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
Into the Mind of Sam Altman’s OpenAI Journey
Sam Altman | Jan 7, 2025
Image courtesy of AI
Sam Altman's Reflections on Leadership and AI (ChatGPT is 2 Years Old)
On January 5, 2025, Sam Altman shared reflections on AI innovation, leadership, and organizational growth since ChatGPT became just two years old over a month ago. His post offers a few profound lessons drawn from his own journey at OpenAI that will surely only apply to a handful of high profile tech entrepreneurs/investors innovating the most impactful technologies of our lifetime (perhaps). Let's break it down and enter the mind of Sam Altman.
Select Quotes and Insights
"Expect significant advancements in the next few years, but don’t be surprised if some of them come with unexpected risks."
Altman knows rapid advancements are inevitable in the world of AI but he also rightfully knows that he is unsure about the unexpected challenges that such advancements may bring. It's a cautionary note to humanity that is to prepare governments and organizations to remain proactive and diligent in terms of governance and control. In finance, this could mean a black swan event. In terms of humanity, as the saying goes, 'expect the unexpected.'
"We know how to build AGI and are working on it. AGI could help address humanity's biggest challenges—from climate change to curing diseases."
Altman seems confident in the milestone of achieving Artificial General Intelligence (AGI) and that it's within reach in just a few years. He sees AGI as a transformative tool that will tackle/solve major global challenges like climate change and curing disease.
See: OpenAI’s Latest Updates Stock Sale, Lawsuit & Innovations
To put it in perspective, the attainment of AGI would be beyond innovations like 'fire' or the invention of the 'lightbulb'. AGI would go beyond just enabling new technologies but could also actively create, optimize and manage them, autonomously redefining the concept of productivity while making decisions across all sectors. It's akin to the agricultural revolution that evolved humans from hunter-gathers into more complex societies. AGI would be a moment where intelligence itself becomes a scalable resource and might only be comparable to becoming conscious of life itself and humanities role in it. AGI would move humans past solving problems such as survival and into the realm of how we perceive and live our own existence or intelligence/progress.
"AI agents are coming, and they will transform industries."
A lot has been written about the agentic web and how AI agents will be 'released', goal orientated and capable of managing tasks and projects in its entirety that would game-change the way businesses operate today. The media is already calling these autonomous and highly logical bots 'virtual employees' that Altman predicts will become available in 2025, opening up new possibilities. NCFA touched upon this a while back, see: Bracing For Change In The Era Of The Augmented Workforce
"Co-evolve with the technology. There is still so much to understand, still so much we don’t know, and it’s still so early."
Reading between the lines, Altman is hinting at that as AI evolves, humanity must adapt alongside it (he doesn't say what if we don't want to co-evolve however). Remaining open-minded while continuously learning is essential to ensure the tech benefits society holistically without leaving large swaths of groups behind.
See: OECD-FSB Discuss New AI Trends in Finance
"Teams tend to turn over as they scale, and OpenAI scales really fast."
Altman is referring to the challenge that as companies grow quickly team dynamics can change, causing a lot of turnover while trying to focus on a direction.
"When any company in an important industry is in the lead, lots of people attack it for all sorts of reasons, especially when they are trying to compete with it. Getting fired in public with no warning kicked off a really crazy few hours, and a pretty crazy few days."
Altman is referring to his public firing and the chaos that followed. He sees it as a breakdown of governance and communication (of well intentioned people). It's a high pressure leadership role in a competitive environment under constant scrutiny. There's a need for better ways to handle such crises.
Emotional Quotient
Altman's reflections say that he's a self-aware leader who is quite transparent about his challenges. He admits mistakes and learns from them while remaining committed to long term goals showing a high degree of emotional intelligence, if not resilience.
See: Meta’s Vision to Swarm Facebook With AI Users
His governance issues indicate the need for more proactive leadership to better manage such rapid growth and public scrutiny. Altman comes off as being vulnerable yet optimistic which people can relate to making him an inspiring tech leader.
Outlook
Altman's thoughts point to a future where AI upends industries and challenges traditional leadership and technology. AI's potential to solve humanity's greatest challenges relies on the ability to balance innovation with responsibility. Organizations must be willing to evolve and prioritize strong governance and ethical practices.
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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Appeals Court Voids Nasdaq Board Diversity Rule
DEI | Dec 12, 2024
Image: Freepik/rawpixel.com
A Legal Setback for Diversity as U.S. Court Ruling Invalidates Nasdaq's Diversity Requirements for Boards
Nasdaq’s attempt to promote diversity on corporate boards just hit a major legal roadblock this week. The Fifth U.S. Circuit Court of Appeals has overturned the rule requiring companies listed on Nasdaq to include diverse directors or explain why they do not. In a close 9-8 decision, the court found that the rules were incompatible with federal securities laws and that that Securities and Exchange Commission (SEC) overstepped its authority when they approved these requirements.
See: How Fintechs Are Tackling Financial Inclusion in Canada
As a refresher, Nasdaq and the SEC implemented rules in effort to improve diversity on corporate boards and strengthen companies by bringing varying opinions and voices to the boardroom that would impact 3000 companies. The rules required listed companies to have at least one women and one member of an underrepresented minority or LGBTQ+ on their boards. If companies opted out, they would need to publicly disclose their reason why. In 2016, women held just 15% of board seats and that figure increased to 23.1% in recent years.
Implications
By striking down these rules, the court raises questions about the future of diversity, equity and inclusion (DEI) policies and their legal foundations in corporate governance. Nasdaq's initiative was seen as a milestone that encouraged companies to recognize the value of different perspectives in decision making.
See: Conservative Backlash Leads to DEI Retreat on Wall Street
While some businesses voluntarily prioritize diversity, others might scale back such initiatives, signalling future hurdles for any regulatory attempts to add diversity to the boardroom. The ruling is part of a national debate about DEI that ranges from companies policies to college admissions.
Closing Thought
Diverse boards are often touted as having better decision making and stronger financial performance. They should reflect society’s evolving values and nurture a wider range of voices in leadership roles. How will businesses balance voluntary diversity efforts with growing legal and political challenges?
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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UK vs. Canada: A Tale of Two Different Crypto Consumers
Crypto Survey Results | Dec 3, 2024
Key Insights from the UK FCA's 2024 Crypto Consumer Research Survey
On Nov 26, 2024, the Financial Conduct Authority (FCA) published results from its latest 2024 Cryptoassets Consumer Research Survey. The UK-based survey is in Wave 5 which is part of a longitudinal survey designed to track insights and trends over time given that attitudes towards cryptoassets can evolve.
Download the 80 page PDF survey results report here
The survey data was collected from August 12-21, 2024 via an online self-completion questionnaire. Participants were sourced from the YouGov panel in two phases (groups) to ensure a diverse cross-section of the UK adult population.
- Phase 1 was a national sample of 2,199 UK adults
- Phase 2 follow-up was 1,097 cryptoasset users (active or former) to gain deeper insights
Key Findings
Awareness
- 93% or nearly all adults in the UK are now aware of cryptoassets (slight increase from 91% in 2022).
- Men are more likely to have heard of cryptoassets (96%) compared to women (90%).
Ownership Trends
- Cryptoasset ownership has grown to 12% of UK adults or 7 million people (up from 10% in 2022). This is a significant increase from 2020 where only 4% of UK adults owned cryptoassets.
- Ownership is higher among younger individuals (24% of those aged 18-34) and those with annual household incomes exceeding £100,000 (25%).
- Men are more likely to own crypto (19%) than women (9%).
Usage and Investment Motivations
- 36% buy crypto as part of an investment portfolio.
- 26% see it as a gamble for significant gains or losses.
- Long-term saving and day trading are also popular and increasing motivations.
See: 10 Insights from IOSCO’s Report for Crypto Investors
- More users are holding crypto: £1,001–£5,000 (17%, up from 14% in 2022) and £5,001–£10,000 (19%, up from 6% in 2022). About one-third (32%) still hold crypto valued at £100 or less.
- 67% of crypto owners have used their assets in some way. The most common use is converting cryptoassets into currency (43%).
Advertising and Its Impact
- 38% of crypto-aware individuals said they remember seeing crypto adverts primarily on social media (44%).
- 18% felt curious after seeing ads but it wasn't enough to buy.
- 10% were influenced to purchase crypto.
- Crypto ad awareness is higher among younger respondents and men.
Risks and Challenges
- 9% of crypto users said they were victims of scams including fake social media endorsements and phishing.
- 90% of the scam victims said they lost money (20% reported losses of over £1,000).
- 20% of crypto users mistakenly believe they are financially protected against losses (up from 10% in 2022).
Regulation and Consumer Perceptions
- 58% of users said they were comfortable trading in an unregulated market.
- 27% of users said they would invest more if cryptoassets were regulated, and another 25% would invest if regulation included financial protection for losses.
- Only 8% of non-crypto users said they would likely invest more, if the market were regulated.
See: Report Insights: DIY Investors in Canada on the Rise
Emerging Trends
- 27% of users said they participated in staking in the past year. 9% participated in lending or borrowing cryptoassets.
- 72% of crypto purchases were funded with disposable income. Credit card payments doubled to 14%.
- 72% store crypto on the exchange where they purchased it.
AI Image
So How Do UK and Canadian Retail Investors Compare?
Comparing the above 2024 cryptoaseets research by the FCA with the Crypto Asset Survey conducted by the Ontario Securities Commission (OSC) in 2023 reveals some interesting differences between retail crypto investors in the two countries.
1. Ownership Trends
Crypto ownership is on the rise in the UK with 12% of adults now owning cryptoassets (up from 10% in 2022). This growth is fuelled by younger adults, higher-income households, and a more optimistic view of crypto’s future utility.
See: Wealth Management Insights for Fintechs and Investors
Crypto ownership in Canada declined from 13% in 2022 to 10% in 2023. Many Canadians are still cautious and concerns about risk, volatility, and lack of understanding, slowing adoption.
2. Engagement and Usage
UK investors are more active users of their cryptoassets. 67% of crypto owners in the UK report using their holdings for various purposes, such as converting to fiat currency (43%) or trading between cryptoassets (33%). This indicates a shift toward integrating crypto into financial strategies.
In Canada, engagement remains lower. A significant proportion of Canadians (30%) report never using their crypto after purchase. When used, the most common activity is converting crypto to fiat currency (25%). This suggests many Canadians view crypto as a speculative asset rather than a functional tool. Worth noting that the OSCs survey was in 2023 so perspectives could very well be changing, especially in the current bull run.
3. Risk Perception and Confidence
Crypto's risk perception in the UK is more balanced. While 58% of UK investors are comfortable trading in unregulated markets, many still express interest in clearer regulations, with 27% saying they’d invest more if the market were better regulated.
Canadians are more skeptical of crypto. 77% expressing regret over their purchases (far higher than 20% reported in the UK). Nearly half of Canadians (49%) cite risk as their main barrier to investing, and confidence in the ability to buy or sell crypto in the future is low (16% highly confident).
4. Knowledge and Awareness
Awareness of cryptoassets is much higher in the UK with 93% of adults familiar with the concept. Many UK investors also demonstrate a deeper understanding of crypto’s potential, treating it as a diversification tool within their broader financial portfolios.
See: Overcoming Barriers to Growth in Financial Regulation
In Canada, only 54% of respondents could correctly define cryptoassets, and many rely on informal sources like friends or social media for information. This knowledge gap contributes to poor decision-making and higher regret.
5. Advertising and Influence
Both countries report significant exposure to crypto advertising, primarily through social media. However, UK investors appear better equipped to evaluate such promotions. In the UK, 10% of individuals reported purchasing crypto due to advertising while Canadians, despite similar ad exposure, showed greater regret about purchases influenced by these ads.
In Summary, the characteristics between UK vs Canadian retail investors is as follows, do you agree?
As per the FCA's 2024 cryptoasset survey, UK retail crypto investors tend to be more involved and optimistic and are using crypto as part of a broader financial plan. They actively use their crypto and recognize its use beyond just making a quick profit.
See: Canada’s Proposed Mutual Fund Crypto Regulations 2024
Accordingto the 2023 OSC crypto assets survey, Canadian retail crypto investors are more cautious and focused on quick gains. They use crypto less often and are more likely to feel regret about their investments and may reflect uncertainty or confusion about how crypto fits into their financial goals.
Why Such a Difference?
Regulatory Environment
In the UK, the FCA has worked to build trust in crypto by creating clear rules and educating people about safe trading. These efforts have helped reduce confusion and fear around using crypto.
In Canada, while regulators have made strides in creating balanced regulations, over half of people don’t know about these crypto regulations, and a third mistakenly think there are no rules at all. This uncertainty makes people more skeptical and less likely to get involved in crypto.
Market Maturity
The UK’s crypto market appears more developed with many investors actively using their crypto for things like trading, converting to cash, or earning through activities like staking. These actions show that people in the UK see crypto as a tool they can use in their financial lives, not just something to buy and hold.
See: UK’s Regulatory Crypto Roadmap from Sandbox to Mainstream
In Canada, according to the survey data, many people buy crypto but don’t use it much beyond that and there are fewer options like staking or other services that are widely available. This makes crypto feel more like a speculative investment than a practical financial tool.
Cultural Attitudes Toward Risk
Canadians tend to be more risk-averse with nearly half perceiving crypto as too risky to consider. *Update* Worth considering if the way the OSCs 2023 crypto asset survey results are 'over-egged' in the way risks are presented while shying away from reporting the positives (not balanced), and as unintended (or intended) consequences go, the OSC may just be unfairly miseducating consumers causing slower adoption in Canada?
In the UK, while investors do have risk concerns they are more likely to integrate crypto into diversified portfolios, helping them to balance risk vs reward with a long term view.
How Canada Can Close the Gap
- Simple, transparent rules for crypto and communicate it widely so investors feel more confident in participating.
- Run public education campaigns to teach people about the benefits and risks of crypto. Work with industry associations, schools, financial experts, and regulators to make crypto easier to understand.
- Highlight more real life use cases of how crypto can be used for things like international payments, staking, or decentralized finance (DeFi). Help people see it as a useful tool, not just a risky gamble.
See: UK Proposes Bill to Recognize Crypto as Personal Property
- Train advisors to talk about crypto with clients. This can help investors make smarter decisions instead of relying on advice from friends or social media.
- Set clear rules for crypto ads to prevent misleading claims. Require clear explanations of risks to reduce regret after purchases.
- Encourage Canadian platforms to offer more services like staking and educational tools. A wider range of options will help attract more active and confident investors.
Conclusion
According to survey results, Canada and the UK have taken different paths in their crypto markets. While UK investors are confident and actively use crypto as part of long-term financial plans, Canadians remains cautious, speculative, and less engaged. To close this gap, Canada must focus on clear regulations, better education, and highlight crypto's practical use cases beyond speculation.
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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Be Part of a Landmark Study Shaping the Future of Fintech
Survey | Nov 26, 2024
Image: 2nd Global Fintech Research Initiative (CCAF, WEF)
Help Shape the Future of FinTech: Join the Global Research Initiative Today!
The Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School and the World Economic Forum invite you to participate in the 2nd Future of Global FinTech Research Initiative. This flagship study will provide key insights into global Fintech trends and challenges. Insights from Canadian fintech innovators are key to this research which will explore the bleeding edge trends such as:
- Artificial Intelligence in Finance: How is AI revolutionizing the industry?
- Partnerships Between Fintechs and Financial Institutions: What are the opportunities and challenges?
- Financial Inclusion: The impact of Fintech in underserved markets
- Key Performance and Growth Indicators: Industry benchmarks for success
See: CCAF and WEF Unveil 2024 Global Fintech Report at Davos
Why Participate?
- Help Shape Policy & Industry Trends: Your data will contribute to evidence-based decisions for regulators, policymakers, and stakeholders.
- Global Recognition: Your organization will be acknowledged in the report and associated materials.
- Access Exclusive Insights: Early access to findings and invitations to key events with industry leaders.
- Checkout the CCAF and WEF 2024 Global Fintech Report (unveiled at Davos)
Click the Survey Link to Start
- Survey Link: Complete the Survey Here
- Time Commitment: 20 - 30 minutes
- Deadline: *Extended until December 28, 2024 (from Nov 29)
- Confidentiality: Individual entries are strictly confidential and only aggregated data will be reported.
Take part in this unique opportunity to drive the future of Fintech and ensure Canada’s voice is strongly represented on the global stage.
For more information, reach out to the team at cambridgeFMO@jbs.cam.ac.uk.
Take the survey --> Now
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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Elon Musk’s X Challenges California’s Deepfake Law
AI and Tech Regulation | Nov 18, 2024
Image: Freepik/pikisuperstar
Elon Musk’s X lawsuit Over California’s Deepfake Law Ignites Debate on Free Speech, AI Ethics, and the Future of Tech Regulation
On Sept 17, 2024, the Governor of California, Gavin Newsom introduced the Defending Democracy from Deepfake Deception Act of 2024 (otherwise known as Assembly Bill 2655). It's a new law aimed at curbing the growing issue of AI-generated deepfakes, especially those that could mislead voters during elections. The law requires platforms like X (formerly Twitter) to either label or remove deceptive content related to elections.
Then on October 3, 2024, a federal judge granted a preliminary injunction which temporarily blocked the enforcement of AB 2655 based on concerns that the law might infringe upon First Amendment rights by potentially suppressing free speech.
See: California’s AI Safety Bill Veto and Its Impact
Then last Thursday, Nov 14, 2024, Elon Musk's X has filed a lawsuit in Sacramento against the legislation arguing that it infringes on free speech rights protected by the First Amendment. X's legal challenge highlights the ongoing conflict between maintaining freedom of expression versus curbing the misuse of deepfakes that erode trust in institutions and manipulate public opinion.
Insights
- The amount of deepfake content online has been exponentially doubling between 2018 and 2020. There's been a noticeable increase in cases targeting political figures and events.
- In July 2024, Musk shared a deepfake video of Vice President Kamala Harris on X that went viral but he forgot to mention that it was a parody. In response, California's Governor Gavin Newsom stated, "Manipulating a voice in an 'ad' like this one should be illegal. I'll be signing a bill in a matter of weeks to make sure it is.".
- The purpose of California’s AB 2655 legislation is protect election integrity by preventing manipulative deepfake content from spreading misinformation. Critics argue that the law is too broad and that it may impact artistic expression, satire and even legitimate political commentary.
"[The law] will inevitably result in the censorship of wide swaths of valuable political speech and commentary and will limit the type of 'uninhibited, robust, and wide-open' debate on public issues that core First Amendment protections are designed to ensure."
Rob Bonta, California Attorney General said last Friday:
"The California Department of Justice has been and will continue to vigorously defend AB 2655 in court, which aims to combat deepfake election content."
Why It Matters
This case is a key test for how governments and tech companies handle the rising influence of AI while protecting basic rights.
See: Three Generations Discuss AI Concerns, Hopes, and the Future
The decision will have significant impact into how technology is regulated from an election misinformation standpoint to broader AI abuses. For Canada and other countries, it provides valuable lessons on the need create laws that balance innovation, ethics, and public trust.
Conclusion
The lawsuit isn't just about California but it's a global conversation on how societies will balance freedom and accountability in the digital age. As AI technology evolves at a dizzying pace, societies must answer tough questions about who holds power in the digital world and how to ensure that power is used responsibly.
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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Accelerating Financial Innovation and Access in Canada
Canadian Innovation | Nov 13, 2024
Image: Freepik/www.slon.pics
How Canada Can Speed Up Financial Innovation and Serve More People
At Elevate FinTech Stage 2024, BetaKit hosted two conversations that highlight both the challenges and opportunities Canada faces in its financial sector. Together, these sessions reveal an urgent need for Canada to catch up on financial innovation. Here’s a look at what was discussed and some fresh ideas Canada can look to adopt if interested in driving real progress.
- The first session with Koho’s Daniel Eberhard and Peter Aceto focused on the obstacles of becoming a licensed bank and balancing speed with regulation.
- In the second, Josh Scott from BetaKit discussed barriers to financial inclusion with Eva Wong of Borrowell, Manzil’s Mohammed Sawwaf, and Julien Brazeau from the Department of Finance.
Session 1: Koho’s Banking License Journey and Balancing Product Innovation
Koho CEO Daniel Eberhard and Chief Banking Officer Peter Aceto shared how becoming a licensed bank would help Koho to lower costs, control its financial products, and offer benefits directly to its customers. But the process has been long and complicated with the Office of the Superintendent of Financial Institutions (OSFI) imposing unpredictable timelines and criteria.
See: Canada Post Expands into Financial Services with KOHO
To protect their ability to innovate quickly Koho split off into two divisions: one for tech and one for banking. This setup allows them continue building new features while managing the regulatory demands of becoming a bank.
Daniel Eberhard, CEO Koho:
“We’d be really foolish to bet the business on something as unpredictable as the bank license process.”
He stressed that Koho would pivot if the banking license path became too restrictive, doubling down on Koho's commitment to innovation.
Panel Takeaways:
- Securing a bank license comes with significant regulatory hurdles and compliance requirements. Koho is carefully weighing the costs/risks with the benefits.
- Koho is continuing to innovate without waiting on regulatory approval by cleverly separating tech and banking into separate divisions.
- Koho’s story highlights how difficult it is for Canadian fintechs to break into the traditional banking sector. Without a clear path, companies like Koho must decide how much time and money they’re willing to risk.
Session 2: Financial Inclusion and Barriers to Access
In the second panel, Josh Scott led a conversation on financial inclusion with Eva Wong (Borrowell), Mohammed Sawwaf (Manzil), and Julien Brazeau (Department of Finance). The discussion focused on why many Canadians, especially those in niche communities, remain underserved by the traditional banking system. Wong pointed out that, although most Canadians have a bank account, many are “underbanked”—lacking access to the range of services they need. Sawwaf explained that for Canada’s 2 million Muslim citizens, the absence of halal banking options has excluded a large group from mainstream financial services.
Julien Brazeau commenting on Canada's slow approach to open banking:
“Six years is far too long for anyone to consider fast.”
Panel Takeaways:
- There’s a growing need for financial services that address the needs of specific groups like new Canadians, remote communities, and religious groups.
- Brazeau admitted that the government has been slow to work directly with fintechs, a gap that has delayed innovation and frustrated financial startups. There's a lack of collaboration.
See: Canada’s SMBs Deserve Better Banking. Lessons from US Fintechs
- After 6 years, Canada’s open banking implementation is still incomplete and the delays are stifling competition and are making it harder for Canadians to get the services they need.
Image: Freepik/Canada day
Ways Canada Can Drive Financial Innovation in Canada
Here are just a few innovative approaches that could propel Canada's financial ecosystem forward.
1. Fast track the implementation of open banking and enable the sharing of credit data from the start
For open banking to have an impact right from the start in Canada, credit data portability should be possible from the initial launch. This would enable customers to transfer their credit history between institutions smoothly thus minimizing obstacles and simplifying the process of changing service providers.
See: Open Banking: Revolutionizing Financial Data Sharing
Such an approach would establish a best practice where fintech companies could provide services to individuals encountering difficulties in accessing credit, such as those with unconventional or limited credit backgrounds (that are underserved by the banks).
2. Make it necessary for government financial programs to be compatible with Open Banking standards
When open banking is fully implemented in Canada the government could promote its usage by making it a requirement for government initiatives like business loans and housing support to be compatible with open banking standards. By enforcing this rule, banks and financial technology companies would have to follow banking protocols making it easier for Canadians to access these services no matter which institution they are with. This approach aims to increase collaboration within the industry without relying on voluntary adoption by private entities.
3. Create a "Digital Financial Inclusion Fund" to broaden access, for interest groups
Canada could establish a "Digital Financial Inclusion Fund" similar to initiatives in Singapore and the EU to address the financial needs of marginalized communities by supporting fintech companies in developing specialized products for groups such as rural residents and underserved populations with limited access to traditional banking services. This would be a collaborative effort involving the government of Canada and the private sector and its partners.
4. Tiered licensing system could help smaller fintech companies enter the market more smoothly
Canada could consider implementing a strategy like in Australia with a restricted banking license regime which permits fintech firms to offer services as they grow. This approach would enable startups to connect with customers on and gradually meet full qualifications without sacrificing security or consumer safety.
5. Establishing a Unified Digital Identification System for financial services
Influenced by India's Aadhaar and Estonia's e-residency initiatives a government supported digital identification system could enhance Know Your Customer (KYC) procedures within Canada's institutions. With a digital identity Canadian citizens could safely use financial services reducing the time consuming and frequently repetitive account setup processes.
See: The Trifecta of India’s Digital Transformation is Turning Heads Globally
The government management of a digital ID system would streamline access for Canadians living in underprivileged areas and potentially link with open banking to ensure secure data sharing practices. Data privacy may be a concern however.
6. Establish a program for fostering partnerships between Fintechs and Banks to offer financial solutions
Canada could create a program to encourage partnerships between banks and fintech companies to focus on financial inclusion projects. Inspired by Brazil where banks and fintechs have teamed up to serve underserved communities, this program would encourage similar collaboration in Canada for initiatives like microloans, financial education, and better digital banking services in remote areas. Rather than mandating these partnerships, the government could offer incentives, such as tax benefits or lighter regulatory requirements to banks and fintechs that meet goals for reaching underbanked populations. This would allow both sectors to work together to create practical solutions that benefit consumers and support Canada’s financial inclusion goals.
Closing Thought
Creating a faster, more competitive, and more accessible financial ecosystem requires bold action, a risk-taking mindset (with the benefits in sight) and proactive partnerships between the government, banks, and fintechs.
See: Canada’s Innovation Paradox – Strong Start, Missing Impact
By embracing innovative approaches and learning from global successes, Canada can move beyond slow timelines and limited access and work towards becoming a leader in financial inclusion.
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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SEC Insights on Balanced Regulation and Non-Bank Finance
Regulation | Speech | Oct 30, 2024
Image: Freepik/rawpixel.com
Uyeda’s Insights on a Global Framework for Balanced and Adaptable Finance for Growth
At the 2024 AIMA APAC Annual Forum, one of largest gatherings of regulators, hedge fund managers, and alternative finance and institutional investors in the Indo-Pacific region, SEC Commissioner Mark Uyeda delivered a talk around key issues including regulations for private funds, advancements in digital assets, and the importance of international cooperation among financial regulators.
See: Innovative Approaches to Smarter Regulation
Uyeda's perspective offers valuable insights for global markets especially for those aiming to strike the balance between innovation and regulatory supervision. Below are five quotes from Uyeda's speech, each reflecting on his approach to supporting a global framework for balanced financial future.
1. Supporting Growth with Balanced Private Fund Regulation
“Private fund regulation should be precise, safeguarding investors without becoming an impediment to growth.”
Commissioner Uyeda raised concerns that overly prescriptive rules could limit innovation within funds by focusing disproportionately on compliance rather than allowing room for a diverse range of approaches to investing. Such strict rules might discourage large investors from participating in alternative asset classes and strategies and they would miss out on higher yielding returns that perhaps better align with their investment goals.
See: Balancing Fintech Innovation and Regulation
He believes that rules should be designed to allow private fund managers the freedom to innovate while still ensuring transparency and accountability to investors. The key takeaway here is that regulation should support growth without unnecessary restrictions.
2. A Nuanced Approach to Digital Asset Regulation
“The approach to digital assets should avoid blanket prohibitions; instead, it should consider each asset’s unique characteristics and risks.”
Uyeda's comment highlights that digital assets need a customized approach in regulating them. Specifically, rules should be adapted to the unique features and risks associated with varying digital assets rather than a one-size fits all approach. This is true in markets around the world including the U.S. and suggests the way forward is (again) balanced growth with responsible oversight ultimately crafting flexible guidelines that support innovation while addressing specific traits of crypto and other new technologies.
3. Embracing Non-Bank Finance to Catalyze Innovation
“Non-bank financial entities are critical to a diversified economy, providing essential liquidity without the rigidity of traditional banks.”
Uyeda argues that non-bank finance (sometimes called 'shadow banking') plays an important role in maintaining diverse markets and resilience. Instead of looking at non-bank finance as purely a risk, he highlights its importance in driving economic stability and spurring innovation.
See: Federal Reserve Launches Novel Activities Supervision Program Targeting Digital Assets and Non-Bank Partnerships via Banks
He believes that policymakers should support these types of finance while still keeping markets stable, and that such an approach is especially important for economies that benefit from a range of funding sources to fuel growth.
4. The Importance of Global Regulatory Cooperation for Stability
“Global regulatory collaboration is not just beneficial but essential to maintain financial stability in an interconnected market.”
He believes that global regulators must collaborate and in doing so they can develop a unified way to oversee financial risks that cross borders. This kind of teamwork is especially beneficial for sectors like crypto and alternative finance where consistent and agreeable (global) standards will help drive innovation while also keeping global markets stable.
5. Building Sustainable Growth Through Adaptability and Transparency
“Transparent, adaptive regulation is the foundation of sustainable market growth.”
Uyeda stresses the importance of having clear and flexible regulations especially in fintech and alternative finance where things evolve quickly and regulations need to be adaptable. This mindset and approach helps build a financial environment that remains up to date with new technologies and trends while keeping investor protection a priority.
See: Insights from the UK’s Pro-Innovation Regulation Review
Looking into the future, change is constant. Uyeda’s focus on having adaptable and transparent rules is a way to future-proof financial systems for whatever challenges and opportunities come their way.
A Global Framework for Balanced Finance
Uyeda’s insights show the value of regulatory frameworks that protect investors while allowing room for economic growth and innovation. That means adaptable and well tailored regulation along with a spirit of international collaboration is necessary to keep the economy strong and competitive. Great lessons for any regulators including Canada looking to balance innovation, growth, and investor protection.
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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