Karsten Wenzlaff, Advisor
August 26th, 2025
October 9, 2026 | Insight, Lending Consumer Credit And BNPL, Artificial Intelligence And Data, Open Banking And Consumer Driven Finance, Competition And Market Structure

On October 6, 2026, U.S. fintech Plaid expanded its AI credit scoring products with LendScore 2, claiming 42% greater predictive power than traditional credit data alone. The announcement puts Plaid into closer competition with credit bureaus such as Equifax and TransUnion. It also creates an opportunity for lenders to assess borrowers using more detailed financial information and potentially offer financing that conventional credit scores and standardized loan products don't adequately support.
Someone with little credit history may have steady income and manageable expenses. A growing business may generate substantial annual revenue but receive payments irregularly. Neither fits neatly into conventional lending assessments. Better access to verified transaction data could help lenders make more informed credit decisions and develop products for borrowers who have traditionally been difficult to serve. The commercial benefits are promising, but greater scrutiny of personal and business finances also raises questions about affordability, privacy and fair treatment.
Plaid built its business connecting financial accounts to digital services. Its expanded LendScore products now turn banking transactions and network information into predictive credit assessments. LendScore 2 includes specialized models for automotive, home and short term lending. LendScore Arc uses AI to examine transaction sequences, timing and relationships, while Instant Link lets returning consumers authorize access to financial information without repeatedly reconnecting their bank accounts.
Plaid reports that its automotive model reduced delinquency by 26% among deep subprime applicants at the same approval rate. Its home lending model reportedly supported 6.3% more approvals at comparable risk, while its short term lending model supported 63% more approvals under the company's testing conditions. These results involve different products, borrower populations and performance measures. The headline 42% gain measures predictive performance, not an equivalent increase in approvals or reduction in defaults.
Established credit bureaus are responding to similar demands. Equifax Cashflow Insights incorporates permissioned bank transaction information into credit assessment, while TransUnion TruVision offers a wider range of risk analytics using traditional and alternative information. Bureaus still maintain credit histories, furnish reports and support correction processes. Plaid supplies its new scores through a U.S. consumer reporting agency, bringing it into the regulated credit reporting market rather than replacing that market.
| Provider | Established Role | Growing Opportunity |
|---|---|---|
| Credit bureaus | Credit histories, reports, scores and verification | Combine established records with transaction data and advanced analytics |
| Financial data platforms | Account connectivity and authorized financial data access | Provide predictive scores and credit intelligence to lenders |
| Banks and fintech lenders | Underwriting, pricing, financing and servicing | Combine purchased scores with proprietary models and customized credit products |
Large lenders can combine their own customer and repayment information with external models. Smaller lenders may find it more economical to purchase specialist scoring services. Both remain responsible for their lending decisions, including model oversight and regulatory compliance. As NCFA's analysis of open banking decision intelligence explains, financial data becomes more commercially valuable when institutions can turn it into reliable decisions. Credit scoring is one market where that competition is already underway.
In an NCFA Fintech Fridays episode 66 interview clip, Merchant Growth founder and CEO David Gens describes a persistent financing problem for Canadian small businesses. Large companies have finance teams and sufficient borrowing scale to negotiate customized arrangements. Smaller companies usually don't. Banks also have less room to spend time structuring individual transactions when the loan amount is modest. As a result, businesses with limited physical assets but meaningful cash flow can find themselves offered financing that doesn't fit their operations.
Merchant Growth provides an operating example of how lenders can respond. In the full Fintech Fridays EP66 'What it takes to build $1.5 billion in small business lending', Gens explains how the company's proprietary Merchant Score combines personal credit information, application details and business banking transactions to assess repayment capacity. Merchant Growth offers different forms of financing, including term loans, revolving credit and revenue based arrangements. Its approach demonstrates that more detailed underwriting and flexible financing existed well before Plaid's latest products.
The next opportunity is to make this level of assessment economical for more lenders and smaller financing amounts. Better information and automated analysis could reduce the manual work needed to evaluate irregular revenue, recurring expenses, customer payments and changing financial conditions. That could support more appropriate loan amounts, repayment schedules and product choices. Canadian SME financing gaps explains why business characteristics, collateral requirements and financing economics continue to leave viable companies underserved.
A FinRegLab study of more than 38,000 small business loans found that cash flow information improved credit risk predictions, with particularly useful results for younger and financially constrained businesses. Separate consumer underwriting research found that combining bank transaction records, conventional credit information and machine learning could improve risk assessment and support additional approvals at comparable risk levels. These findings support alternative underwriting, although they don't establish the performance of Plaid's new models or prove that every borrower benefits.
Richer data also creates opportunities beyond adjusting conventional loan terms. Some financing structures already exist, but more automated assessment could make them practical for smaller borrowers or more specialized needs. The following are potential applications, not products announced by Plaid.
| Borrower Need | Potential Financing | Role of Better Data |
|---|---|---|
| Limited credit history | Starter credit with graduated limits | Verified income and payment behaviour provide additional evidence of repayment capacity |
| Irregular personal income | Income responsive loans | Payments could adjust within agreed limits as verified earnings change |
| Lumpy business revenue | Contract or receivables financing | Customer payment histories and invoices help assess expected collections |
| Seasonal business activity | Adaptive working capital | Borrowing capacity and repayment schedules could reflect established sales cycles |
| Early business growth | Milestone based financing | Funding could be released as verified operating targets are achieved |
These products would still need funding, reliable forecasts, appropriate pricing and ongoing risk management. A lender could understand a seasonal business perfectly and still face losses if the expected revenue doesn't arrive. Some borrowers may also be better served by equity investment or another form of financing rather than additional debt. The commercial opportunity lies in offering suitable products at a cost that works for borrowers and lenders, while keeping human judgment available when a business doesn't fit the model.
Better credit data gives lenders more ways to identify a good borrower, but it also gives them more information to use when pricing a loan. Someone with irregular income could qualify for financing that a conventional credit score might have ruled out. That same transaction history could reveal periods of financial stress and lead to a higher rate, smaller credit limit or outright rejection. The lender gains greater pricing power unless competition, transparency and effective consumer protections keep pace. Plaid says LendScore Arc provides standardized explanations for its predictions, although its public materials don't establish that specific spending categories are penalized.
For lenders, the real commercial opportunity is to offer credit that reflects a customer's ability to repay without increasing losses. A seasonal repayment schedule might make financing viable for a business that struggles with fixed monthly payments. But a highly personalized offer could also leave customers paying more simply because the lender knows they have few alternatives. Better risk prediction doesn't automatically translate into better borrowing terms. Lenders need to demonstrate that new products improve affordability, repayment performance and customer retention. Borrowers need a practical way to understand and challenge the information behind their offers.
Canada's emerging consumer driven banking regulations could eventually make transaction information easier to share with competing lenders. Implementation remains underway, and Plaid hasn't confirmed that its latest LendScore products are available in Canada. The framework also draws an important commercial boundary. Consumers can authorize the sharing of eligible financial records, but derived data such as credit ratings and spending classifications is excluded from mandatory sharing. The underlying information may become more portable while the intelligence built from it remains proprietary.
That creates an opening for fintechs developing scoring models, underwriting systems and specialized credit products. It also protects a potential source of competitive advantage for incumbents that already hold extensive customer and repayment data. Smaller lenders may gain access to sophisticated analytics without building everything themselves, but they'll still need to control model costs, credit losses and servicing expenses. Firms that can demonstrate better loan performance and reach underserved customers economically will have a stronger business case than those selling another AI scoring tool.
NCFA's earlier analysis of underserved financial consumers identified how different income patterns, financial pressures and levels of trust create distinct product needs. More detailed credit intelligence could help address some of those gaps, provided it leads to financing customers can manage. The opportunity for Canadian fintechs is to compete on better credit products, not simply gather more information about borrowers.
Canada's small business lending experience shows that access to credit and financing fit are different problems. Better data can help address both, provided lenders can develop products that borrowers can afford and operate them profitably. Will competition in AI credit scoring produce better financing options for underserved borrowers, or mainly give lenders more ways to measure risk and price credit?
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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October 8, 2026 | NCFA Insight | Artificial Intelligence And Data, Risk Compliance And Regtech, Cybersecurity And Fraud

On October 8, 2026, the Office of the Superintendent of Financial Institutions warned that a small number of companies now dominate frontier AI models and the cloud infrastructure used by Canadian financial institutions, raising the risk of shared technology failures across the financial system. If one critical provider suffers an outage, cyber incident or operating failure, several financial institutions could be affected at the same time. OSFI also says institutions may struggle to maintain a clear view of AI use, vulnerabilities and controls at critical technology providers as adoption expands.
Canadian financial firms are advancing on AI swiftly. The Bank of Canada's 2026 Financial System Survey found that nearly all 54 respondents use AI, with planned expansion into investment management, financial crime prevention, customer service and operating workflows. Respondents themselves raised concentration among a small number of AI and cloud providers and the risk of shared mistakes when firms use similar models. OSFI now says it will assess common dependencies on critical service providers and their effects across the financial system. Canada can supervise how individual firms manage vendors, but it also needs to know when several institutions ultimately depend on the same model, cloud, API or software supplier.
OSFI hasn't introduced new AI rules. Its April frontier AI bulletin already warned that advanced models can find and chain software vulnerabilities at machine speed. Its July guidance on generative and agentic AI went further, including controls around agent identity, permissions, approvals and auditability. Those risks become more consequential as financial AI agents gain more authority inside regulated systems. The October update raises these concerns inside OSFI's formal risk outlook and puts more weight on what happens when the same suppliers support multiple institutions.
| Issue | Already known | What changed October 8 | Why it matters |
|---|---|---|---|
| AI cyber capability | OSFI had already warned that frontier models can speed up vulnerability discovery and attacks. | Frontier AI now receives focused treatment in OSFI's formal risk outlook. | AI moves closer to regular prudential supervision rather than remaining a specialist technology issue. |
| Shared providers | Existing guidance already covered third party concentration and AI dependencies. | Directly links concentrated frontier model and cloud providers with disruptions that can affect several institutions. | A supplier failure can become a financial system problem rather than stay inside one firm. |
| Foreign technology dependence | Third party and operating risk rules already covered outside technology providers. | OSFI now highlights growing dependence on technology services outside Canada. | Foreign policy, technology restrictions or geopolitical events can affect access to services Canadian firms rely on. |
| Common financial system exposure | The Bank of Canada and international regulators had already raised concentration concerns. | OSFI says it will assess common dependencies on critical service providers and their wider effects. | Regulators need to understand connections across firms, not only risk inside each institution. |
| AI adoption | Financial institutions were already expanding AI use. | Warns that moving too slowly can also weaken competitiveness and resilience. | Risk management cannot simply mean slowing AI deployment. |
OSFI is asking institutions to go faster and become more careful at the same time. Frontier AI can improve productivity, cyber defence and vulnerability detection, but governance, testing and controls have to keep pace. The Bank of Canada survey shows how quickly that tension is becoming operational. Nearly all respondents already use AI, 58% report difficulty integrating it into existing infrastructure and workflows, 56% cite talent constraints, and many expect to expand use over the next two years.
A bank may know which technology company it hired without seeing every dependency underneath that supplier. A fintech might use software that calls another company's model through an API while both services ultimately run on the same cloud infrastructure. Two vendors that look separate on a procurement list can still fail together. OSFI's July guidance reflects that problem by telling institutions to map internal and external AI dependencies, test failure scenarios, assess whether AI services can be moved or replaced and require suppliers to disclose whether they use AI to deliver services.
No public Canadian source currently shows which frontier models, cloud providers, APIs and supporting services are shared across regulated financial firms. That doesn't mean OSFI or the institutions have no visibility. It means the public evidence doesn't show a complete view across the system, while OSFI itself says firms may find it difficult to understand AI use and controls at critical third parties. The Financial Stability Board reached a similar conclusion internationally. Its AI monitoring framework focuses specifically on third party dependencies, provider concentration and the data gaps that make those risks harder to track.
The Bank of England's July Financial Stability Report says frontier AI could increase the risk of several firms or technology suppliers being disrupted at once and is being incorporated into financial sector cyber and operating tests. Its scenarios consider simultaneous disruption across firms, common technology supply chains and whether suppliers could support all affected clients at the same time. Canada has identified many of the same risks, but OSFI's October update shows that mapping and assessing common dependencies is still part of the work ahead.
Financial institutions need better ways to see which models, clouds, APIs, datasets and agents support critical workflows, where suppliers overlap and whether a service can actually be replaced during an outage. They will also need clear records showing which AI system acted, what access it had, which data it used and who approved important actions. AI agents inside payment flows already make identity, permissions, approval limits and audit trails practical operating requirements rather than abstract governance concerns.
The commercial regtech opportunity is beyond generic AI compliance software. Banks, insurers and fintechs may need live dependency maps, supplier overlap monitoring, model switching tools, agent access controls, failure testing and records that can be reviewed by boards and regulators. The recent Agentic Regulator projects show builders already working on agent identity, auditability, market monitoring and automated supervisory tools. Smaller institutions may need these tools most because they depend more heavily on outside AI providers and have less capacity to build comparable controls themselves.
Simply adding more vendors won't solve the problem if those vendors rely on the same models or cloud infrastructure underneath. Better visibility, tested alternatives and clear permission controls may be more important than the number of contracts an institution signs. As AI moves closer to financial decisions, companies that can safely connect data, models and automated actions will gain an operating advantage. The tools that make those connections visible and controllable may become just as important as the models themselves.
OSFI's October warning is really about the infrastructure underneath financial AI. Canadian institutions are adopting more capable models while relying on a technology supply chain that is concentrated, layered and often outside Canada. The next supervisory challenge is knowing when many firms depend on the same underlying technology before an outage, cyber attack or model failure reveals the connection. That also creates a clear opening for Canadian fintech and RegTech companies that can map AI dependencies, test alternatives, control autonomous agents and produce reliable records of what those systems do.
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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October 7, 2026 | NCFA Market Activity | Wealthtech, Private Markets, Institutional Capital, Canada

On October 5, 2026, the Financial Times reported that La Caisse tightened its control over FNZ, a global wealth technology platform serving banks, wealth managers and investment firms, after another management change. La Caisse, the Quebec based global investment group formerly known as CDPQ, is FNZ's largest investor. FNZ appointed Stephen Welch Executive Group Chair and interim CEO in September after Blythe Masters left the chief executive role.
La Caisse has backed FNZ since 2018. CPP Investments, which manages the Canada Pension Plan Fund, committed US$1.1 billion in 2022 when FNZ was valued above US$20 billion. Since August 2024, FNZ has raised another US$2.6 billion from existing shareholders while restructuring operations, refinancing debt and changing senior leadership.
Scale isn't FNZ's problem. The company reports US$2.5 trillion of assets on platform and more than 30 million end customers. Its technology supports hundreds of financial institutions across account administration, investment operations, transaction processing and client servicing. The issue is profitability. FNZ now has to show that its scale can generate enough cash to support the business without repeated shareholder funding.
CPP Investments and Motive Partners committed US$1.4 billion to FNZ in February 2022, valuing the company at more than US$20 billion. CPP Investments supplied US$1.1 billion. FNZ then administered more than US$1.5 trillion for over 20 million customers. Four years earlier, La Caisse, then CDPQ, and Generation Investment Management acquired existing FNZ stakes in a transaction valuing the company at £1.65 billion.
FNZ has required substantial additional capital since the 2022 financing. Existing shareholders committed US$1 billion in August 2024, US$500 million in April 2025, US$650 million in November 2025 and US$450 million on September 1, 2026. FNZ also refinanced US$2.1 billion of debt in late 2024.
None of those financings establishes a lower current valuation. Private financings can alter who receives value through preference shares, warrants and other contractual rights without producing a new market price for every existing share.
Employee shareholders are challenging part of that capital structure in New Zealand, where FNZ was founded. Their US$4.6 billion claim alleges that preference shares and warrants issued during the 2024 and 2025 financings unfairly diluted employee holdings and transferred value toward institutional shareholders. FNZ says the claim is entirely without merit and that its directors acted in the company's best interests. The allegations haven't been proven.
The dispute highlights why private market valuation transparency matters once financing structures become more complicated. A financing price shows what an investor paid for a particular security at a particular time. It does not automatically tell an employee, founder or earlier investor what their position is worth after subsequent rounds add new rights and preferences.
FNZ's board currently includes three La Caisse representatives: Denis A. Turcotte, Jean Étienne Leroux and Justin Shaw. Motive Partners and Generation Investment Management also hold board seats. FNZ says Stephen Welch's appointment is intended to improve client delivery and support long term profitable growth. The Financial Times reported that investor frustration had increased, Blythe Masters was asked to step down and La Caisse became more involved in the turnaround. La Caisse has not publicly confirmed those details.
FNZ remains deeply embedded in its clients' operations. Its technology supports wealth administration, transaction processing and client servicing. Replacing it can involve long implementations, data migration, regulatory work and operational risk. FirstCape selected FNZ in 2025 to consolidate the JBWere New Zealand wealth platform and custody operation, then expanded the relationship in 2026. Several FNZ clients also joined the company's November 2025 financing.
That customer base gives shareholders a reason to keep repairing the business. It does not fix the financial performance.
The Financial Times reported an approximately US$1.4 billion pretax loss for 2025. Customization costs, acquisitions and operating expenses contributed to the loss. FNZ has sold non core businesses, cut costs and focused more closely on wealth technology for large financial institutions. FNZ UK also completed its FCA Section 166 review in 2025 after improving governance, delivery, risk management and operating controls. FNZ is reportedly targeting positive cash flow in late 2027. Until then, it still has to prove that its large customer base and infrastructure can generate enough cash to support the business without more shareholder funding.
La Caisse and CPP Investments invested at different stages, but both now have substantial capital tied to FNZ's recovery. That gives them more than a financial interest. They also have to make decisions about funding, board oversight, management and restructuring when results fall short. FNZ is too large and too international for this to be reduced to whether Canadian pension money should have stayed in Canada. The issue is whether Canadian institutional investors can manage difficult global technology investments after the original growth case weakens.
Canadian fintech capital concentration is putting more money behind fewer companies with stronger evidence of scale and execution. Larger investments can produce larger gains, but they also make operating mistakes more expensive. Wealthsimple's institutional financing shows the growth side of that model. FNZ shows what happens when investors are already committed and the business still needs fixing.
For fintech founders and operators, FNZ is a reminder that scale, customer dependence and high private valuations do not remove the need for sound economics. Complex enterprise delivery, repeated customization and acquisition growth can create costs that are difficult to unwind later. Once outside investors have committed large amounts of capital, weak financial performance can also bring more board oversight, management changes and tighter control over strategy.
FNZ shows what private capital ownership looks like after the easy financing story ends. La Caisse and FNZ's other shareholders have already supplied billions of dollars of additional capital. They are now relying on board influence, management changes, asset sales, cost controls and a narrower operating focus to improve the economics of a platform used by millions of investors.
Information notice: This article is for informational purposes only and does not constitute investment, legal or financial advice. Allegations in the FNZ employee shareholder litigation remain unresolved and have not been proven.
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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October 6, 2026 | Regulation And Policy, Banking And Credit, Financial Crime And Compliance, Cybersecurity And Operational Resilience, Digital Assets Blockchain And Tokenization, Payments And Money Movement

On August 20, 2026, Toronto Centre published the podcast episode The Landscape of Financial Supervision and Security, featuring Tom Keatinge, Founding Director of the Centre for Finance and Security at RUSI, in conversation with former Basel Committee Secretary General Bill Coen. They discussed how financial supervisors should respond when foreign interference, sanctions, cyber threats and state activity move through the same institutions and infrastructure they already supervise.
Canada has been building an answer since 2023. OSFI now assesses whether federally regulated financial institutions can protect themselves against threats to their integrity and security, including foreign interference. It has also built a national security function that brings classified intelligence into supervisory work. What began as a legislative mandate is now part of how Canadian financial institutions are supervised.
A bank can be well capitalized and still face risk from foreign interference, state sponsored cyber activity, opaque ownership or compromised third parties. OSFI's integrity and security framework puts those threats inside its supervisory mandate.
In 2023, parliament expanded OSFI's mandate through Bill C 47. Federally regulated financial institutions became responsible for having policies and procedures to protect against threats to their integrity and security, including foreign interference. OSFI described the expanded mandate as a significant increase in the type of oversight it provides.
In 2024, OSFI finalized its Integrity and Security Guideline. Institutions were expected to assess risks involving foreign interference, undue influence, ownership, third parties, malicious activity and unauthorized access to their operations or assets.
In 2025, OSFI identified integrity and security as a major risk to Canada's financial system. Its work increasingly included state linked actors, cyber threats, geopolitical risk and intelligence sharing with federal security partners.
In 2026, The work continues as part of regular supervision. OSFI's 2026 to 2027 risk outlook continues to identify foreign interference, malicious cyber activity and threats to critical financial infrastructure. In September, OSFI appointed senior leadership with direct responsibility for integrity and national security.
National security has moved through legislation, supervisory guidance, intelligence capability, risk assessment and senior accountability. Banks should expect it to remain part of supervision, while fintechs may face many of the same expectations by extension through third party relationships with regulated financial institutions, including tighter due diligence, cyber, data, sanctions and incident reporting requirements.
Keatinge argues that traditional anti money laundering controls are better at finding known financial crime than activity backed by a hostile state. Money used to fund influence or interference may come from a legal source, move through regulated institutions and involve companies or people that appear legitimate. The problem may not be where the money came from. It may be who is directing the activity and why.
FATF has not said its framework is inadequate for political interference, but its own work shows how difficult state linked financial activity can be to detect. A June 2025 review found only 16% of assessed jurisdictions demonstrated high or substantial effectiveness in implementing targeted financial sanctions related to proliferation. The networks FATF describes often use front companies, hidden ownership, intermediaries, trade and virtual assets. FATF's proliferation financing review documents those methods.
FINTRAC's counter proliferation work covers sanctions evasion and threats to the security of Canada. Reporting entities are expected to look through ownership, control and corporate relationships when suspicious activity appears. A transaction can look ordinary while the people, companies or purpose behind it tell a different story.
Keatinge uses stablecoins to show how financial innovation can create economic and security risks at the same time. If households and businesses in a smaller economy transfer substantial savings from local bank deposits into US dollar stablecoins, local banks may lose part of the funding they use to make loans. At scale, that can become a financial stability and monetary sovereignty issue, especially when domestic savings and payments depend more heavily on assets and infrastructure controlled outside the country.
BIS research published in 2026 says stablecoins could make bank funding more expensive if people move money out of deposits. That could leave banks with less money to lend, including to small businesses. The IMF also warns that if money moves from local bank deposits into stablecoins backed by assets held abroad, less funding may remain in the domestic banking system. So far, however, the IMF says there is no clear evidence that this has caused widespread bank disintermediation.
Stablecoins also raise sanctions, cyber and financial crime concerns. FATF has identified virtual assets in proliferation financing and sanctions evasion, while state sponsored cyber actors have stolen digital assets to help fund government programs. Canada's stablecoin regulatory framework brings these risks into the wider debate over how digital money should be supervised.
Keatinge describes the financial system as a domain of geopolitical conflict. Regulators usually use different language, but sanctions, cyberattacks and financial infrastructure already play direct roles in relations between states. Governments can restrict access to financial transactions and services, state sponsored actors target financial institutions and payment networks, and financial infrastructure is treated as critical infrastructure.
In May 2026, G7 finance ministries, central banks, bank supervisors and market authorities ran a cross border exercise based on a large scale cyberattack affecting financial systems across G7 countries. They tested how authorities would respond, restore services, communicate during the crisis and coordinate across borders. The G7 exercise shows how a cyberattack on one part of the financial system can quickly affect institutions in other countries.
A serious attack on payments, banking access, market infrastructure or a major technology provider can disrupt services and weaken confidence at the same time. Firms building payment, identity, digital asset or financial infrastructure need to treat resilience as part of the product, not just an internal technology issue.
1. Foreign influence and a provincial referendum
In September 2026, Canada's Foreign Influence Transparency Commissioner said the office was aware of concerns about foreign influence activities directed at the Alberta referendum. The Commissioner reminded participants that arrangements with foreign principals intended to influence a provincial referendum can require registration. The Commissioner's statement shows how political influence can intersect with payments, intermediaries and funding relationships.
2. Crowdfunding brought permanently into financial crime controls
During the 2022 Emergencies Act response, Canada temporarily extended anti money laundering and anti terrorist financing obligations to donation crowdfunding platforms and certain payment service providers. After the emergency ended, the government made separate regulatory changes that permanently brought donation crowdfunding platforms and certain payment processors, including businesses handling fiat or virtual currency transactions into Canada's AML regime. NCFA challenged the permanent rules, arguing that the government had not published enough evidence to justify their scope and that smaller platforms would carry a disproportionate compliance burden. The episode shows how a security event can lead to lasting regulatory change for an entire fintech sector.
3. Digital assets used to preserve access to global finance
In August 2026, the US Treasury sanctioned two digital asset exchanges and a network of front companies that it said Iran used to launder billions of dollars, maintain covert access to international financial systems and support sanctioned actors. The Treasury action shows how exchanges, wallets and corporate networks can become part of sanctions enforcement even when a traditional bank is not at the centre of the transaction.
4. Payments routed through intermediaries
FINTRAC requires transactions originating from or bound for Russia to be treated as high risk and calls for additional checks on identity, source of funds or virtual currency, transaction purpose and beneficial ownership. Its sanctions guidance also describes shell companies, intermediary jurisdictions, crypto exchanges and brokers being used to obscure sanctioned activity. FINTRAC's Russia guidance shows why screening the immediate sender or destination may not reveal the real exposure.
5. Cyber theft used to fund weapons programs
FINTRAC has documented North Korea's use of cyber theft, digital assets, front companies and financial intermediaries in activity connected with weapons of mass destruction and ballistic missile programs. FINTRAC's proliferation bulletin connects cyber security, wallet intelligence, beneficial ownership and sanctions controls to the same state backed financing problem.
For fintechs, the risk may be behind the payment in who owns the company, who benefits, where the money is routed or what the transaction is meant to achieve. A security event can also bring new rules to an entire sector with little time to prepare.
Banks and credit unions may have to look beyond capital, liquidity and operational risk to ownership, foreign influence, sanctions, cyber threats and insider risk. Smaller institutions could face higher compliance costs as national security becomes more closely tied to supervision.
For fintechs and payment firms, onboarding may need to go beyond identity checks and standard AML screening. State linked counterparties, unusual ownership structures, high risk jurisdictions and cyber exposure can all matter. Faster payments and digital assets also leave less time to spot and stop suspicious activity.
RegTech firms have a clear opportunity. The challenge is to combine transaction data with beneficial ownership, sanctions, corporate networks and cyber intelligence without overwhelming compliance teams with false positives. AI, programmable finance and financial crime increasingly meet inside the same monitoring systems.
Founders and investors should expect these issues to arise earlier. They can affect product design, bank partnerships, regulatory approvals and access to capital well before a company reaches bank scale.
National security is becoming part of everyday financial supervision. The difficult challenge is spotting harmful activity when the money and transaction both look legitimate. Banks and fintechs will need to understand not just where money comes from, but who is behind it, where it is going and what it is meant to achieve.
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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October 6, 2026 | Consumer Finance, Artificial Intelligence And Data, Payments Infrastructure And Money Movement, Embedded Finance, SME Finance And Business Banking, Competition And Market Structure

We know it feels a little early to be talking holiday shopping, a bit like Costco putting out snowsuits in September, but this is really about Canadian spending sentiment, what people still value when budgets tighten and how AI is entering that choice.
On October 6, 2026, PwC Canada released its 2026 Canadian holiday outlook, finding that consumers plan to spend an average of C$1,487 this holiday season, down 11% from last year. Three quarters are taking steps to stretch their budgets and 69% plan to buy cheaper alternatives. Yet 54% say they would choose a more expensive Canadian made product over a similar imported one, up from 49% last year.
Canadians are looking harder at price, but they aren't treating every product attribute the same. For many shoppers, Canadian origin still carries enough value to justify paying more.
The same survey shows AI advancing further into the buying process. 28% expect to use AI somewhere in their holiday shopping journey, up from 17% last year. Consumers plan to use it to research products, compare options and find gift ideas. Some also expect AI to help complete purchases. For fintech, that means getting involved before the customer reaches checkout.
Nearly seven in ten respondents plan to seek cheaper alternatives, while more than half are willing to pay more for a comparable Canadian made product.
Among baby boomers, willingness to pay more rises to 66%, even though the same generation plans to cut holiday spending by 18%.
Canadian origin clearly has value, but price can still override it. In separate PwC consumer research, 75% of Canadians said they would pay a premium for locally produced food. When asked to choose directly between a cheaper imported product and a more expensive domestic equivalent, 62% chose the cheaper import.
For merchants, the practical question is how much more consumers will pay, for which products and under what circumstances. A Canadian label can help a product make the shortlist. Price, quality, convenience, delivery and trust still influence whether it gets bought.
PwC also found that 72% are actively looking for alternatives to U.S. made goods. That preference is unfolding against a wider Buy Canadian response to higher U.S. tariffs, while only 13% expect to shop across the border this holiday season. The survey was conducted online among more than 1,000 Canadians in late July and early August. PwC says the fieldwork took place before the latest escalation in Canada U.S. trade tensions and may under represent current Buy Canadian sentiment.
The results measure stated intentions rather than completed transactions, so they shouldn't be read as a precise forecast of holiday sales. The generational numbers deserve the same caution. Gen Z respondents plan to spend 8% more this year after PwC reported a roughly 35% planned decline in 2025. PwC describes this year's increase as closer to stabilization than a new spending surge.
AI shopping tools can bring price, product origin, rewards, availability and delivery into the same decision. A request such as “find me a Canadian made gift under C$100” already contains both a budget and a preference. The agent has to decide which products qualify and whether paying more for one of them still fits what the shopper wants.
A Canadian product that costs slightly more may become competitive after cashback, loyalty points or a merchant offer. A wallet or payment provider that knows those offers can influence the choice before the customer reaches the payment screen.
A merchant can make the product a shopper wants and still lose the sale if an AI service can't identify where it was made, whether it is in stock, what it costs or how quickly it can arrive. Better product data, clearer origin information and easier digital checkout can all affect whether a Canadian product appears in the shortlist.
This also changes where fintech companies can add value. Payment providers don't have to wait until the customer chooses a card. Loyalty platforms can narrow a price gap with targeted rewards. Wallets can surface merchant offers. AI services can compare the final cost alongside the attributes a shopper cares about.
The Buy Canadian premium makes the opportunity easier to see. Consumers may be cutting spending overall while still protecting certain preferences. Fintech products that understand those tradeoffs can help merchants compete on more than the sticker price.
Canadians are cutting holiday budgets, but they aren't valuing everything equally. More than half say a Canadian made product can justify a higher price even while most are looking for cheaper alternatives. As AI becomes part of product discovery and purchasing, it can influence what consumers see, which products make the shortlist and whether that Canadian premium still feels worth paying. If AI increasingly helps consumers decide what is worth paying more for, who gets to influence that decision?
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