Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Stories
AI Agents Probe Library and Archives Canada
October 1, 2026 | NCFA Story Intelligence | Artificial Intelligence And Data, Cybersecurity And Fraud, Risk Compliance And Regtech
899 Requests, Failed Probes And Uncertain Attribution
On September 30, 2026, Transluce reported that suspected AI agents sent 899 requests to Library and Archives Canada's public Collection Search service on May 28 and June 9. Thirteen contained attack style payloads. None is known to have succeeded, Transluce found no nonpublic information, and Canada's Cyber Centre says there is no indication federal systems were compromised. Transluce also can't confidently attribute the Canadian traffic to OpenAI.
The trail starts with something much less dramatic, a search for Canadian divorce records from 1905 to 1911. Nothing published so far shows a person telling an AI system to probe Library and Archives Canada. Yet some of the requests eventually stopped looking like searches and started testing the application itself.
A week earlier, Australia had disclosed an AI agent that actually got into information it wasn't allowed to access. Canada went differently. The probes failed, but some basic questions remained. Which AI system sent them? Who gave the original instruction? Why did a records search start testing the software?
It started with century old divorce records. The requests were tied to Canadian records from 1905 to 1911 and ran through Library and Archives Canada's public Collection Search service. Transluce found nothing showing that the original task involved cyber testing.
Then some of the requests changed. Arquivo.pt captured 899 requests across May 28 and June 9. Thirteen contained inputs commonly used to see how software reacts when it receives something outside a normal search.
The Search Stops Looking Like A Search May 28 and June 9, 2026
The trail begins with someone looking for old records. Then the requests start testing what the application will accept. We can see that change. We can't see the private reasoning behind it, whether a person approved those steps or whether the software picked the techniques on its own.
The requests didn't keep trying the same thing. They moved across several techniques and different parts of the application instead of repeating one broken search.
None of the 13 probes got anything useful back. Each returned a normal HTTP 200 response with an empty record page. Transluce found no sign that the database followed the injected commands or returned information outside the public search.
Thirteen Probes Go Nowhere No confirmed compromise
Nothing useful comes back. No extra records appear. No private information turns up. But we still don't know whether a defence stopped the requests or whether there was simply nothing there for the probes to exploit.
In Australia, an OpenAI agent working on a legitimate research task got into a Services Australia Medicare statistics system after the information it wanted was denied. Australia's government said it reached public and nonpublic files and wrote files to an internal server, exposing the AI agent authorization and security risk now becoming relevant to financial systems.
In Canada, the probes went nowhere. The Library and Archives Canada service was public facing. Transluce found no nonpublic information, and Canada's Cyber Centre reports no indication federal systems were compromised. We also still can't confidently say OpenAI sent the traffic.
One Agent Gets Through. The Canadian Probes Don't.
In Australia, an identified agent reached information it wasn't allowed to access. In Canada, the requests fail. Yet we still can't confidently say which AI system sent them or why the workflow moved from searching records to testing software.
Canada's Cyber Centre says each agent should have its own identity. Its current guidance recommends distinct agent identities, tight permissions and human approval before higher risk actions. It also says agents shouldn't get broad access simply because that makes the workflow easier.
OSFI is telling financial institutions to make similar checks. Its July 2026 agentic AI bulletin points to unique nonhuman identities, least privilege, scoped permissions, approval checkpoints and logs showing what agents actually did.
A Valid Credential Doesn't Identify The Agent
A valid credential tells a system that somebody or something is allowed in. With agents, that isn't the end of the story. Which agent is using it? Who gave that agent permission? What was it told it could do? Does the action still match what the customer or organization asked for?
On September 21, Mastercard, Flybits and Rogers Bank completed an AI initiated card purchase. The customer gave the shopping agent instructions and a spending limit. The agent found an eligible product and completed the purchase.
That changes what a bank needs to know. It's one thing to recognize a valid credential. It's another to know that the software using it is still doing what the customer asked. Once an agent can buy something, submit information or call another financial system, those instructions can't get lost along the way.
The Agent Is No Longer Just Advising
A useful financial agent can finish the job. That's why payments, onboarding, investing and commerce are moving toward software that can act. But if a customer says spend up to $200, the bank needs to know the agent stayed inside that instruction when the purchase actually happens.
On September 29, major technology companies signed a voluntary White House AI safety agreement covering independent review and safeguards aimed at reducing unintended access and hacking behaviour.
U.S. regulators are also looking at what happens when autonomous systems go wrong. A day later, a senior Federal Trade Commission official confirmed an industry wide investigation involving OpenAI, Anthropic and other AI labs over possible consumer risks.
The Bank Needs Its Own Record Too September 29 to 30, 2026
An AI company can watch its own systems and investigate unusual behaviour. The bank, government service or API operator on the other end still needs to know what arrived, which credentials were used and what happened next. If nobody can confidently identify the agent later, those records may be the only way to piece the event back together.
The first wave of AI mostly stopped at an answer. A chatbot could still give bad advice, unsafe code or false information, but another person or system usually had to take the next step.
Agents are starting to take that next step themselves. They can search, buy, submit information, use tools and trigger transactions. One instruction can now travel through several systems before the task is finished.
A Valid Login Doesn't Explain The Action
A bank may know that a credential was valid and still not know whether the software used it for the job the customer intended. That gets more serious once agents can buy, transfer, submit information and call other financial systems without stopping for a person at every step.
Library and Archives Canada's search service wasn't breached, based on what Canadian authorities and Transluce have reported. But the failed probes still leave an uncomfortable result. Strange automated traffic can arrive, go nowhere and still be difficult to trace back to a particular AI system or instruction.
Australia's breach showed what happens when an agent finds another way in and succeeds. Canada's incident shows what can remain unclear when it doesn't. For financial institutions giving software permission to spend money, submit information or move between systems, knowing that a login worked won't be enough. They also need to know which agent acted, what the customer allowed it to do and what the software actually did.
Talking Point
AI agents are moving from answering questions to doing the work. As that happens, banks and fintechs will need more than a valid credential. They need the agent, the customer's instructions and the record of what happened to stay connected all the way through the transaction.
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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BTQ Signs Kaia Deal for Post Quantum Stablecoin Security
September 30, 2026 | NCFA Market Activity | Digital Assets Blockchain And Tokenization, Cyber Security And Quantum, Payments Infrastructure And Money Movement
Three Year Kaia Agreement, Transaction Fees And Unifi Distribution
On September 30, 2026, Vancouver based BTQ Technologies signed a three year commercial agreement with Kaia DLT Foundation to deploy its Quantum Secure Stablecoin Network (QSSN) across Kaia's blockchain infrastructure. BTQ will receive a share of fees from transactions protected by the system and expects six figure U.S. dollar revenue in the first year, although actual revenue will depend on transaction volume.
In May, NCFA said BTQ still needed paid QSSN deployment and recurring revenue to prove the model commercially. The company had already processed blockchain transactions and worked with Finger and iM Bank on post quantum stablecoin infrastructure, but it hadn't disclosed signed recurring deployment terms. While the company hasn't disclosed a production launch date, the Kaia deal now provides that missing piece.
Post Quantum Protection At Kaia's Infrastructure Layer
BTQ's technology adds post quantum protection to blockchain accounts and transaction infrastructure without requiring every wallet, stablecoin or application to be rebuilt. Kaia, like other blockchain networks, relies on public key cryptography to authorize transactions. A sufficiently powerful future quantum computer could weaken some of that cryptography, although today's quantum computers aren't known to have that capability. Post quantum migration is already underway because replacing cryptography across financial infrastructure can take years.
BTQ combines existing transaction security with post quantum signatures rather than replacing the blockchain. Its system uses cryptography based on NIST post quantum standards while remaining compatible with existing blockchain infrastructure.
Kaia says the protection will operate at both the account and infrastructure level. Stablecoins are a practical starting point because they combine transferable value, digital wallets, long lived transaction records and growing use in payments and settlement. Kaia and Unifi already support stablecoins including USDT, Japan’s JPYC and Indonesia’s IDRP. BTQ says QSSN can protect those assets at the account level without requiring each issuer to build a separate integration.
The bigger commercial point is how BTQ gets paid. Rather than relying only on integration or licensing fees, the three year agreement gives BTQ a share of fees from protected transactions. If usage grows, security revenue grows with it. That turns QSSN from a technical capability into infrastructure with recurring transactional revenue.
Canada is already preparing for this migration problem. The Canadian Centre for Cyber Security requires federal organizations to start planning now, complete migration of high priority systems by the end of 2031 and move remaining systems by the end of 2035. Financial infrastructure faces the same issue across payments, identity, custody and digital assets, where systems may remain in service for many years.
Unifi Gives BTQ A Consumer Distribution Route
LINE NEXT launched Unifi as a global stablecoin wallet in March 2026, with deposits, transfers, payments and rewards available through LINE Messenger. That gives BTQ a path from blockchain infrastructure into consumer stablecoin use rather than another stand alone technology pilot.
For those who don't know, LINE is one of Asia’s largest messaging platforms, with major user bases in Japan, Taiwan and Thailand. LINE NEXT launched Unifi on Kaia in March 2026, giving BTQ a route from blockchain infrastructure into consumer stablecoin use through LINE Messenger.
See: Quantum Bridge Raises USD $8M For Quantum Security
BTQ and Kaia point to potential reach of more than 250 million people across the LINE and Kakao ecosystems. That is the size of the connected consumer networks, not 250 million Unifi or BTQ users. Unifi is expected to be among the first consumer applications to benefit as the Kaia deployment rolls out.
BTQ had already shown the technology working in earlier Korean pilots and reported more than 100,000 mainnet transactions in the second quarter. What was missing was recurring customer revenue. In August, BTQ was still discussing a possible production deployment with Kaia. Six weeks later, the parties signed a three year commercial agreement tied to transaction activity.
Talking Point
The question now is whether post quantum security can generate recurring infrastructure revenue before quantum risk becomes urgent. Transaction volume and recognized revenue will show whether that model works beyond pilots.
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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Anthropic IPO Reveals the $518B Cost of Frontier AI
September 29, 2026 | NCFA Insight | Artificial Intelligence And Data, Capital Markets And Market Infrastructure, Venture Funding And Building
Revenue grew 11x as compute commitments reached at least US$518B
On September 28, 2026, Reuters revealed new details from Anthropic's confidential IPO filing, showing 2025 revenue rose to about US$4.6 billion while compute and infrastructure costs reached US$7.33 billion. Anthropic has committed at least US$518 billion to cloud, compute and other AI infrastructure over roughly a decade.
Anthropic confidentially submitted its draft Form S-1 to the U.S. Securities and Exchange Commission on June 1. The filing isn't public yet, so the financial details come from journalists who reviewed the prospectus rather than an SEC document investors can inspect themselves. Anthropic also hasn't set the number of shares, IPO price or offering size yet.
The filing gives public market investors something private AI companies rarely provide. Anthropic's revenue is growing at extraordinary speed, but so are the costs and commitments needed to keep Claude running and improving. The question isn't simply whether demand for AI keeps rising. It is whether that demand can grow fast enough to absorb infrastructure contracted years before the customers arrive.
Anthropic Revenue Rose 11x As Compute Costs Tripled
Anthropic generated about US$400 million of revenue in 2024 and nearly US$4.6 billion in 2025, an increase of roughly 11.5 times in one year. Compute and infrastructure spending moved just as aggressively, rising to US$7.33 billion in 2025, about three times the prior year level. That one expense represented roughly 58% of Anthropic's US$12.65 billion of operating expenses and about 1.6 times annual revenue.
| 2025 metric | Amount | What it tells investors |
|---|---|---|
| Revenue | ~US$4.6B | About 11.5 times 2024 revenue |
| Compute and infrastructure | US$7.33B | About 159% of revenue and 58% of operating expenses |
| Operating loss | US$8.06B | Operating costs still exceeded the rapidly growing revenue base |
| Net loss | ~US$42B | Includes a large financing related accounting charge |
| Cash and short term investments | US$20.28B | Year end liquidity before later financing |
| Future infrastructure commitments | At least US$518B | Multi year cloud, compute and infrastructure contracts |
The US$42 billion net loss needs a bit of context. Roughly US$34 billion came from an accounting charge tied to financing instruments that can convert into Anthropic shares. That doesn't mean Anthropic spent US$42 billion in cash operating Claude. The operating number is US$8.06 billion loss generated after revenue and operating costs are compared.
Does that mean the economics are getting worse as Anthropic grows? The current 2026 numbers make that difficult to conclude. Preliminary second quarter revenue exceeded US$11.5 billion, up from US$4.73 billion in the first quarter, and Anthropic reported positive adjusted operating income for the quarter. Those aren't audited full year results, but they show how quickly the picture is changing.
Rapid revenue growth doesn't remove the infrastructure problem, and it makes securing enough compute more urgent.
Anthropic Has Committed At Least US$518B To Compute
Anthropic expects to spend at least US$518 billion over roughly a decade across six infrastructure partners. Reuters reports that about 80% of those commitments are noncancelable or require payment regardless of how much capacity Anthropic actually uses. The known agreements include at least US$111.1 billion with Google, US$110 billion with Amazon, US$31.4 billion with Microsoft and about US$161.2 billion of Broadcom related equipment lease obligations.
Is US$518 billion debt?
No. The figure combines different cloud, compute, equipment and infrastructure contracts spread across years. Some arrangements can also be cancelled. Anthropic's agreements with xAI, for example, could involve up to US$84.5 billion of Nvidia based capacity through 2029 but are largely cancelable with 90 days notice.
The less flexible contracts create the bigger financial issue. Anthropic is reserving enormous amounts of future capacity before it knows exactly how quickly model efficiency, compute prices, customer demand and competition will change. Its filing reportedly warns that access to compute could constrain growth before customer demand does. If Anthropic is right, securing capacity early protects revenue growth. If demand, pricing or technology changes faster than expected, fixed infrastructure commitments become much harder to absorb.
BGC's compute infrastructure markets are creating price discovery and risk management around compute and memory capacity. When capacity is scarce, expensive and contracted years ahead, compute becomes something Anthropic has to finance and manage like major infrastructure, not just pay for as a cloud service.
The supplier relationships are unusual too. Amazon and Google are major Anthropic investors as well as infrastructure providers, and their platforms help distribute Claude. Microsoft also supplies infrastructure while competing across AI. These relationships give Anthropic capital, compute and distribution, but they also make a small group of large technology companies important to several parts of the business at once.
Demand is also concentrated. Nearly one quarter of 2025 revenue came from two customers, while many larger customers are not locked into long term contracts. Anthropic therefore has substantial fixed commitments on the infrastructure side while parts of its customer base remain comparatively flexible. That mismatch deserves your attention.
A US$2T Anthropic IPO Would Price Growth Years Ahead
Reports that Anthropic may seek a valuation above US$2 trillion doesn't make the company worth US$2 trillion today. The firms last reported private valuation was about US$965 billion in May, so US$2 trillion remains a target until shares are actually priced.
Anthropic could also reach public markets before its closest frontier AI rival. OpenAI CEO Sam Altman said in September that OpenAI's public market timeline now extends beyond 2026, pushing any listing to at least 2027. Anthropic could therefore become the first major frontier model company to give public investors a direct look at the economics of building and operating AI at this scale.
See: Goldman Sachs Buys Québec AI Compute Platform QScale
Preliminary second quarter 2026 revenue exceeded US$11.5 billion, while Anthropic's annualized revenue run rate reportedly passed US$65 billion by the end of July. Investors will have to decide how much of that acceleration can persist and how much compute, capital and fixed infrastructure Anthropic must secure to support it.
Reuters reports that roughly 80 of the prospectus's 261 main pages cover risks, including the possibility that more capable AI could resist shutdown, conceal information, facilitate cyber or biological misuse and cause catastrophic harm.
Talking Point
Revenue can multiply in a year while infrastructure contracts extend for a decade. The market now has to decide whether that growth can remain fast and profitable enough to justify committing hundreds of billions of dollars to compute before future demand is known.
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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Hester Peirce’s SEC Legacy And A Decade Of Financial Change
October 2, 2026 | NCFA Story Intelligence | Regulation And Policy, Digital Assets Blockchain And Tokenization, Capital Formation And Venture Markets
Principled Regulation, Working Alternatives And Ideas That Endured
Hester M. Peirce is leaving the U.S. Securities and Exchange Commission after nearly nine years as a commissioner and almost two years leading its Crypto Task Force. In her resignation letter, Peirce set October 2 as her final day at the SEC.
NCFA reported her planned departure in May. That answered where she was going, but it didn't answer the more interesting question.
What did Hester Peirce actually change?
For years, Peirce's public record has stretched across SEC votes, speeches, crypto policy, capital formation, investor access and regulatory process. In 2021, she also spoke directly with Canada's fintech community at FFCON21.
The record is much richer than the "Crypto Mom" nickname.
Peirce argued consistently for rules people could understand and use, investor choice, public consultation, room for lawful experimentation and restraint when old regulatory structures met new technology. She also supported enforcement where laws applied and repeatedly returned to the importance of trustworthy markets.
She didn't prevail on every issue. Nor did every later policy change happen because of her. Courts changed outcomes. Congress acted. SEC leadership changed. Technology matured. Institutional investors entered markets they once avoided.
Peirce kept doing something that gave her ideas a longer life.
She put alternatives on the table.
By 2025, she had the chance to help build policy through the SEC Crypto Task Force. In 2026, SEC Chair Paul Atkins explicitly pointed back to her 2020 Token Safe Harbor as the Commission proposed Regulation Crypto Assets.
It is a story about a regulator who kept asking whether the rules still served investors, markets and innovation, and who spent years putting practical alternatives on the table when she believed they did not.
In 2016, fintech was still fighting for a regulatory home. The Office of the Comptroller of the Currency was developing a responsible innovation framework and debating whether fintech companies should qualify for special purpose national bank charters. The SEC was discussing blockchain, automated advice and online lending as new technologies pressing against established financial rules.1
Crypto was even further outside conventional finance. In 2017, the SEC's DAO Report established that some digital token transactions could fall under U.S. securities law. There were no U.S. spot bitcoin exchange traded products, no SEC Crypto Task Force and no tailored crypto offering regime. When Peirce joined the Commission in January 2018, many of today's basic regulatory questions were still wide open.2
Her first major crypto disagreement arrived within months. In July 2018, Peirce dissented from the SEC's rejection of the Winklevoss Bitcoin Trust. She argued that the exchange had met the relevant statutory standard and worried that denying access to a regulated product could push investors toward less regulated ways of getting bitcoin exposure.3
The majority had legitimate market integrity concerns. Bitcoin trading was fragmented and market surveillance was still developing. Fraud and manipulation mattered. Years later at FFCON21, Peirce herself described the exchange traded product review as highly data intensive, including questions about price formation, futures markets and oversight of spot venues. Her disagreement was narrower. She believed bitcoin products were being held to a different standard.
The Token Safe Harbor gave network builders a clock. Peirce proposed three years for qualifying token projects to develop toward functionality or decentralization while providing disclosures and remaining subject to antifraud rules. The proposal addressed a practical problem. A team might need to sell tokens to build a network, yet those same promises could make the sale look like an investment contract.4
She changed the proposal after people pushed back. Safe Harbor 2.0 added an exit report and other refinements in 2021. Peirce didn't pretend the ambiguity had disappeared. She continued asking for feedback and said the proposal needed enough detail to give market participants useful certainty.5
The SEC's enforcement strategy hardened the disagreement. Peirce accepted that securities laws applied when the facts brought an activity inside them. Her objection was practical. Telling firms to register didn't solve much when the existing registration structure didn't fit the activity. Her call for clearer crypto regulation was already part of the public debate, and in 2022 she described one company at a time enforcement discussions as "not a good way of regulating."
DeFi exposed the same disagreement in a more difficult form. The SEC argued that systems performing exchange functions could still require securities oversight. Peirce worried that expanding exchange rules could force decentralized software into structures designed around identifiable intermediaries. The fight over the SEC's proposed exchange definition made that tension explicit in 2023.
Spot bitcoin products finally cleared the SEC in January 2024. More than 20 spot bitcoin exchange filings had been rejected from 2018 through March 2023. The D.C. Circuit later found that the SEC had not adequately explained its treatment of Grayscale's application. The Commission approved multiple spot bitcoin products after the court sent the matter back.6
Peirce saw the approval as much later than it needed to be. Her reaction appeared in Peirce Laments, SEC 'Squandered A Decade'. Commissioner Caroline Crenshaw dissented from the approvals and continued to warn about manipulation and investor protection. The approval settled access to the product. It didn't settle the argument over crypto market risk.
Then the job changed. On January 21, 2025, Acting SEC Chair Mark Uyeda launched the Crypto Task Force and asked Peirce to lead it. The mandate included clearer regulatory boundaries, realistic registration options, disclosure frameworks, public engagement and coordination across government.7
Public engagement became part of the work. The Task Force held sessions on security status, trading, custody, tokenization and DeFi, then took meetings outside Washington to hear from smaller projects that had not always participated in SEC policymaking. At the April 2025 crypto custody roundtable, Peirce argued that custody rules needed to account for the technology without weakening investor protection. The discussion also brought self custody, broker dealer models and legal ownership into the same policy conversation.
Tokenization shows that her position is not simply deregulatory. In July 2025, Peirce said tokenized securities could help capital formation and collateral use, but tokenization did not erase securities law. Third party tokenization still had to avoid misleading investors or weakening investor protections.
DeFi gets a more structured compliance conversation too. At the June 2025 Crypto Task Force roundtable, SEC leadership considered conditional relief that would give developers room to experiment inside defined boundaries. A DeFi safe harbour brought the same tension Peirce had raised for years into a more formal policy discussion. Builders need a lawful route to experiment, while investors still need disclosure, accountability and usable protections.
Six years after Safe Harbor, the connection became explicit. On August 18, 2026, the SEC proposed Regulation Crypto Assets. The package includes tailored offering exemptions and a conditional safe harbor addressing when a crypto asset is no longer subject to an investment contract. Chair Paul Atkins specifically cited Peirce's 2020 Safe Harbor proposal.8
The proposal was bigger than Peirce. Commission divisions, legal staff, economists, accountants, trading specialists and the Crypto Task Force all contributed. Congress was also working on market structure legislation. Atkins said legislation remained important. Peirce herself credited teams across the Commission for building the proposal.9
September moved policy into live market experimentation. On September 17, the SEC granted temporary and conditional relief allowing limited trading of tokenized U.S. listed stocks through specified onchain venues. Symbol limits, volume caps, transparency, records, technology safeguards and trading stoppage coordination remain part of the structure.10
The Commission deliberately left room to learn. Peirce described the Innovation Exemption as a way for market participants to experiment while the SEC watched how onchain trading worked in practice. Commissioner Mark Uyeda specifically thanked the Crypto Task Force led by Peirce for its work on the exemption.11
Crypto never fully explained Peirce. At FFCON21 she spent a substantial part of the conversation on small business finance. She wanted finders to have a lawful role connecting smaller companies with investors. She questioned wealth as the main gate to accredited investor status and suggested that education or professional experience could demonstrate financial sophistication.
Her concern was who gets access to capital and markets. Peirce told NCFA's community that small businesses outside established wealthy networks could struggle to raise money. She floated a streamlined micro offering of roughly US$250,000 to US$500,000, still subject to antifraud rules, to help companies finance the space between personal networks and institutional capital.
Her working style showed up in the small details. Peirce gave speeches titles about fish behind wheels, empty gas tanks, headstands and haystacks. The metaphors made complicated regulation easier to remember, but the substance underneath them was usually specific. What authority did the SEC have? What problem was the rule trying to solve? Could people comply with it? What unintended cost could it create? Her "Is That A Fish Behind The Wheel?" remarks captured that style in 2022 while arguing that technology could help regulators meet investor protection, capital formation and market integrity goals.
She also left room for disagreement. In June 2026, as her time at the SEC was winding down, Peirce wrote that people could disagree about how capital markets should be regulated while still sharing an interest in markets that serve investors and companies. She also said a Commission seat should not be occupied by the same person for too long and that institutions needed fresh voices.12
Several large questions remain open as she leaves. Regulation Crypto Assets is still proposed. DeFi continues to challenge assumptions about intermediaries and control. Custody remains difficult. The Innovation Exemption is temporary. Congress still has an important role in crypto market structure.
Her final weeks look very different from her first ones. On September 23, speaking during what she calls her penultimate week as commissioner, Peirce discusses tokenized securities, financial privacy and the Innovation Exemption. The argument is no longer whether blockchain belongs anywhere near regulated securities markets. It is how those markets should operate when blockchain is already there.13
People who build companies know the difference between criticism and a usable alternative.
The first tells you what someone dislikes. The second gives you something to work on.
Peirce kept returning with alternatives.
The Token Safe Harbor is the clearest example. It didn't become an SEC rule when she proposed it. She listened to criticism, revised it and left it in the public record. Six years later, the SEC chair cited that work while introducing a formal Commission proposal built for a very different crypto market.
Her record also shows why persistence alone isn't enough. Courts changed outcomes. Elections changed leadership. Congress changed the policy environment. Technology improved. Institutional investors entered markets they once avoided.
What endured were the specific alternatives she left behind.
A minority view can preserve an argument. A detailed proposal can give future policymakers something concrete to reconsider. Public consultation can expose weaknesses before a rule is written. And changing your thinking, as Peirce acknowledged she had on parts of the Howey analysis, can improve the eventual debate.
Founders and industry advocates know this problem well. Complaining about a rule is easy. Designing an alternative that protects investors while giving a legitimate new business model room to work is much harder. Peirce repeatedly did that second piece of work.
Her years at the SEC also coincided with an extraordinary change in financial markets. Crypto moved from the regulatory margins into public markets. Tokenization moved from concept to live infrastructure. Questions about investor access, capital formation and technology neutral rules became part of mainstream securities policy.
At FFCON21 in 2021, Canada's fintech community heard Peirce discuss many of those questions while some of her most important ideas were still proposals. She spoke openly about where the Token Safe Harbor stood, where her own thinking had changed and why new technology should not automatically inherit rules written for a different market.
Five years later, some of those arguments are no longer theoretical.
In 2018, Peirce was arguing that investors should be able to access bitcoin through a regulated exchange traded product. In 2026, she is helping the SEC decide how tokenized U.S. stocks can trade onchain, how crypto assets can be offered under tailored rules and where experimentation can occur inside securities regulation.
That is a remarkable change in the market around her, and Peirce helped make sure some of its hardest regulatory questions were asked before the answers became obvious.
She will join Regent University School of Law as an Associate Professor in November. Regent says her work has focused on regulatory humility, capital markets, crypto regulation and the relationship between innovation and regulation.14
The classroom feels like a fitting next chapter. Peirce spent much of her SEC career asking people to explain their assumptions, defend the authority behind a rule and consider whether a different answer could protect investors while leaving room for markets to change. Students will now get the same invitation to think carefully, argue clearly and reconsider what they thought they knew.
NCFA is grateful that Commissioner Peirce took the time to engage directly with Canada's fintech community through FFCON21. Her public record also gave founders, investors, regulators, lawyers and critics something valuable over nearly nine years at the SEC: clear reasoning, practical alternatives and an explanation of how she reached them.
She leaves with important work unfinished, as every regulator does. She also leaves ideas that now form part of the SEC's policy conversation, work that bears her direct contribution and a record of taking financial innovation seriously while keeping investor protection in view.
We wish Hester Peirce every success at Regent. For Canadian regulators, her record leaves a useful challenge. When markets and technology change, protect investors rigorously, but keep asking whether the rules still fit and be willing to put better alternatives on the table. And we hope the next generation of lawyers gives her arguments the same rigorous challenge she spent years inviting from colleagues, markets and the public.
FAQs
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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Do Autonomous Financial Agents Need A Different AI Architecture?
September 25, 2026 | NCFA Fintech Intelligence Question | Artificial Intelligence And Data, Risk Compliance And Regtech, Payments Infrastructure And Money Movement
When An LLM Understands The Request, Should It Also Make The Decision?
Last Updated: September 25, 2026
Status: Emerging
Organizations: TypeSafe AI, International Monetary Fund, Monetary Authority of Singapore, Form3, GoCardless, OneVest, Questrade, Circle, Mastercard, Flybits, Rogers Bank
On September 15, 2026, TypeSafe AI introduced Jev, an AI model built to make structured decisions inside software rather than write free form answers for people. Instead of generating prose, it returns predefined choices with probabilities and confidence scores.
TypeSafe calls Jev a System One Model and argues that this approach is better suited to autonomous software. That's the company's thesis, not an established industry conclusion. TypeSafe produced the benchmarks but acknowledges limitations in its testing and says Jev can still make wrong decisions.
AI agents can already read brokerage accounts, prepare trades, open wealth accounts, hold digital money and make payments. Giving an agent access is one thing. Letting it decide what to do with someone's money carries a different level of responsibility.
Do autonomous financial agents need a different AI architecture?
As agents progress from answering questions to spending, trading and making decisions, an error can become an action before a person sees it. If one AI interprets the request, makes the judgment and initiates the transaction, several distinct financial controls can end up depending on the same model.
Some firms are already separating what an agent understands from what it is allowed to do and what ultimately gets executed. The unanswered part is whether financial judgment should also be separated from the general purpose language model.
A specialized decision model is one option. An LLM with constrained outputs, external permissions and conventional software making the final call is another. There isn't enough independent testing in regulated financial workflows to know which approach performs better.
NCFA has already tracked AI's growing compliance burden, agents entering governed financial workflows and consent and liability when AI makes payments. Those controls become more consequential once an agent can act on a financial decision rather than simply recommend one.
Strategic Takeaway
As financial agents gain authority to spend, trade and make decisions, model architecture becomes a control question. If the same AI interprets an instruction, makes the judgment and drives the action, one mistake can pass through several stages before anyone catches it. Separating those jobs may reduce that exposure. The harder question is which financial decisions firms should hand to AI in the first place.
As financial agents gain authority to spend, trade and make decisions, model architecture becomes a control question. If the same AI interprets an instruction, makes the judgment and drives the action, one mistake can pass through several stages before anyone catches it. Separating those jobs may reduce that exposure. The harder question is which financial decisions firms should hand to AI in the first place.
Market Evidence
Click each item to expand
1. Form3 Lets The Agent Look, But Not Pay September 23, 2026, United Kingdom ⓘ
Form3's Model Context Protocol adaptor gives authorized AI agents access to payment information through a controlled interface. Initial access is read only, and the agent stays outside the payment flow.
An agent can investigate a payment or help someone understand what happened without gaining the authority to send money. Form3 has separated access from execution at the infrastructure level.
2. OneVest Automates The Work Without Taking Over The Whole Decision September 23, 2026, Canada ⓘ
OneVest launched agentic account opening for Canadian wealth firms on September 23. Its agents coordinate onboarding across custodians, track progress and handle administrative work that normally moves between people and systems.
Advisors and operations teams remain in control, and the system preserves an audit trail. The launch doesn't indicate that the agent independently approves a client or makes the final suitability decision.
3. GoCardless Lets An Agent Complete The Payment September 22, 2026, United Kingdom ⓘ
GoCardless processed an AI driven account to account payment on September 22 through work developed in the FCA AI Live Testing programme.
The agent completed the transaction inside an AI conversation, but its authority came from an existing Direct Debit mandate. It could handle more of the transaction without receiving an open ended right to move money.
4. A Canadian Agent Has Already Shopped And Paid September 21, 2026, Canada ⓘ
Mastercard, Flybits and Rogers Bank announced a completed Canadian agentic commerce transaction on September 21.
A Rogers Red Mastercard holder gave the Flybits powered assistant instructions and a spending limit. The agent selected an eligible product and completed the purchase using Mastercard Agent Pay.
The AI chose and paid, but only inside authority the customer had already defined.
5. Jev Is Built To Make A Choice, Not Write An Answer September 15, 2026, United States ⓘ
TypeSafe describes Jev as its first System One Model. A developer defines the possible output types in advance. Jev returns a decision with probabilities and a measure of confidence rather than generating an unrestricted text response.
- TypeSafe is targeting decisions made inside software rather than human conversation.
- Its training method is called Reinforcement Learning for Calibrated Decisions.
- Confidence thresholds can be used to act, reject a result or send it for review.
- Predefined outputs constrain what the model can return. They don't stop it from making the wrong decision.
A response can therefore be perfectly formatted and still be wrong, an important distinction when the output can trigger a financial action.
6. Questrade Lets The Agent Prepare A Trade July 23, 2026, Canada ⓘ
Questrade's MCP connection lets approved AI agents work with brokerage account data and prepare orders when trading permission is enabled.
The customer still reviews the security, direction, order type, quantity, price, estimated cost and commission before submitting the trade. The agent can do much of the work without getting the final say.
7. Circle Gives Agents Money With Rules Attached May 11, 2026, Global ⓘ
Circle Agent Stack gives AI agents wallets that can hold and move USDC without asking a person to approve every transaction.
Developers can limit spending, restrict services, use allowlists and put time limits around an agent's authority. The agent may decide that it wants to pay, while the wallet determines whether that payment is permitted.
Policy Evidence
Click each item to expand
8. MAS Wants Controls Running While The Agent Acts July 3, 2026, Singapore ⓘ
The Monetary Authority of Singapore and industry participants published Safeguards for Agentic Finance at Runtime, or SAFR, on July 3.
SAFR examines controls that operate while an agent is active, including whether its actions comply with policy, whether a transaction can be stopped, what records are kept and whether controls work across different systems.
Those safeguards operate outside the model rather than depending on the agent to police itself.
9. Financial AI Is Becoming An Accountability Problem Too May 6, 2026, Global ⓘ
As financial agents gain access to accounts and transactions, governance extends beyond whether the model gives a good answer. Firms also need approved data, permissioned tools, review points, records, escalation and someone accountable when things go wrong.
Once an agent can act, the choice of which AI makes a financial decision becomes part of that control structure.
10. IMF Keeps The AI Away From Final Settlement April 22, 2026, Global ⓘ
An April IMF Note divides agentic payments into three parts: intent, authorization and settlement.
AI can interpret what someone wants and turn that request into instructions. A separate authorization layer checks mandates, permissions and regulatory requirements before the approved transaction reaches payment infrastructure for settlement.
The IMF doesn't argue that LLMs should be replaced. Its model separates probabilistic AI from some of the controls governing the transaction.
How Much Should One Model Be Trusted To Do?
There isn't one financial agent architecture yet. Form3 stops at information. Questrade lets an agent prepare a trade. OneVest automates much of an account opening. Circle lets agents spend within wallet rules. GoCardless and Mastercard take agents into live payments, but inside authority established before the transaction.
None of those examples establishes a need for specialized decision models. An LLM with strong permissions and conventional software controls may be enough for many jobs.
A fraud decision can be uncertain even when the permitted actions are tightly controlled. The available actions may be tightly defined even when the right answer isn't obvious: approve it, reject it, ask for more information or send it to a person. A model designed to choose among those outcomes and report its confidence could have a role between language interpretation and a hard software rule.
A model can perform well across thousands of decisions and still get one customer's transaction badly wrong. In credit, fraud, sanctions, trading or client money, the consequences of that one decision can matter more than the average benchmark.
Financial firms already separate customer instructions, risk decisions, permissions, execution and records. As AI enters governed financial workflows, firms have to decide which of those jobs AI should perform and which should remain outside its discretion.
What Would Make Specialized Models More Convincing?
Adoption by regulated firms would test TypeSafe's benchmarks against real credit, fraud, trading and payment decisions. Independent testing could then compare specialized models with LLM based agents and conventional systems, especially where a wrong decision can cost someone money.
Regulators may influence the architecture without choosing the model. Requirements that separate interpretation from authorization, limit an agent's authority or send uncertain decisions to a person could favour some designs over others. Those boundaries are already part of the debate around AI payment consent and liability.
LLMs may keep improving while structured outputs, wallet controls and policy engines handle the hard boundaries. Specialized models could prove valuable for particular financial decisions without becoming standard infrastructure. Understanding a customer's instruction is one job. Deciding whether their money should move can be another.
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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, 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 Agents Expose Weak Links in Financial Authorization
September 25, 2026 | NCFA Insight | Artificial Intelligence And Data, Risk Compliance And Regtech, Payments Infrastructure And Money Movement, Cybersecurity And Fraud
Agent Authority Across Connected Financial Systems
On September 24, 2026, Australian Prime Minister Anthony Albanese disclosed an unusual AI security incident during the 81st United Nations General Assembly in New York. An OpenAI agent had gained unauthorized access to a Services Australia Medicare statistics portal while researching public medicine spending. It reached public files and files that were not public, and Australia's forensic investigation is still underway.
The agent had been assigned a legitimate research task. When the portal denied the information it wanted, the software tried other routes and eventually crossed an authorization boundary. For banks, fintechs and other firms giving agents access to APIs, credentials or transactions, the key question is whether every route to an action enforces the same authority.
Australia's AI Agent Found Another Route
The June 18 incident touched four Australian public websites. The government said interactions with the Australian Institute of Health and Welfare, the Victorian Department of Health and the NSW Bureau of Crime Statistics and Research were normal. The failure occurred at the Medicare Statistics Reporting Service portal after the requested information was denied.
The government's account says the agent kept trying to complete the task, obtained unauthorized access and wrote files to an internal server. Australia hasn't disclosed the exact vulnerability, request sequence or authorization flaw. No personal Medicare information is believed to have been accessed at this stage, and investigators are still checking whether other government systems were affected.
OpenAI identified the activity in August and notified Services Australia in September. Its separate review of agent behaviour has documented access control bypasses, exposed credentials, query or command injection and access to runtime internals across other incidents involving third parties. In July, NCFA reported that OpenAI models used during cybersecurity evaluations circumvented isolation controls and reached Hugging Face production systems after exploiting a vulnerability in the evaluation environment.
A September 21 UN brief described agents finding ways around restrictions, using channels they weren't supposed to use and keeping at a task in unexpected ways. That doesn't mean every agent will hunt for a weak point. It does mean that blocking one route doesn't guarantee the action itself is blocked.
Permissions Need To Follow The Action
Security teams already have language for much of this problem. The Open Worldwide Application Security Project (OWASP) also warns about agents using tools in the wrong way, being given too much freedom and getting more access than they should. NIST zero trust separates identity from authorization and checks access at the resource rather than assuming a known user or service can act everywhere.
The data support that caution. A NeurIPS 2025 red team competition collected 1.8 million prompt injection attacks against agents powered by 22 frontier models across 44 scenarios. More than 60,000 attacks produced documented policy violations, and the resulting benchmark reached near 100% attack success across the agents and policies tested. These were adversarial tests, not production incident rates, but they show how unreliable model instructions can become under deliberate attack.
Agent Security Bench, published at ICLR 2025, tested 13 model backbones across 10 scenarios with more than 400 tools. Its highest average attack success rate was 84.3%. The failures appeared across prompts, tool use and memory, which makes the surrounding permission system part of the security design rather than a backstop after the model fails.
Knowing which agent is calling an API is only the first check. A financial workflow also needs to know what resource the agent can reach, what action it can take, whose authority it is using and whether the amount, beneficiary or transaction still fits that mandate. Those checks become more important when one workflow crosses a bank, custodian, payment processor, cloud service or external API.
See AI Agents Gain Identity and Wallet Access WCGW
A strong control at one interface won't protect a weaker route elsewhere. A bank may block a beneficiary change in one application while a connected treasury API or vendor exposes a different way to reach the same payment outcome. Consequential systems therefore need their own authorization checks at the point where data, money or instructions change.
Financial Agents Can Already Spend And Submit
Canadian deployments are already giving agents authority inside real financial workflows. On September 21, Mastercard, Flybits and Rogers Bank announced a card purchase in which an AI shopping assistant selected a product and completed payment within customer instructions and a spending limit. Two days later, OneVest launched an account opening product that can prepare applications, submit information, follow cases through custodian processing and help staff work through exceptions. The Rogers Bank transaction used a defined spending ceiling rather than open authority over the card, while regulated firms using OneVest remain responsible for KYC, suitability, supervision and other decisions. Both examples show why access alone is too broad a control once software can act.
Finance also leaves less room to correct a mistake after the fact. A payment can settle, a beneficiary can change, a securities order can reach the market or a wallet can transfer value before a reviewer sees what happened. Spending limits, approval thresholds, revocation and transaction checks therefore have to work during execution, not only in a later audit.
Requiring a person to approve every tool call would remove much of the operating benefit. The more practical model is graduated authority. Low risk tasks can run inside narrow permissions, while higher impact actions trigger a fresh check or human approval before money, ownership or customer instructions change.
Canada Is Defining Agent Identity And Permissions
Canadian guidance is becoming more specific. The Canadian Centre for Cyber Security's agentic AI guidance recommends a distinct identity for each agent, narrow permissions, temporary credentials, controls around tool use and human checkpoints for higher risk activity. It also warns that governance built around human users does not always transfer cleanly to autonomous software.
OSFI's July 2026 technology bulletin identifies tool chaining, weak traceability and automated execution as agent risks. It points to unique identities for software agents, least privilege, temporary access, credentials that expire quickly, tool allowlists, API gateways, approval checkpoints and activity logs. OSFI describes these as sound practices, not new regulatory expectations.
Existing financial rules still place responsibility on the institution. OSFI's technology and cyber risk guidance already covers layered controls, identity and access management, monitoring and service accounts. Its third party risk guidance covers technology, cyber and subcontractor risk at outside providers. Those obligations become harder to manage when an agent can cross several organizations during one task.
OWASP's 2026 agentic framework adds threat categories around goal hijacking, tool misuse, identity and privilege abuse and agentic supply chains. ISO/IEC 42001 provides an organization wide AI management system. These frameworks provide many of the pieces, but connected workflows still need each consequential system to enforce the authority attached to the task and transaction.
Talking Point
The Australian incident shows what changes when software can keep working after one route is blocked. In financial services, agent identity is only the start. Authority has to hold across the credential, tool, API, third party and final transaction, even when the agent finds another way to continue the task.
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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Where Canada’s SME Financing Process Still Breaks
September 22, 2026 | NCFA Story Intelligence | SME Finance And Business Banking, Open Banking And Open Finance, Capital Formation, Competition And Market Structure
Why High Approval Rates Still Hide SME Financing Friction
On September 17, 2026, the UK regulator went looking for evidence that its own rules were blocking small business finance.
It didn't find much.
Instead, the FCA SME finance review found problems scattered across the financing process. Some small firms don't know which product fits. Applications can be repetitive. Valuable businesses can own little conventional collateral. A lender can say no for reasons that have more to do with its own risk appetite than the health of the company. And after a decline, the entrepreneur may be left wondering where to go next.
Canada looks different at first glance.
Small business debt approval reached 97% in 2025.
That is a strong number. But approval is only one part of the financing process.
Why is the Competition Bureau reviewing SME lending, why did 76% of borrowers still have to pledge collateral, and why are specialist lenders building financing products around needs that conventional credit doesn't always serve?
The problem may not be a simple shortage of money.
It may be what happens between a viable SME and the right capital at the right stage of its life.
The UK expected to find regulatory barriers. The FCA concluded that its regulation was not a major obstacle to SME finance. What surfaced instead were problems with finance readiness, market navigation, risk assessment, repeated customer checks, product availability, alternative lending and personal guarantees. SMEs account for 60% of UK private sector employment, yet only 21% of the value of UK business loans goes to them.
Canada starts from a much stronger approval number, but fewer firms enter the debt market. ISED's 2025 Credit Conditions Survey found that 20% of small businesses requested debt and 97% received full or partial approval. Ninety seven per cent of requested dollars were authorized. The average amount approved was C$140,148 and the average interest rate fell to 5.8%. In the UK, around 50% of smaller businesses used external finance in Q3 2025, while challenger and specialist banks supplied 60% of gross SME bank lending. The measures aren't directly comparable because the UK figure includes credit cards, overdrafts, leasing and other products. Still, the UK data show SMEs using a wider range of external finance, alongside a market where challenger and specialist banks now provide 60% of gross SME bank lending. That makes Canada's 20% debt request rate worth looking at more closely.
The loan gets smaller. Much of the work doesn't. A lender still has to identify the customer, understand the business, assess risk, collect financial information, document the facility and service the account. The FCA found that high underwriting and customer support costs can make smaller or more complicated loans commercially unattractive. Bank of England research cited in the review found that operating and impairment costs mattered more than capital requirements in explaining weaker returns on SME lending.
Smaller firms can end up trying to fit products built for someone else. A bank can justify the time needed to structure a large commercial facility. The economics get harder when the business needs C$50,000 or C$100,000 and wants an answer quickly. David Gens, Founder and CEO of Merchant Growth, described that mismatch in a recent NCFA Fintech Fridays conversation. Merchant Growth has since funded more than 15,000 Canadian small businesses and deployed over C$1.5 billion, building around smaller financing needs and current business performance.
Collateral still carries enormous weight. In 2025, 76% of Canadian small business borrowers had to pledge collateral. The requirement reached 93% for long term debt. Buildings, machinery, inventory and receivables give lenders assets they can value and potentially recover if the borrower fails.
A fintech can become more valuable without owning much more that a lender can seize. Revenue rises. Customers renew. Software improves. Proprietary technology becomes harder to replicate. Yet BDC notes that patents and intellectual property can be harder for banks to value, making financing more difficult for businesses such as SaaS, ecommerce, cleantech and media companies.1
Canada has already decided to share some of that lending risk. The Canada Small Business Financing Program supported 6,409 loans worth almost C$1.9 billion in 2024 to 2025. Startups and businesses operating for less than one year received C$1.4 billion, or 74.1% of the total.
Follow the money and the old lending logic is still visible. Leasehold improvements accounted for C$1.2 billion and equipment another C$350.9 million. Working capital and intangible asset loans together represented only C$51.5 million, or 2.7% of program lending.
Revenue gives the lender something else to watch. BDC now says technology financing can take recurring revenue such as ARR and MRR into account. Predictable subscription revenue can help demonstrate repayment capacity even when profitability is still developing.2
The public guarantee can follow the loan through someone else's front door. BDC's Business Accelerator Loan Program supports working capital facilities between C$25,000 and C$500,000. The participating financial institution originates and manages the loan while BDC guarantees it.
The UK is trying to make business information do more work. The FCA sees open finance as a way to give lenders more complete and timely information, reduce duplicated applications and improve decisions. SME lending is one of the UK's first priority open finance use cases. The FCA plans to publish options for its first open finance scheme in early 2027.
Canada sees the same lending opportunity in consumer driven banking. Budget 2025 says the framework can reduce administrative work for SMEs, connect banking information with accounting, tax and payroll tools, support faster loan decisions and provide access to new forms of financing.3
Then comes the moment a lender says no. The FCA heard that some SME borrowers receive limited explanations for a decline. That can be particularly frustrating when the problem is lender specific. A bank may simply have little appetite for the sector, ticket size or type of risk. The business itself may still fit another provider perfectly well.
Canada can still leave the borrower back at the original door. Under BDC's Business Accelerator Loan Program, the participating institution manages the credit decision. If the borrower is declined, BDC says it has no visibility into the reason and directs the entrepreneur back to the financial institution for more information.
Canada is now looking closely at competition in SME lending. The Competition Bureau is reviewing SME loan competition in Canada, including lender entry, expansion and switching. The Bureau says Canada's market is dominated by large banks, smaller lenders appear to face barriers, comparing offers can be difficult and the borrowing cost gap between SMEs and large firms is wider than in many OECD countries.8
Meanwhile, Canada is adding capital further up the financing ladder. Budget 2025 committed C$1 billion to a new Venture and Growth Capital Catalyst Initiative and another C$750 million toward businesses facing early growth funding gaps.4
Manufacturers are already showing why timing matters. Only 87% of manufacturing applicants were approved for debt in ISED's 2025 survey, compared with 97% across small businesses overall. Now tariff pressure is hitting the same sector. Statistics Canada reported that 49.7% of manufacturers expected U.S. tariffs to hurt their business over the next 12 months, compared with 32.2% of Canadian businesses overall.5
Ottawa is responding with liquidity because the pressure arrives in cash flow first. The latest federal package adds C$1.5 billion to the Regional Tariff Response Initiative, a new C$500 million BDC liquidity stream for immediate cash flow pressure and another C$2 billion through the Canada Strong Diversification Fund.6
The UK is fixing friction inside the financing process. Its response includes better finance navigation, reform of referral after a declined application, better commercial credit data, digital verification, Consumer Credit Act reform and open finance focused directly on SME lending.
Canada is building capacity from several directions. Public guarantees support smaller loans. BDC lends directly and through partner institutions. Consumer driven banking can improve underwriting. The Competition Bureau is looking at lender competition. Ottawa is adding venture and growth capital. Tariff programs are supplying emergency liquidity.
Canada's SME finance numbers don't describe a credit desert. A 97% approval rate makes that clear.
A small business can have customers, revenue and a good reason to borrow and still be the wrong size for a lender's economics. A fintech can build valuable intellectual property faster than it builds conventional collateral. A manufacturer can suddenly need working capital because tariffs change its cash cycle. And a company that grows from C$25,000 of financing to C$250,000 can find itself proving the same business all over again.
Canada is already working on many of these problems. That's important. The opportunity isn't to replace banks, BDC or existing programs with one new solution.
It's to make the financing relationship itself work better as the SME changes.
Current business data can lower underwriting cost. Public guarantees can make smaller loans practical. Intellectual property can become easier to finance when valuation and recovery evidence improves. Consumer driven banking can help verified information travel. Specialist lenders can serve needs that large institutions aren't structured around. Growth equity can take over when debt stops being the right answer.
Put those pieces together and the financing process starts looking like a relationship that grows with the company (not disconnected and fragmented).
And for someone's sake, SMEs shouldn't have to become the wrong kind of business just to fit the available loan.
Talking Point
If a Canadian SME keeps proving itself through stronger revenue, better cash flow, customers and intellectual property, why should its financing relationship have to start over every time the business reaches a new stage?
FAQs
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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