Opinion: Governments need to modernize our financial regulations to better encourage innovation in the Canadian marketplace
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Fintech Opinions
Robocop vs. Terminator in Fintech; Comparing DeFi originations to Digital Lenders in the early years
Future of Finance | Lex Sokolin | Aug 27, 2019
I'
ve got a gentle, data-backed story this week inspired by a great distinction made in this Techonomy article by the Chief Digital Officer at Schneider Electric. The thesis tracks three key lessons from attempting to bring large companies into the 21st century: (1) transform the core of your business instead of fumbling around at the edges, (2) digitize your processes and separately figure out a distinct digital model, and (3) catalyze a digital ecosystem from the new model. You can think about the distinction as either taking the existing business and slowly swapping out parts from human to machine (e.g., like RoboCop), or building the robot from scratch utilizing the latest platforms, markets, and artificial intelligence (e.g., like Terminator).
This distinction is helpful in assessing how financial incumbents are performing, and why the Tech firm approach to Finance keeps is different from the traditional model. Goldman's credit card distributed through Apple looks a lot like RoboCop to me -- same old, but in a tech wrapping. But Goldman's approach into the market with Marcus, with digital lending and neobanking at the core, feels a lot more like Terminator. This is partly why Lloyds' announcement about launching a roboadvisor in 2020 is boring -- too little, too late, while Softbank plows hundreds of billions into neobanks, neoinsurers, digital lenders, and artificial intelligence.
See: AI Will Transform 500 Million White-Collar Jobs In 5 Years; Silicon Valley Must Help
Anyway, here's the data backed part. If you are focused on Fintech and building out digital, in whatever form, you are on the right track. A recent report from EY looking at the investment preferences of mass affluent and wealthy clients paints the picture clearly.
Just three years ago, only 18% of investors were using mobile apps to manage their money -- that number is now 40%. Face to face interactions have decreased rapidly, from 30% to 16%. But so is Web-app use! Phones have become the home for most of our attention, and financial activity is no exception.
They are our preferred method for dopamine delivery, and transactional activities like angry comments on Trump videos and free stock trading on Robinhood are a natural fit. More considered advice delivery -- things like setting up a trust, dealing with the financial implications of divorce, tax structuring across jurisdictions -- still benefits from at least 30% human interaction.
But mobile isn't the only growth platform for interaction. Check out the expected rise in chatbot and voice-first interactions below. People have now gotten enough smart assistants that there is an expectation of improvement in the quality of their applications and services. Today, less than 2% of respondents prefer machine assistants as a primary communication channel, but that preference rises to an expected 9% in the future. People want to talk to their machines, Star Trek style, about financial services.
The final bit I want to showcase is just how good of a "Terminator" decentralized finance is becoming. Numbers differ of course depending on how you measure things, but charts below should be directionally correct. I took the annual growth of digital lending globally in the early years, and normalized against the growth in decentralized lending. The products are different -- all of DeFi today is collateralized, while digital lending involved actual underwriting risk (i.e., credit risk, not asset volatility). Yet still, it is helpful to see the two as comparisons, with the conclusion that DeFi is growing faster despite the alien nature of its underlying technology. The sources are Autonomous NEXT and Loanscan.
See: 5 Digital Policies Small Biz MUST Have
Similar things could be said of the Initial Coin Offering boom/bubble, comparing it to much slower but more sustainable growth in Fintech venture capital. Moderating growth against a correct regulatory approach is the right answer -- but innovation does often outpace the existing ruleset. It seems inevitable to me that DeFi lending will need to back into regulated banking and lending entities, or at least partner with them, to avoid being chased around or shut down by the authorities. Enabling tax arbitrage is not a long-term sustainable business model.
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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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One size doesn’t fit all: Strict regulations meant for big banks holding back fintech in Canada
Financial Post | Darren Gill | Aug 26, 2019
Opinion: Governments need to modernize our financial regulations to better encourage innovation in the Canadian marketplace
Imagine the owner of a small but successful café in Prince George. She is seeking capital to finance a second location but is unable to access a loan from a bank. She is not sufficiently well-connected to seek out her own investors and doesn’t have a wealthy family to lend her the money. How can she access the capital she needs to open that second location?
Now imagine there was a safe online service for finding would-be capital investors. Our café owner could connect with a private individual who holds investable capital. The two parties could enter into a contract on their own terms, mediated by the service provider. This peer-to-peer (P2P) approach to lending would match ventures with investors who might not meet each other but for the online platform. This is the emerging future of financial services delivered through financial technology (fintech). Sadly for our theoretical café owner, the current regulatory environment does not allow for this sort of open exchange.
Given current regulations, P2P loans qualify as securities and therefore require regulators’ approval of detailed informational prospectuses. This means the small café owner must hire lawyers and specialists to draft documents and disclosures even when simply seeking a loan — something she wouldn’t have to do had she gone to one of the banks. But if the banks won’t take her, what is she supposed to do?
Hurdles like this that lock small players out of capital markets are entirely unnecessary. The fintech service provider to our industrious Prince George café owner and her investor would manage risk on its platform to ensure that neither party ends up being short-changed.
See: Peer to Peer Lending: The Future of Fintech is Now
P2P lending is just one example among many of strict regulation holding back the creative disruption of financial services. Fintech companies are subjected to the same strict regulations that apply to traditional financial service providers. They must also adhere to comprehensive regulations covering consumer protection, privacy, anti-money laundering, data security, and more. Financial regulations are clearly in the public interest, including with fintech. But governments need to modernize our financial regulations to better encourage innovation in the Canadian marketplace.
Government initiatives such as the 2019 modernization attempts to the Bank Act and Canadian Payments Act have been widely applauded by industry but these initiatives largely aim to increase the flexibility of established financial institutions. One size — the quadruple XL that suits our biggest financial institutions — doesn’t fit all. There is considerable room for innovative policy reforms for fintech, such as employing opportunity zones or creating regulatory exemptions for P2P lending involving small businesses, like our café owner in Prince George.
With artificial intelligence, new forms of competition, and greater efficiency, fintech could revolutionize how financial services are delivered, especially for Canadians under-serviced by the traditional financial services industry.
Take Toronto-based WealthSimple, for example. It already provides high-quality investment advice and robo-advising via an online platform. Such services, traditionally available only to the economically privileged, are now being offered to the masses and at a fraction of the cost. Fintech also holds the promise of giving rural, remote, northern and Indigenous communities banking services similar to those of urban Canadians, and at reduced costs.
See:
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Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much Greater
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March 1, 2019: NCFA Submission to the Ontario Securities Commission on Regulatory Burden
Less burdened by regulation, P2P lenders in the U.S. have been facilitating loans between investors and entrepreneurs since 2005. Capital-seekers can now look beyond the big banks for more competitive rates and more convenient procedures for getting a loan.
Payments, money transfers, insurance, and other types of financial services are ripe for modernization and disruption. Even amongst the big banks, there is a push towards digitizing services and incorporating new technologies. The fintech revolution benefits players of all sizes.
While Canada’s fintech environment has been recognized as a leading global hub, fintech adoption rates lag behind much of the world. According to the EY Fintech Adoption Index 2019, Canada’s adoption rate is at 50 per cent, versus 64 per cent globally. Part of the reason has to be restrictive regulation.
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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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News on China cryptocurrency and more reforms
Schulte Research | Paul Shulte | Aug 21, 2019
China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so. This will give added momentum to Libra.
Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can. I’m pretty sure I’m right that it has backing from the very top of the US govt.
1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players:
- The big banks: CCB, ICBC, BOC, ABC.
- Alibaba and Tencent. Positive momentum,,,
- Union Pay. Interesting — to keep this alive.
All others will be secondary. The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is. Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium. No foreign firms in Libra (except, weirdly, Mercato Libra from Arge).
2. China yesterday doubled the size of the free trade zone in Shanghai and has allowed partial capital account convertibility in Shanghai. This is big and a challenge to HK. It will also drop duties in Shanghai.
3. ALibaba has cancelled the secondary listing in HK until further notice due to the instability. Big negative for HK.
4. Singapore has suspended all university exchange programs between Singapore and Hong Kong for this year due to the instability. SO, people are stuck in Singapore to finish programs.
Check out Paul Schulte's new book: AI & Quantum Computing for Finance & Insurance: PRC VS US. https://www.worldscientific.com/worldscibooks/10.1142/11371
Related:
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China’s digital fiat currency is ‘nearly ready’ for launch: PBOC official
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Central banks should consider using digital currencies: China think tank
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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The Global Currency War Has Begun. China’s Yuan Breaks the 7 to $1 Band. Why is The Dollar Rising?
Global Research | Dr. Jack Rasmus | Aug 5, 2019
Over this weekend, China’s Yuan currency broke out of its band and devalued to more than 7 to $1. At the same time China announced it would not purchase more US agricultural goods. The Trump-US Neocon trade strategy has just imploded. As this writer has been predicting, the threshold has now been passed, from a tariff-trade war to a broader economic war between the US and China where other tactics and measures are now being implemented.
Trump will no doubt declare that China is manipulating its currency. A devaluation of the Yuan has the effect of negating Trump tariffs imposed on China. But China isn’t manipulating its currency. Manipulation is defined as entering global money markets to buy and/or sell one’s currency in exchange for dollars (the global trading currency) in order to influence the price (exchange rate) of one’s currency in relation to the dollar. But China is not doing that, so it’s not manipulating. What’s happening is the US dollar is rising in value (or expected to) and that rise in effect lowers the value of the Yuan. The same is happening to other currencies as well,as the dollar rises. Why is the dollar then rising? There’s a global stampede to safety and that means buying US Treasuries–which are now in freefall in terms of interest rates (and escalating in terms of price). Prices from one year or even less, to 10 and 30 year Treasuries are accelerating. But to buy Treasuries, foreign investors must sell their currencies and buy dollars before buying Treasuries. That escalating demand for dollars is what drives up the value of the dollar, which in turn drives down the value–i.e. devalues-the Yuan in relation to the dollar.
See: Bitcoin price surge may not be trade war but whales
In other words, the slowing global economy which is being driven by the Trump trade wars is what is causing the flight to the dollar and to the safe haven of US Treasuries. Trump’s policies are at the heart of the global slowdown (already in progress due to fundamental forces stalling investment and growth). That slowdown is what’s driving the dollar and in turn lowering the Yuan. Trump policies are ‘manipulating’ the Yuan.
China is of course allowing the devaluation to occur. Previously, it was entering money markets to buy Yuan in order to keep it from devaluing. Now it’s just allowing the process to occur. This is China’s response to Trump’s imposing an additional 10% tariffs on $300 billion of China imports last week. It signals that the ‘trade’ war (now becoming an economic war) has moved beyond tariffs.
With Trump’s recent actions, and China’s now response, the potential for a trade agreement in 2019 looks even more unlikely than before.
What will Trump now do? If he remains true to his past behavior when bargaining partners stand up to him, he’ll try to find a way to ‘up the ante’ as they say, and take additional action. He could step up his attack on Huawei and on other China corporations’ partnerships and investments in the US. China will in turn impose restrictions on US corporations doing business in China (i.e. more licensing, more customs inspections, and imposing more non-tariff barriers). It could unleash an anti-American goods boycott in China. It could reduce the export supply of critical ‘rare earths’ it has. It could suspend its previous decision to allow US corporations doing business in China to have a 51% ownership of those operations. And then it has its ‘nuclear options’, as they say: to cut back sharply or cease purchasing US Treasuries and thus recycling US dollars back to the US. Should that happen, the US government would have to borrow more from other sources to offset its annual budget deficit. That would raise the national debt annually even faster than it has been growing–now more than $22 trillion and projected now to rise more than $1 trillion this year. Should recession occur, the deficits and debt could rise as much as $1.7 trillion, according to the US Congressional Budget Office, CBO, research arm.
See: Central banks should consider using digital currencies: China think tank
But with demand for dollars to buy Treasuries surging, the US Treasury and Fed would have more difficulty selling Treasuries, equal to China’s decline of purchases, given that Treasury prices are escalating and interest rates falling.
In short, the US-China trade war, the slowing global economy (now about to spill over to the US economy), the US budget deficit, and Fed interest rates are all inter-related. Trump policies are creating economic havoc on all these fronts.
What are some of the likely responses therefore to the China responses to Trump’s hardball strategy-driven by US neocons since May?
The neocons will have attained their goal, which has always been to scuttle negotiations with China unless the latter capitulated on the technology issue. Behind the tariffs, behind the trade war, has always been the war over next generation technologies (cybersecurity, 5G, and AI). It’s now clear that China will not capitulate, so no trade deal is possible so long as the US neocons remain in control of the trade negotiations which, at this point, they still do. The neocons will now use China’s strong response to Trump’s latest tariffs to convince Trump to take an even harder line against China corporations in the US and abroad with obsequious US allies like the UK and Canada.
Trump’s campaign re-election staff will see this as an opportunity to start blaming China for the slowing US economy. Themes of ‘China the currency manipulator’ and ‘China the source of US opioids’ may become the mantra from the White House.
US big business and multinational corporations will be further motivated to put pressure on Trump to go back to the negotiating table and settle. To date, however, they’ve been largely unsuccessful with influencing Trump and the trade negotiations. The Pentagon, military industrial complex, and US war industries have Trump’s ear and they’re shouting ‘technology capitulation’ or no deal’.
The US Farm sector will be in dire straits now. It’s almost certain that within the next six months Trump will have to provide them a third bailout, costing $20 billion or more. That will mean a total of $50 billion cost in farm subsidies due to the China-US trade war.
See: Know the Difference between A Day Trade & Swing Trade Here
Globally, emerging market economies are likely to be big losers from the worsening trade relations between Trump and China. Their currencies will decline like the Yuan. But they have far fewer resources than China has to weather the crisis. Declining currency values in emerging market economies (EMEs) will mean more capital flight from their economies, seeking ‘safe haven’ in US Treasuries, in other currencies (Japan’s Yen as ‘carrying trade’), or in gold. That capital flight will slow their domestic investment. Their central banks will then raise interest rates to slow the flight, but that will slow their domestic economies further. The declining currencies will also mean rising import goods inflation and drive their domestic inflation levels higher, as their economies simultaneously slow. EMEs will face both more recession amidst rising inflation.
The China-US trade deterioration will also likely exacerbate inter-capitalist conflicts, as is already beginning to appear in the current South Korea-Japan trade dispute.
The worsening US-China situation will also have a negative effect on Europe’s economy, already about to slip into recession soon. More dependent on exports, especially Germany, the deterioration of global trade will accelerate Europe’s slowdown. The growing likelihood of a ‘hard’ Brexit coming at the same time in October, will almost certainly plunge Europe into another major recession as well, even before the US.
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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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Capital One data breach shows why it shouldn’t be a tech company that does banking
ComplianceX | The Compliance Exchange | Aug 8, 2019
Once upon a time, any financial institution entrusted with your money and sensitive information would be housed in an imposing building made of granite. Its vault, often visible from the lobby, was formidable. And its managers would always be prudent, conservative types. Think Fidelity Fiduciary Bank, the fictional institution in the Mary Poppins movies, whose chairman in the original film sang: “Invest your tuppence wisely in the bank, safe and sound, soon that tuppence, safely invested in the bank, will compound.”
The idea was to convey a sense of security so that people would feel good about depositing their hard-earned cash and storing their prized possessions in safe deposit boxes. It spilled over to investors who saw bank stocks as prudent, though hardly spectacular, investments.
Nowadays, though, banks can’t do enough to shed the dowdy images, perhaps none more so than Virginia-based Capital One Financial Corp. During an earnings report this year, CEO Richard Fairbank all but said that he did not view his bank as, well, a bank:
“What we’re doing at Capital One is building a technology company that does banking, instead of a bank that just uses technology.”
Which brings us to the company’s announcement that a lone hacker — allegedly a troubled 33-year-old woman in Seattle — had managed to penetrate its firewall to acquire sensitive data on more than 100 million card customers and applicants.
The sad truth is that many modern banks don’t much care about people’s private information. The same apparently goes for companies that work with banks. On the same day the Capital One breach was reported, credit rating agency Equifax agreed to pay $700 million to settle a 2017 data breach.
Institutions might say they do care, but what really matters is how fast they can digitize everything about their company and migrate it to the cloud. By doing this they increase their profit margins and rates of growth, and become Wall Street darlings.
It’s not hard to see the financial pressure on banks. Since the Great Recession, their stock performance has been so-so, while tech companies have done extremely well. Anything that they could do to function more like tech companies that do finance, rather than vise versa, could make them hot properties.
See:
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Open banking data tapped to speed up laundering checks
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Designing a data transformation that delivers value right from the start
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While Canada debates, others are commercializing our most valuable asset: data
Tech companies, however, are bad examples to follow. They collect data on people’s habits that allow advertisers, political operatives, hostile foreign powers and others to glean valuable insights. And banks hold even more sensitive information than do most tech outfits.
It’s one thing to be lax and self-interested with people’s web surfing histories or social media contacts. It’s quite another to be cavalier with account information, Social Security numbers and credit scores. These can be sold to people interested in taking out fraudulent loans, making fraudulent purchases and engaging in other forms of identity theft.
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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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Bitcoin is an Unstoppable Force
Daily Fintech | | July 29, 2019
TLDR. During the recent House Committee on Financial Services’ hearing about Facebook’s, Libra, Rep. Patrick McHenry described Bitcoin as an unstoppable force:
“The world that Satoshi Nakamoto — author of the Bitcoin white paper — envisioned, and others are building, is an unstoppable force. We should not attempt to deter this innovation, and governments cannot stop this innovation, and those who have tried have already failed. So the question then becomes, what are American policymakers going to do to meet the challenges and the opportunities of this new world of innovation?”
Today, the entire market cap of digital assets was around $263 billion. Digital currency market caps, coin prices, and overall trade volumes have dropped since June. Looking at what’s been happening over the last few months, the question on everyone’s mind is how is this time different from the past, when Bitcoin reached highs and then came down crumbling.
Well, many things are different.
One of the things is that most of investing is not happening by retail investors, as it did in 2017. Google searches for “Bitcoin” are only 10% of what they were in 2017. FOMO by retail investors has not really kicked in yet. I can only imagine what will happen with the price of BTC when it does. Source: google trends
Another thing that’s different is institutional demand for Bitcoin. Its soaring. Institutional interest is high, as booming derivatives trading on CME can attest. On June 17, open interest at CME Group saw 5,311 contracts totaling 26,555 BTC, approximately $246 million, dwarfing the volumes during the 2017 price peak. Fidelity, Bakkt, and TD Ameritrade all have plans to launch institutional trading products for BTC.
See: Visa Makes Its Second Investment Into a Crypto Startup
More importantly, network fundamentals better than ever. Hash rate has increased, driving up security. Security is measured by how much it costs to mount a 51% attack on Bitcoin. The more hash rate, the more security. Over the past five years, Bitcoin’s hash power has increase 1000x, growing to 70 million trillion hashes per second. Source: blockchain.com
The increase of daily on-chain transactions and block size, indicate that more people are transacting. Both the on-chain transactions per day (line below) and average transaction value in USD (fill below) have risen significantly since last year. Source: coinmetrics
The average BTC block size (fill below) has increased substantially, when you compare it to last year’s.
Best of all, average transaction fees have been relatively low, compared to those in 2017. Currently its around $1.92, despite increased block size and on-chain use. Scalability have kept fees substantially lower than late in 2017.
Source: bitcoinfees.info
All this is happening almost a year before Bitcoin’s block reward halving, which set for May 2020. Next May, mining rewards will be reduced from 12.5 to 6.25 BTC, which will reduce the number of Bitcoins minted when a block is verified, and the number of Bitcoins potentially sold to the market.
See: A Global Review Of The Regulatory Considerations Relating To Crypto-Asset Trading Platforms
As Bitcoin’s supply gets tighter and tighter, its inflation rate drops. Unlike governments that can print fiat currencies and risk inflation, Bitcoin’s inflation rate by 2024, the will drop under to 1% and over time it will decrease toward zero.
Today, the number of Bitcoins in circulation is 17.8 million Bitcoins. There will only be 21 million Bitcoins ever issued and we will not reach that number for another 120 years. While we only have another 3.2 million Bitcoins that will ever be created, this limited supply does not restrict Bitcoin’s use as a medium of exchange. Each Bitcoin is equal to 100 million Satoshis. So, if Bitcoin’s price ever reached $1 million, one Satoshi would be worth just a penny.
And it not the only thing that’s happening.
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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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Fintech Investor Interview: Rob Antoniades, General Partner of Information Venture Partners
Information Venture Partners | Rob Antoniades | August 1, 2019
Intro: NCFA Fintech Confidential spoke with some of Canada’s experienced fintech investors, on their background, how Canada has evolved, what we should be doing, advice to fintech founders and what keeps them awake at night. This is part 4 of a 4 part series.
What is your background, and why did you start Information Venture Partners?
I have operated VC groups or offices for several banks including CIBC, BMO and then RBC. My finance experience prior to running these VC operations, was heavily influenced by my time in equity capital markets and included equity research, sales and trading, investment and merchant banking. These experiences have helped me tremendously as a Fintech investor. I have lived some of the challenges that we are trying to solve. I co-founded (with David Unsworth) Information Venture Partners to fill a void in the market to fund companies developing technologies relevant for financial services.
How have you seen the Canadian fintech ecosystem change in the past 5 years? How has the Canadian fintech ecosystem evolved?
The Canadian Fintech ecosystem has changed tremendously over the past 5 years, for the better. We are still transitioning as an industry, from very early stage, mostly first-time entrepreneurs 5 years ago or prior, to a more mature ecosystem with companies now generating 8 figures of revenue, some repeat entrepreneurs, and yet still a vibrant start-up ecosystem.
See: Peer to Peer Lending: The Future of Fintech is Now
How can we strengthen and grow the Canadian fintech ecosystem?
The easiest way to build the ecosystem is to concentrate our efforts, of the industry (broadly defined), to supporting domestic Fintechs. For example, our financial institutions spend billions on information technology and if concentrated on Canadian companies, would accelerate the development of the Canadian Fintech community. Clearly, there would be no expectation that these institutions support disruptive and disintermediating Fintechs.
What advise would you give to Canadian fintechs competing globally?
Canadian Fintech companies need to understand that they can start in Canada, and if they have traction here, this momentum can be leveraged with FIs globally. Our financial system and institutions are highly regarded globally. We can leverage that advantage.
However, in the absence of such a beachhead, there are thousands of customer opportunities around the world. If your solution addresses a common pain point, you can just as easily build a company with lead customers from virtually any part of the world. The entrepreneurs need to have that global mindset.
What keeps you awake at night?
Insomnia, joint pains and the recurring thought that we, as a nation, have not developed a unified strategy to develop our nation as a leading fintech hub, in the global context.
We as cities or regions, have generally not rallied around local champions, and we as a nation have not developed a coherent strategy. Can it be done without a strategy? Absolutely, but it would be exponentially more powerful, quicker, and likely successful, if we had the financial and moral support of the ecosystem including all levels of government, industry, capital providers, advisors and entrepreneurs.
See: Form Fintech & Holt Accelerator Create Map of Canadian FinTech Ecosystem
This strategy would build on local strengths, be minimally competitive between the centres, and not too difficult to execute if we had a champion, with capital and a willingness to make a few mistakes in order to accelerate the advancement of the cause.
Is there anything else you’d like to add?
There has never been a better time to be a Fintech entrepreneur in Canada, at least not in the 20+ years that I have been involved in the sector.
Robert Antoniades, General Partner and Co-Founder, Information Venture Partners
Robert Antoniades co-founded Information Venture Partners in 2014 with Dave Unsworth to work with startups in the field he knows best: financial services. Robert is interested in finding the disruptive ideas and entrepreneurs that believe new or better information is foundational to businesses. He believes that financial institutions need technology to service their customers, reduce cost and compete. Some of his main areas of interest include SaaS, next generation analytics including artificial intelligence and machine learning, capital markets, banking, wealth management and insurance technology.
More Canadian Fintech Investor Interviews in this 4 part series:
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Part 1: Karim Gillani, General Partner, Luge Capital
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Part 2: Christian Lassonde, Founder & Managing Partner, Impression Ventures
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Part 3: Peggy Van De Plassche, Founding Partner, Roar VC
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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