance.
See: SEC Launches Crypto 2.0 Task Force Led by ‘Crypto Mom’
With world class speakers, innovative showcases, hackathon and awesome networking, Consensus Toronto promises to be an unparalleled opportunity for companies and innovators looking to get ahead in the world of crypto and digital finance. Attendees will gain exclusive insights into Bitcoin, Ethereum, DeFi, NFTs, DAOs, metaverse advancements, AI integration, regulatory developments, and investment strategies. The conference also features workshops, side events, and investor meetups, making it a great platform for forging connections and discovering new opportunities in the blockchain and emerging tech space. .
Why Attend?
✅ Connect with 15,000+ industry leaders, developers, and visionaries
✅ Explore cutting-edge advancements in blockchain, AI, and decentralized finance
✅ Network at exclusive side events and investor meetups
✅ Gain insights from leading speakers shaping the future of tech
Exclusive Discount for NCFA's Community
This is the last chance to take advantage of early discounts. Take advantage of our 15% discount before ticket prices go up!
How to Claim Deal
🔗 Register now: https://go.coindesk.com/NCFA
💰 Use promo code: NCFACANADA15 at checkout
Don’t miss this opportunity to be part of the conversation that’s driving the future of digital innovation. Secure your tickets today! 🚀
📢 Tag us and let us know if you’re attending! #ConsensusTO #NCFACanada
📲 Follow @consensus2025 and @NCFACanada on X and @Coindesk on LinkedIn for updates!
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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Capital Gains Tax Delay to 2026 Amid CRA Legal Battles
Capital Gains Tax | Jan 31, 2025
Image: Freepik/pvproductions
Capital Gains Tax Increase Delayed Until 2026 as CRA Faces Legal Challenges
According to Reuters and CBC, the federal government is delaying the proposed increase to the controversial capital gains tax until January 1, 2026. This is good news (at least temporarily) for innovation and investment in Canada. The changes to the capital gains tax policy received immense push back from many business groups, economists and the investment community, all warning the federal government that the policy would discourage investment in Canada and adversely affect economic growth.
See: Canada’s Fintech & Trade at Risk Amid U.S. Tariff Threat
The temporarily relief, also comes at a time when Canada is facing potential 25% tariffs from the U.S., and some tax payers are also challenging the Canadian Revenue Agency (CRA) legally, arguing that the the agency is enforcing tax changes when the changes have not yet been approved by Parliament.
With this delay, the decision on whether to implement the tax hike will now fall to the next government. The Conservative Party who is currently dominating the polls have already come out and said they strongly oppose the capital gains tax increase. Further, the Liberal Party of Canada leadership race front-runners have also come out and said they would reverse the proposed tax changes. Needless to say that the future of Canada's proposed capital gains tax policy is uncertain, it also wasted a lot of productivity in the process.
CRA Faces Court Challenges Over Premature Tax Collection
In case you missed it, Prime Minister Trudeau prorogued government until March 24, 2025 (he also resigned), and as a result the new tax policy wasn't legislatively approved by Parliament which meant that the policy was in limbo.
See: Trump’s Tariffs: Impact on Fintech and Canada’s Digital Tax
The problem was that the CRA decided to begin collecting the higher tax rate before it was formally enacted, leaving may taxpayers facing unwarranted burden. So multiple legal cases spawned challenging the CRA arguing taxpayer rights and the rule of law. Tax experts warn that if courts rule against the CRA, it could lead to refunds for those who overpaid taxes under the higher rate.
Conclusion
The fate of the proposed capital gains tax increase is now postponed to 2026 and will be decided by the outcome of the next federal election.
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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How Secure Networking Can Protect Your Business Data from Threats
Jan 29, 2025
Photo by Pixabay
Companies today are locking horns with cybercriminals in a high-stakes game of cat and mouse, where a single misstep can mean losing control of sensitive data and watching operations go off the rails. While ransomware attacks and data breaches can be menacing, effective countermeasures are emerging to counter these perils.
No one wants their hard work ruined by a cyber landmine. But take that anxiety off the table with a secure network, and you'll be amazed at how much further you can stretch your business goals, no longer held back by that gnawing uncertainty. Does the thought of a data breach keep you up at night? Secure networking practices can put your mind at ease. Here's how to implement them and safeguard your business.
What Is Secure Networking?
Every business is only as strong as its digital shield. A solid secure networking system encompasses robust tools, agile strategies, and battle-tested practices to defend against the latest cyber threats.
Picture a secure fortress safeguarding your most valuable assets from cyber threats, lurking malware, and sly intruders. A secure network is the invisible force that keeps your business humming along—don't underestimate its importance.
Key Elements of Secure Networking
- Encryption: Converts data into an unreadable format unless accessed by authorized users.
- Firewalls: Act as a gatekeeper, filtering traffic entering and exiting your network.
- Virtual Private Networks (VPNs): Securely connect remote employees to your network.
- Access Controls: Restrict data access to only those who need it.
- Intrusion Detection Systems (IDS): Catch pesky irregularities before they catch you off guard.
Why Your Business Needs Secure Networking
1. Protect Your Data from Breaches
Falling victim to a data breach can place a heavy financial burden on your shoulders, expose sensitive information, and cause sleepless nights. Secure networking uses encryption and multi-factor authentication (MFA) to lock your data away from unauthorized users. Even if data is intercepted, encryption ensures it remains unreadable.
Cybersecurity Statistic: According to StrongDM, 46% of all cyber breaches impact businesses with fewer than 1,000 employees, while 61% of SMBs were targeted by cyberattacks in 2021. Cybercriminals see small businesses as prime targets, making robust security essential.
2. Ensure Business Continuity
Cyberattacks can grind your operations to a halt. When cyber threats come knocking, firewalls and intrusion detection systems stand guard, quickly identifying and blocking malicious traffic to keep your system running smoothly. With secure networking, your business stays operational, no matter the threat.
3. Safeguard Remote Workforces
With more employees working remotely, VPNs play a crucial role in encrypting internet connections and protecting sensitive data accessed over public or home Wi-Fi. Anywhere, anytime—with this protection, your team is safe and sound.
4. Stay Compliant with Regulations
Regulations like GDPR and HIPAA demand robust security measures to protect customer data. For a business like yours, robust networking security is a no-brainer. With cutting-edge protocols and strict access controls, you can focus on growth.
5. Prevent Malware and Ransomware Attacks
Cybercriminals are shifting toward ransomware as a primary attack vector. In 2021, 82% of ransomware attacks targeted companies with fewer than 1,000 employees, and 37% of victims had fewer than 100 employees. These alarming numbers prove that businesses of all sizes are at risk.
Secure networking tools, such as anti-malware and regular software updates, are vital in stopping malicious programs before they can harm your systems. Minimize financial risks by being proactive; slashing downtime means more uptime for your business.
Best Practices for Secure Networking
1. Use Strong Encryption
Encryption is a cornerstone of secure networking. Choose advanced encryption standards like AES-256 to ensure your data remains safe, even if intercepted. Review and update encryption protocols regularly to keep pace with evolving threats.
2. Keep Systems Updated
Outdated software is a common target for cybercriminals. Schedule regular updates for all devices, systems, and applications. With automated updates, you can count on full protection without having to lift a finger.
3. Set Up and Manage Firewalls
Firewalls filter incoming and outgoing traffic, acting as your network’s first line of defense. Regularly review firewall settings and ensure rules are updated to match your current security needs.
4. Implement Multi-Factor Authentication
Passwords alone are no longer enough to secure your network. Multi-factor authentication asks users to authenticate themselves through additional steps, like entering a special code sent via text message.
5. Train Your Team on Cybersecurity
Your employees are your first line of defense. Equip them with the knowledge to recognize phishing attempts, create strong passwords, and follow secure networking practices. Regular training reduces costly human mistakes.
Tools to Strengthen Secure Networking
Investing in the right tools is essential for a secure network. Here are some options:
- Encryption Tools: VeraCrypt, Trend Micro Endpoint Encryption
- Advanced Firewalls: Next-Generation Firewalls (NGFWs)
- Cisco Meraki MS150 Switches: These switches are highly reliable and designed for simplicity, offering cloud-managed solutions that combine security, performance, and ease of deployment. With advanced Layer 2 capabilities, you get a network infrastructure finely tuned for performance and locked down tight for security.
- Network Monitoring Solutions: Tools that detect and alert you to potential issues.
For a detailed breakdown of how small businesses can implement threat detection and management, read this comprehensive guide.
Continuous Monitoring: The Key to Proactive Security
Potential threats don't stand a chance against vigilant network monitoring systems, which scan for issues and take swift action to prevent serious problems from arising. Tools that log and analyze network activity allow you to:
- Identify unusual traffic patterns.
- Audit access and changes in real time.
- Address vulnerabilities immediately.
Call to Action: Take Control of Your Network Security Today
Secure networking is more than just a defense—it’s an enabler for growth and peace of mind. Don't leave your business exposed to cyber threats—build a strong defense with multiple layers of protection.
Start with a foundation of encryption, firewalls, and VPNs, and reinforce it with ongoing monitoring to stay safe. Take action today to protect your business from cyber threats and ensure a safer, more resilient future.
Final Thoughts
Cyber threats aren’t going anywhere, but with proactive security measures, the right tools, and continuous monitoring, your business can thrive safely in the digital era. Stay ahead of cybercriminals by implementing secure networking best practices and strengthening your digital defenses today.
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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Issuer Direct Rebrands as ACCESS Newswire, Trades as ACCS
Partner News | Release | Jan 29, 2025
The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to highlight a key milestone for one of our industry partners. On January 27, 2025, Issuer Direct Corporation is officially rebranding as ACCESS Newswire Inc., trading under a new NYSE ticker symbol "ACCS".
ACCESS Newswire Inc. is redefining how businesses connect with investors and the media, launching the first-in-industry subscription-based PR and IR platform that optimizes the value and impact of client press release distribution and media and investor engagement with more flexibility and full transparency.
See: Risk Management Strategies for Investors: Protecting Your Portfolio
Brian R. Balbirnie, Founder, Chairman, and CEO of ACCESS Newswire Inc.:
"The rebrand to ACCESS Newswire represents more than a name change; it's a commitment to creating a dynamic, all-encompassing investor relations and public relations customer experience. Since 2006, we have continued to progress our business and maximize the value provided to the thousands of customers over the years, but we recognized the need for a brand that reflects the next 20 years of our business."
What’s New at ACCESS Newswire?
A more customer-centric and streamlined approach to PR and IR, built for the modern business needs:
- ACCESS Newswire is introducing an industry-first subscription solution under a single unified brand, offering an enhanced suite of media targeting, distribution, investor outreach solutions.
- On January 27, 2025, the company will officially trade under the NYSE American ticker symbol "ACCS". The company’s CUSIP number remains the same. Shareholders don’t need to take any action.
- New website URL: www.accessnewswire.com
Why This Matters
The PR and IR industries have relied on traditional pricing models and fragmented solutions for too long. ACCESS Newswire is changing the game by offering businesses a simpler, more efficient, and affordable way to connect with their audience. This change is innovative and is focused on building long term value for its customers. For more details, visit ACCESS Newswire Inc.
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 AI Competition Report Faces Big Tech Challenges
AI | Jan 27, 2025
Image courtesy of Freepik AI
Canada’s AI and Competition Report Shows Big Tech, Big Challenges, and Big Questions
On January 27, 2025 the Competition Bureau of Canada published the results of its consultation on artificial intelligence (AI) and competition on March 20 based on inputs from 28 stakeholders from global tech firms to startups, academics and consumer advocacy groups, outlining key issues and opportunities of AI in Canada. The findings highlight a pressing need for Canada to balance innovation with fair competition.
Key Feedback from the Consultation
Stakeholders agree that AI is a game-changer in business, forging innovation in sectors like finance, healthcare, and transportation, and opening up endless possibilities but it also brings real challenges that Canada needs to address head on. AI relies on access to high quality data, compute power and specialized expertise making it challenging for smaller businesses to enter the space or compete.
Big Tech Dominance
Perhaps the biggest concern is the dominance of AI by a handful of large big tech companies like Google, Amazon and Microsoft who control most of the AI infrastructure like data centers, supercomputers and AI chips. This concentration of power isn't new to Canada who is fine with a handful of large banks controlling the majority of the country's financial assets. While Canada has many AI players such as Cohere (Canadian government invested $240 million), Element AI (sold to ServiceNow in U.S.), Waabi, Peak Power, Tenstorrent, Deep Genomics (see CVCA post on growth of Canadian AI by investment mapped), and is recognized for its strong AI research leaders, they do not necessarily operate at the same scale as the likes of big U.S. or Chinese tech companies like OpenAI or Google. As with all forms of high concentration of power, it creates significant barriers for innovative startups and smaller firms to access the resources to train and deploy competitive AI models, however this could change with DeepSeek's disruption. Will Canadian AI firms be able to compete effectively globally, if they are dwarfed in size by their competitor's resources.
See: CMA Flags Big Tech’s Tightening Hold on AI Markets
Large players could also control the AI supply chain by not allowing smaller competitors to access the infrastructure and tech needed to develop AI systems. Exclusive partnership agreements could also adversely impact competition. Could large players shut off access to critical AI inputs in a type of tariff trade war?
Last December 2024, the Canadian government announced the Canadian Sovereign AI Compute Strategy, a $2 billion investment over 5 years aimed at reducing the reliance on foreign tech giants and strengthen Canada's AI infrastructure but will it be enough when the U.S. has launched a $500 billion Stargate AI infrastructure project?
Other AI Risks Flagged
AI tools such as algorithmic pricing can unintentionally lead to anti competitive practices, when for example, a system automatically adjusts prices to align with competitors - price collusion that's hard to detect and regulate.
The report talks about accountability when AI systems become more autonomous and complex, who is responsible for the outcome of their decisions. While not a new point, the risk is a legal and ethical challenge where AI generates biased or harmful decisions. Think for example a loan approval of auto hiring process.
See: How AI Is Evolving Finance, Security, and Global Economies
Another major concern of course is the distribution of misinformation and rise of fake AI generated content like deepfakes, fake reviews etc that mislead consumers, damage trust, and give unscrupulous businesses an unfair/unethical business advantage.
Overview of Recommendations
The recommendations in the report are quite high level and scattered throughout the report but here they are in a simple format.
- Legislation should be tech neutral
- Conduct comprehensive market studies to better understand how AI will impact competition (i.e. AI's impact on payments, global regulatory standards)
- Promote fair competition and reduce barriers (ensure equitable access to data for startups and SMEs, invest in compute resources to reduce reliance on foreign tech, foster partnerships between large and small players to prevent incumbents from dominating, support SMEs with incentives like grants and tax credits)
- Ensure transparency and consumer protection (may need to strengthen existing laws)
See: OpenAI’s U.S. Economic Blueprint and Takeaways for Canada
- Develop ethical and inclusive AI practices (encourage open source tools, prioritize societal values, privacy, fairness, prevent bias and discrimination)
- Collaborate globally with regulators like the UK's CMA, U.S.'s FTC and EU to harmonize AI policies and standards
- Define AI consistently across policies
- Continue stakeholder engagement
The consultation makes one thing clear. AI offers enormous potential for Canada but its benefits won’t be evenly shared unless Canada takes deliberate and strategic action.
A Few Questions About Competition and the Future of Canada's AI Strategy
- What changes are needed to Canada’s Competition Act to address issues like AI price fixing and monopolies?
- How can the government create fair rules for data sharing without holding back private sector innovation?
- Can Canada lead globally by focusing on ethical or responsible AI to stay competitive?
- How can open source AI tools be improved and supported to make it easier for small businesses to compete?
- What steps can Canada take to protect its AI infrastructure from global political risks and supply chain problems?
See:
Davos 2025 Themes and Takeaways for Fintech
Implications of Meta’s Fact-Checking Exit
Elon Musk’s X Challenges California’s Deepfake Law
- What new funding options beyond grants and tax credits could help startups afford access to computing power and data?
- What safeguards are needed to stop AI deepfake scams and harmful decisions made by biased algorithms?
- How can Canada hold companies accountable when their AI systems discriminate in areas like hiring or lending?
- How can Canada stop its top AI talent from leaving the country to work for global tech giants?
- What tools will Canada use to measure the success of its AI strategy in driving innovation, fairness, and trust?
Outlook
The Competition Bureau’s AI and competition consultation report stressed the importance for Canada to address big tech dominance, support Canadian innovation, and ensure fairness in the AI market. The Canadian Sovereign AI Compute Strategy is promising but must come with robust policies, global collaboration, and targeted investments to level the playing field.
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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Fintech Leader Insights on DeepSeek’s AI Disruption
AI | Jan 27, 2025
Image from DeepSeek website
What Fintech Leaders Need to Know about DeepSeek's Disruption
On January 20, 2025, a groundbreaking Chinese AI startup DeepSeek released its latest model called DeepSeek-R1 which is disrupting AI markets for its performance, cost effectiveness, and open-source model. Since launch, the ripples are already being felt in fintech and global funding markets, challenging incumbents like OpenAI and NVIDIA to rethink strategies for forward thinking businesses like fintech entrepreneurs.
What’s the Big Deal?
Imagine a car that goes faster, uses less fuel, and costs half as much. That’s pretty much what DeepSeek has done by releasing it's latest AI solution, and as a result markets are seeing major stock price shifts, strategic pivots, and a global selloff of AI related stocks. What makes this advancement compelling is that it's not just about technical performance but it significantly improves accessibility that will help democratize access to AI. Innovating on DeepSeek will cost dramatically less and is a shift in how fintech companies, investors and the wider market may/will approach AI.
- DeepSeek’s AI models are 40–50% cheaper to run compared to top competitors like GPT-4. They use a smart design called Mixture-of-Experts (MoE), which only requires power for parts of the model needed for each task, seriously saving on computing power. Models are also trained using reinforcement learning, super effective for logical tasks such as solving complex math problems and real time decision making.
- DeepSeek-R1 model is achieving amazing results, scoring 97.3% on the MATH-500 benchmark and 79.8% on the AIME test that are comparable or better than models from leaders like OpenAI.
See: OpenAI’s Latest Updates Stock Sale, Lawsuit & Innovations
- Due to U.S. restrictions on advanced hardware, DeepSeek was designed to work with efficient software that works well with more affordable components, cutting costs while maintaining competitive performance.
- DeepSeek's built on an open-source model that invites global collaboration, encouraging developers around the world to interact and improve the technology transparently while reducing costs.
What Are Competitors Doing?
The release of DeepSeek-R1 is forcing strategic responses by global AI giants - here are a few examples below:
- OenAI is involved with the $500 billion AI infrastructure investment called Stargate Project. It's a different approach than seeking incremental improvements to a larger scale and longer term strategy.
- Nvidia is investing more in software ecosystems like CUDA and AI specific frameworks in effort to tie customers into its hardware ecosystem by offering complementary valued added software.
See: Investing in the Future of AI and Blockchain
- Google's DeepMind recently increased its open source contributions, such as the release of AlphaCode on Github, to balance proprietary advancements with developer community innovations, and to be more transparent and collaborative.
- Meta has been actively promoting open-source AI development through initiatives like the PyTorch framework.
- Microsoft recently updated its partnership with OpenAI, which now let's OpenAI use diversified compute resources beyond Microsoft.
What DeepSeek Means for Fintech
Innovation and progress like DeepSeek's-R1 model offers fintech companies exciting opportunities while also being a wake-up call. Cost-effective access to AI infrastructure and tools can level the playing field, enabling smaller firms to compete with industry giants without requiring massive budgets. So companies need to reassess their tech stack if new solutions and cost structures that were once out of reach due to high costs, can now be integrated into new product innovations and market offerings. At the same time, given such a major market shift, companies need to stay plugged into the latest strategic pivots, capital investment trends, and any regulatory changes to remain competitive. Fintech investors should be evaluating open source AI models and diversify their portfolios.
Why It Matters
This story is still unfolding but it's pretty clear that DeepSeek has changed the game and disruption is only going to ramp up from here.
See: How Tencent’s Hunyuan3D 2.0 Advances 3D Design in Fintech
For fintech innovators this is a moment of opportunity to embrace new tools and rethink strategies to maintain an early adopters edge. As fintech integrates these advancements, consumers and businesses will only benefit from smarter, faster, and cheaper solutions.
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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