Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Entrepreneurs, Start-ups, Small Businesses
nesto Acquires CMLS Group, Katipults to Forefront of Canadian Mortgage Lending
M&A | Jun 24, 2024
Image: Nesto acquires CMLS group (release)
Backed by Major Investors, nesto Acquires CMLS Group Backed by Major Investors
As digital underwriting starts to take hold in Canada, digital mortgage lender, NESTO acquires CMLS Group, the third largest mortgage finance company in Canada, backed by major investors Diagram Ventures, Portage Ventures, National Bank of Canada’s corporate venture arm, IGM Financial, BMO Capital Partners, Fonds de solidarité FTQ, and Fondaction. The combined company will manage over $60 billion in mortgages across the country and aims to combine the assets of both organizations to create a more efficient and customer-focused mortgage ecosystem.
See: Canada’s Top FinTechs: Deloitte’s 2023 Fast 50
- This acquisition sees nesto diversifying into commercial mortgage financing, a new area of expansion for the firm. It's nesto's digital innovation together with CMLS Group's robust infrastructure that investors are combining to improve the mortgage process efficiency and accuracy for customers. The combination broadens the overall customer base and national footprint, leading to increased market share and competitiveness.
- Malik Yacoubi, CEO of Nesto, will oversee the united firm, while Sam Brown, CEO of CMLS Group, will remain president of the commercial division. Both brands will maintain their identities, preserving continuity and utilizing their established market reputations.
- While the terms of the acquisition were not disclosed in the release, the deal is supposed by major investments from prominent financial institutions, demonstrating confidence in its potential.
- The timing of this transaction aligns with the broader industry trends toward digital transformation and growing demand for more streamlined and customer-centric mortgage solutions. See: FundMore partners with EQBank to optimize mortage lending
Overview of CMLS Group
CMLS Group is one of Canada's largest independently held mortgage finance companies, known for its diverse portfolio of mortgage products and strong industry presence. CMLS Group, founded in 1974 in Vancouver, has over 40 years of experience in the mortgage market. It began with a concentration on commercial real estate financing before expanding to residential mortgages in 2012.
See: Michael Katchen: Redefining Mortgage Accessibility
The company offers a diverse range of mortgage products, including residential mortgages, commercial lending, loan servicing, and institutional services. CMLS Group, Canada's third-largest mortgage finance company, manages mortgages worth more than $60 billion. This huge portfolio demonstrates the company's substantial involvement in the Canadian mortgage market.
The company's leadership has recently changed, with Sam Brown joining as president and CEO in early 2024. Chris Brossard assumed the role of executive chair of the board, assuring continuity in strategic direction and leadership. CMLS Group has created strategic alliances to expand its service offerings and market reach. The company's engagement with Canada Life for mortgage servicing demonstrates its commitment to offering comprehensive mortgage solutions.
Outlook
Nesto's strategic purchase puts it at the forefront of the future of Canadian mortgage lending. The combination of digital innovation and comprehensive mortgage solutions will benefit Canadian consumers by providing more competitive rates, improved services, and a streamlined mortgage process.
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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AI Smart Guessing Algorithm Cracks 87 Million Passwords
Cybersecurity | Jun 21, 2024
Image: Freepik
A new algorithm cracks 87 million passwords in less than 60 seconds, challenging current cybersecurity measures.
Cybersecurity specialists have discovered a sophisticated guessing algorithm capable of cracking 87 million passwords in less than 60 seconds. This breakthrough highlights the necessity for stronger security measures in our increasingly digital environment.
Revolutionary Algorithm
Kaspersky's recent study revealed a revolutionary algorithm that blends old brute-force tactics with powerful machine learning techniques. This smart guessing system can forecast and test the most likely password combinations first, significantly lowering the time required to crack them.
See: Mastercard Announces Cybersecurity Winners and 6 New Start Path Participants
According to the data, 59% of 193 million credentials were hacked within 60 minutes, with an amazing 45% breached in less than a minute. By training on large password datasets, the system favours common character combinations, increasing its efficiency.
Antonov, a key researcher at Kaspersky:
"Smart algorithms make quick work of most passwords that incorporate dictionary sequences, and they even detect character alterations. "Using p@ssw0rd instead of password will not significantly slow down the algorithm."
How Does Smart Guessing Work?
Brute-force attacks, which loop through all conceivable combinations in search of a match, are generally inefficient. However, the smart guessing algorithm includes patterns such as dates, names, dictionary words, and keyboard sequences in its guessing technique. This makes it much more effective.
- According to Kaspersky's results, traditional brute-force methods cracked 10% of passwords in less than a minute, but the smart algorithm increased this figure to 45%. Over an hour, brute-force attacks had a success rate of 20%, compared to 59% for smart-guessing.
See: The State of Cybersecurity in The Fintech Industry
- Passwords created by humans tend to be predictable. Familiar names, significant dates, and common phrases are frequently employed. For example, in a YouTube experiment with over 200,000 people, the majority chose numbers like as 7, 37, 42, 69, 73, and 77 when asked for a random number between 1 and 100.
- Even when attempting random character strings, users frequently choose the centre of the keyboard. Because algorithms are intended to spot these typical patterns and character replacements, their predictability makes password cracking easier.
Cybersecurity Implications
Individuals and companies are advised to establish stricter password procedures. Simple replacements such as "p@ssw0rd" instead of "password" provide minimal additional protection. To improve security, users should use more complicated and unpredictable passwords that include upper and lower case letters, digits, and special characters.
Improving Password Security
- Your passwords should be at least 12 characters long and include letters, numbers, and symbols.
- Avoid easily guessed information, such as names, birthdates, or common words and patterns.
See: Blakes: Cybersecurity Trends in Canada: A 2023 Perspective
- Use Password Managers like LastPass and 1Password that can generate and store secure, unique passwords for all of your accounts.
- Enable multi-factor authentication (MFA) which is another layer of security which can dramatically minimize illegal access.
Conclusion
With the development of smart guessing algorithms, individuals and organizations are advised to proactively strengthen their defenses by adopting more complex passwords to protect their digital identities and online activities. It's also important to stay informed of the latest cybersecurity threats and protections.
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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BDC’s $250M Boost for Inclusive Entrepreneurship in Canada
BDC | Release | Jun 20, 2024
Image: Freepik
BDC Announces $250 Million Investment to Empower Diverse Entrepreneurs in Canada
The Business Development Bank of Canada (BDC) has reaffirmed its commitment to fostering inclusive entrepreneurship by announcing a $250 million investment to help majority-owned Indigenous, Black, and Women-led firms to help overcome long-standing obstacles to work towards establishing a more diversified and dynamic entrepreneurial ecosystem in Canada.
How Will $250 Million be Allocated?
Acknowledging the funding gap that new diverse firms are faced with, BDC has launched a $50 million program to promote early-stage enterprises run by women, Indigenous, and Black entrepreneurs. This program offers financial aid as well as key training to businesses with revenues under $3 million, assisting them in overcoming challenging entry barriers and building trust in mainstream financial services.
See: Trends in Reg CF for Minority and Women Founders
BDC Capital, the bank's investment section, has introduced two new $100 million platforms aimed at Indigenous and Black-led firms. These efforts are intended to supplement the existing $500 million Thrive Platform, which helps Indigenous and Black women entrepreneurs. By collaborating closely with community leaders, BDC hopes to build supportive and effective investment environments that are suited to the requirements of these areas.
To ensure that inclusion is included into all aspects of client service, BDC has formed a new Inclusive Entrepreneurship Team to implement region-specific programs that are targeted to specific requirements of minority entrepreneurs, improving both accountability and the impact of business development efforts.
Well Documented Challenges for Diverse Entrepreneurs
Current research identifies substantial barriers that diverse entrepreneurs encounter while raising finance. According to studies, minority-owned firms have a more difficult time obtaining capital than non-minority enterprises. Systemic biases, a lack of access to networks, and low faith in traditional financial institutions all contribute to these inequities. According to a research published by the Canadian Venture Capital and Private Equity Association (CVCA), Black and Indigenous businesses earn a disproportionately low share of venture capital investment.
See: Fast Company Survey Finds Capitalism at Crossroads
Similarly, the Brookfield Institute for Innovation and Entrepreneurship found that women and minority entrepreneurs are less likely to acquire bank loans and rely more on personal resources and informal funding sources. These obstacles highlight the importance of specific initiatives, such as those launched by BDC, in levelling the playing field and supporting the growth of diverse Canadian firms.
Lise Birikundavyi, Managing Partner, BKR Capital:
“With less than 0.5% of venture capital dollars in North America going towards Black entrepreneurs, there is a clear gap to fill. Since we started our fund focused on Black founders, we have seen an incredible amount of quality opportunities, and we believe it is great news to see an organization like BDC join forces to create a more diversified and robust venture capital industry.”
See: The Psychological Price of Entrepreneurship
Conclusion
By addressing systemic hurdles and providing targeted support to Indigenous and Black-led firms, BDC is helping to create a more fair and diverse entrepreneurial landscape. The $250 million investment will spur innovation and economic progress while more accurately reflecting Canada's diverse population.
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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Canadian Securities Regulators Extend Role of Exempt Market Dealers
Capital Raising | Release | Jun 20, 2024
Image: Freepik/jcomp
New Time-Limited Exemption Allows EMDs to Sell Prospectus Offerings for Growth Capital
The Ontario Securities Commission (OSC), Autorité des marchés financiers (AMF), British Columbia Securities Commission (BCSC), Financial and Consumer Affairs Authority of Saskatchewan (FCAA), Alberta Securities Commission (ASC), and Nova Scotia Securities Commission (NSSC) are allowing exempt market dealers (EMDs) to participate as selling group members in prospectus offerings, increasing their potential to assist business growth.
See: Final Report: Ontario Capital Markets Modernization Committee Recommendations
- Historically, EMDs have helped start-ups and small to medium-sized firms access finance by distributing securities under prospectus exemptions. However, as these companies scale they tend to use full prospectus offerings, which EMD participation has been limited due to regulatory restrictions.
- The recently announced time-limited exception is intended to address these hurdles. The exemption allows EMDs to join as selling group members in prospectus offerings, offering an additional route for capital acquisition for growing enterprises.
- Investment dealers will continue to play key roles in these offerings, including underwriting.
Grant Vingoe, CEO of the OSC:
“Creating favorable conditions for business success is pivotal to our economic prosperity. Today's measures underscore the commitment of securities regulators to foster the growth and success of our capital markets,”
Stan Magidson, CSA Chair and Chair and CEO of the ASC:
"We are proud of the collaborative efforts among Ontario, Quebec, British Columbia, Saskatchewan, Alberta, and Nova Scotia to implement these measures. Harmonizing regulations to support Canadian businesses is a priority.”
This new exemption was one of the recommendations in the Ontario Capital Markets Modernization Taskforce 2021 report, as well as similar efforts in other jurisdictions. Note, New Brunswick's securities regulatory body intends to issue a similar local blanket order soon.
See: OSC Activates 3 New Interim Class Orders to Boost Early-Stage Capital
Outlook
Hopefully this new exemption allowing EMDs to participate in prospectus offerings will help improve the current capital-raising environment for early-stage and scaling companies. This initiative will strengthen the relationship between EMDs and their growing clients creating a more dynamic market and opportunity.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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EQ Bank and FundMore Partner to Optimize Mortgage Lending
Release | Jun 19, 2024
Image: Freepik/rawpixel.com
FundMore and Equitable Bank Announce Partnership to Improve Mortgage Lending
FundMore, an artificial intelligence-powered mortgage underwriting platform, has scored a partnership with Equitable Bank, Canada's seventh-largest independent Schedule I challenger bank. This collaboration intends to streamline and improve the mortgage process, making it more efficient and accessible to borrowers across Canada.
- The major purpose of this collaboration is to use FundMore's innovative technology to improve Equitable Bank's mortgage operations.
- FundMore's platform uses artificial intelligence and machine learning to automate and improve mortgage underwriting accuracy, saving time and effort on mortgage approvals. This integration is expected to benefit both borrowers and lenders by reducing response times and improving risk evaluations.
See: FundMore x Senso AI Launch Solution to Transform Lending
- Quicker decision-making will also improve the overall customer experience while reducing the paperwork often involved with mortgage applications.
- Initially, the new services will be provided in major markets such as British Columbia, Alberta, and Ontario. There are intentions to expand further depending on the success of the initial rollout and market demand. This strategic expansion aims to meet the needs of various customer groups, including owner-occupied purchases, refinances, and rental property investments.
Mahima Poddar, SVP and Group Head of Personal Banking at Equitable Bank, stated:
“Partnering with FundMore to implement the new LOS is a natural extension of Equitable Bank’s challenger commitment to drive change in Canadian banking. This AI-enhanced tool will allow us to unlock new levels of turnaround time, satisfaction, and engagement for our mortgage broker partners and employees. We are excited to work alongside a like-minded organization in FundMore as we continue to advance our innovation agenda and set new industry standards for excellence in mortgage lending.”
See: Fintech Fridays EP43: Taking the Mortgage Process From 40 Days to Minutes
Conclusion
By integrating the latest AI tech together with robust banking services, we can expect to see efficiencies and improvements in the near future.
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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Bank of Canada Publishes New Retail Payment Enforcement Policies
Payments Regulation | Jun 18, 2024
Image: Freepik
The Bank of Canada has announced new supervisory policies around enforcement
On June 17, 2024, the Bank of Canada implemented various new regulatory measures around enforcement aimed at improving oversight of payment service companies.
See: BoC Speech: Essence of the New Retail Payment Activities Act
These policies centre on:
- Administrative Monetary sanctions (AMPs): Implementing new penalties for noncompliance.
- Enforcement Process and instruments: Streamlining enforcement procedures and instruments.
- Public Notice of Decisions: Developing guidelines for providing public notices of enforcement actions.
- Governor's Review: Defining the process for examining the Governor's decisions.
- Executive Roles: Clarifying the roles and responsibilities of the Executive Director and the Managing Director.
- Significant Adverse Impact: Managing problems with considerable negative consequences.
They also updated their Glossary of Terms about retail payment supervision.
Resource: BoC Update for PSPs: New Registration Guide and Supervisory Policies Available
Review this comprehensive page hosted by the Bank of Canada around Retail Payments Supervision - Policies and Guidelines.
Conclusion
The introduction of these policies comes at an important time, as digital payments continue to expand fast. NCFA Canada emphasizes the importance of staying informed to ensure compliance in order to maintain the payment ecosystem's integrity.
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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Sherwood Neiss Responds to WSJ’s Critique of Regulation A
Reg A | Jun 17, 2024
Image: Freepik/rawpixel.com
Crowdfunding Pioneer Sherwood Neiss responds to the WSJ's critique of Regulation A
As reported on Crowdfund Insider, on June 13, 2024, Sherwood Neiss, a pioneering voice in the investment crowdfunding field, responded to a Wall Street Journal (WSJ) piece criticizing Regulation A (Reg A) crowdfunding. The WSJ story raised concerns about Reg A's effectiveness and honesty, which Neiss strongly defended, citing the regulation's role in democratizing access to capital.
Understanding Regulation A/A+
Regulation A provides an exemption from registration for public offerings. Regulation A has two offering tiers: Tier 1, for offerings of up to $20 million in a 12-month period, and Tier 2, for offerings of up to $75 million. Companies with offers of up to $20 million can choose to proceed under Tier 1 or Tier 2 standards.
See: Insights and Challenges of Raising Capital via Reg A+
This rule enables corporations to offer and sell securities to the public without meeting the stringent standards of a full public offering, making it an appealing choice for startups and small businesses. Among the many checks and balances, companies who use this exemption to raise capital, to fuel the launch or growth of their business, must submit documentation to the Securities and Exchange Commission so that the offering can be "qualified" and approved so that they can raise money online through an intermediary or directly on their own platform.
WSJ's Critique
The Wall Street Journal article opined about the challenges with Regulation A.
- According to the report, fraudulent entities abused Reg A, resulting in significant investment losses.
- It criticized the SEC's apparent lack of severe control, claiming that this laxity has allowed inferior corporations to take advantage of the regulations.
- According to the article, Regulation A has not been as successful as expected in assisting businesses in raising significant capital.
Sherwood Neiss's Response
Sherwood Neiss, a principal at Crowdfund Capital Advisors and a well-known personality in the equity crowdfunding industry (who has also served as an advisor to NCFA since 2017), responded in depth to the WSJ report - you can read his response here. Neiss, who has helped shape global equity crowdfunding regulations, gave a counter-narrative stressing Reg A's positive influence. Neiss runs a data aggregator business so his insights are backed by significant data collection and analysis, so it's more of an accurate picture than anecdotal evidence.
See: CCA Report: Investment Crowdfunding 2024: Key Insights
Neiss mentions that investment crowdfunding has had a $7 billion economic impact - that's growing and pretty significant in our opinion. He also pointed out that these investments do more than just raise capital; they stimulate local economies, create jobs, and support diverse entrepreneurs including women and minorities far more than traditional venture capital.
He continues to say that there have been 8,500 offerings and more than $2 billion raised indicating that equity crowdfunding is growing at scale. Neiss attacks the WSJ for cherry-picking examples to present a bad picture, claiming that the vast majority of businesses benefit tremendously from these chances. This broad perspective demonstrates the potential for major innovation and economic contributions from these early-stage businesses. This all contrasts with the WSJ's portrayal.
Neiss addresses concerns about investor protection by highlighting the stringent requirements under Reg CF and Reg A, such as audited financial statements and mandatory annual reports. These measures enhance transparency and investor safety, countering the WSJ's implications of lax oversight.
"Unlike Regulation D (Reg D) offerings, Reg CF and Reg A impose stringent requirements to protect investors. Issuers under Reg A are mandated to provide audited financial statements and adhere to rigorous SEC disclosure requirements. Additionally, Reg CF issuers must provide annual reports to keep investors informed—another layer of transparency absent in Reg D offerings. In both these offerings, retail investors are capped at how much they can risk."
See: Fintech Fridays EP62: The Future of Investment Crowdfunding: Innovations, Data, and Opportunities
Neiss advocates for a balanced view that takes into account the inherent risks in all types of startup funding, including traditional techniques such as venture capital and angel investments. He emphasizes the democratizing effect of equity crowdfunding, which makes investment opportunities available to a broader audience beyond accredited investors.
"Your article needs to acknowledge the high failure rates of startups funded through traditional avenues such as VC and angel investments under Reg D."
The Future of Regulation A
While obstacles still exist, the law has clearly created new ways for small firms and entrepreneurs to acquire funding. As the sector evolves, stakeholders must work together to address concerns, strengthen protections, and promote a balanced narrative. It is equally crucial to acknowledge and celebrate the successes and possibilities of such regulations. By promoting openness, education, and balanced reporting, the crowdfunding community may contribute to a more inclusive and effective capital-raising 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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