David Durand, Advisor, Innovation and Advocacy
September 9th, 2020
David Durand, LL.L., B.Sc. chem., – Founder and Managing Partner of Durand Lawyers – Lawyer (Québec)[...]
Category Archives: Personal Finance
How Do Canadian Discount Brokers Compare With Robinhood?
Guest Post | April 12, 2021
Robinhood is a US-based digital stockbroker and trading app that experienced exponential growth over the past few years. The company is on a mission to democratize investing by making the stock market accessible to all. To help with its purpose, Robinhood introduced zero-commission stock trades way back in 2013.
Unfortunately for Canadian investors looking to build their savings, Robinhood is not available to them. There is no indication that Robinhood along with rivals like eToro will make their way up north anytime soon.
In the meantime, the battle of Canadian brokers pits legacy and old-school institutions against newer-age online platforms. For example, this BMO Investorline vs Questrade guide compares and contrasts BMO’s brokerage service that was launched in 1988 with Questrade’s service that was launched just in time for the new century.
Why Isn’t Robinhood Available In Canada?
Robinhood Co-Founder and Co-CEO Baiju Bhatt said in a Reddit AMA in 2019 the company paused in 2016 all plans related to market expansion. Robinhood cited the surprising Brexit outcome and corresponding market uncertainty in its decision to focus exclusively on the US market.
By July 2020, Robinhood confirmed all international expansion plans are no longer part of the company's thought process. Expectations for Robinhood to become one of the online stock brokers available to Canadians has been shot down, possibly for good.
Robinhood said: “We’ve come to recognize that our efforts are currently best spent on strengthening our core business in the US and making further investments in our foundational systems.”
Chances are more likely that eToro will bring its online stockbroker platform to Canada. The Israel-based rival to Robinhood already has a presence in the United Kingdom, Europe, Australia, and elsewhere. The company recently closed a deal to list itself on the US stock market and will have US$800 million in cash to support future growth initiatives.
In the meantime, the list of stockbrokers in Canada remains mostly the same in 2021 as it was 20 years ago. The list of some of the more notable online Canadian brokers including BMO Investorline, Questrade, Qtrade, Scotia iTrade, TD Direct Investing, WealthSimple, among others.
Do Any Stock Brokers In Canada Offer Free Trading?
Robinhood gained fame by letting all clients transact on its online stock brokerage platform for free. The challenge it presented to legacy brokers was immense and US banks scrambled to introduce free stock platforms of their own.
Only one of the online Canadian stock brokers offers free trading -- sort of. Wealthsimple is a zero-fee robo-advisor firm that only charges clients an annual fee equal to 0.4% or 0.5% of their total assets under management.
Users with up to $100,000 in assets pay a fee of 0.5% and those with more money pay a reduced fee of 0.5%. The math behind the fee structure could prove to be extremely beneficial or very disadvantages for users depending on their individual circumstances.
A Canadian investor that just opened an online brokerage account with $50,000 will pay roughly $250 a year in fees. The tradeoff is the investor is paying for an automated service that includes features like automatic rebalancing, dividend reinvestment, and tax loss harvesting.
However, knowledgeable and investment savvy Canadian investors looking for a do-it-yourself experience can set up a diversified portfolio with 12 stocks at roughly half the cost of one year’s worth of Wealthsimple fees. Wealthsimple charges a premium forex fee for all trades denominated in US dollars so it may or may not be advantageous compared to rivals like BMO Investorline and those from big banks that typically charge a flat fee of nearly $10 a trade.
Source: Wealthsimple
Some Canadian Brokers Offer Free ETF Trading
A few other Canadian online brokers offer free access to buy and sell exchange-traded funds. Some of the brokers that offer free ETF trading include Qtrade, Wealthsimple, National Bank Direct Brokerages, among others.
Other brokers like BMO Investorline are stuck in the dinosaur era where buying and selling ETFs still cost close to $10.
Do Canadian Online Brokers Offer Fractional Share Ownership?
Another key feature that makes Robinhood stand out as one of the more popular online stock brokers is a feature that lets investors buy fractional shares. Investors can buy as little as one one-millionth of a share and upwards.
This gives investors of all shapes and sizes the ability to own what the big shots on Wall Street own. Investors can buy one-tenth of one share of Amazon's stock for around US $330.
Canadians hoping to take advantage of similar features on one of their online stock brokers are mostly out of luck. A Questrade representative on Reddit confirmed it has “no plans” for fractional trading at the moment.
Interactive Brokers is a US-based online stock broker available to Canadians and it started offering fractional share ownerships to its Canadian users in 2019. Aside from Interactive Brokers, Canadians hoping to do what Robinhood clients have been doing for some time are out of luck.
Conclusion: What Are The Closest Canadian Alternatives To Robinhood?
No single Canadian online stock broker offers an identical experience to Robinhood. Wealthsimple would be considered among the closest given its zero-commission fee structure although for many this could prove to be more expensive given its value-added fees.
Canadian brokers like Questrade and Qtrade might be viewed by some as a close alternative. All three embrace the digital revolution and target younger millennials looking to invest their small but growing fortune.
On the other end of the spectrum, old Canadian online brokers like BMO Investorline, RBC Direct Investing, and TD Direct Investing have the least in common with Robinhood that strives to make investing cheap and accessible to all.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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#FFCON21 Brings Canada’s Tech Hub to the Web for 3 Days of Fintech Insights, Business Building
Investor Wire | Jonathan Keim | April 10, 2021
FFCON21: Breaking Barriers May 11-13
- The 2021 Fintech & Financing Conference and Expo (#FFCON21) is scheduled May 11-13
- Global virtual conference streamed from Toronto, the hub of Canada’s developing fintech ecosystem, but presented online due to pandemic concerns
- 50-plus speakers with expert insights planned
- Networking opportunities to connect one-to-one with peers and experts
- Draft pitching competition to gain attention for business brand (as well as prizes)
The 7th Fintech & Financing Conference and Expo will be held for global participants virtually from May 11-13, 2021. Originating in Toronto, FFCON21 has grown from a basic collaboration between entrepreneurs and big businesses intent on driving change into a thriving gathering of fintech, blockchain, crypto, digital banking, AI, payments, wealthtech, regtech, alternative finance stakeholders and global participants with a love for Canada’s fintech ecosystem.
In its seventh year, the 2021 gathering (#FFCON21) has been adapted to the health security needs of attendees during the present global pandemic, offering exclusive online access to a three-day collection of educational courses, networking opportunities, pitch competitions, e-booth demos and an auction for charity.
The conference will take place May 11 to 13, still celebrating its place within Canada’s rising fintech and financial sector even as it extends its reach to a global audience through a virtual platform. Tickets, including early bird rates at present and a special startups-only package, are available at https://ibn.fm/3Ov1h.
Conference organizers anticipate bringing attendees to the table with some 50 speakers ranging from Main Street executives such as the president and CEO of public-private partnership Toronto Finance International to enterprising up-and-comers such as the founder-partner of startup builder Borderless Ventures and its CryptoAssets Institute.
See: Showcase your products/services: Secure a DEMO Speaker spot at FFCON21: May 11-1
The second annual draft pitching and demo competition follows a sports league model geared toward identifying and featuring emerging and high growth fintech startups and scaleups. The “Breaking Barriers” theme of the conference is particularly appropriate here as draft participants compete for exposure and prizes, including promotion to investors, media, prospective buyers and partners.
The online access format driven by the pandemic proved advantageous last year following a scheduling delay necessary to reimagine the presentation of the spring conference. The digital venue and interactive platform allows for increased participation on a global scale because of the elimination of travel expenses from the plan. Networking and file sharing are able to occur naturally and easily using integrated online text and video chat features.
Additionally, the online platform makes it simple to access all digital content to catch up on anything attendees may have missed at a time when it is more convenient. Networking and e-booth displays present attendees with the potential to make connections with a future business mentor, investor or a prospective employee to help build their companies.
And at the heart of it all is the class schedule with insights from thought leaders on the direction of fintech solutions and emerging fintech trends. Presentations will explore topics that address the latest innovations, emerging industry regulation and the impact of government activity on financial technology markets.
For more information, visit the conference’s web portal at https://fintechandfunding.com.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Financial advice blows up on TikTok. The narrative has changed.
InvestmentNews | Nicole Casperson | Feb 15, 2021
In the past, advisers viewed social media as a marketing tool that targeted only millennial and Gen Z clients. That narrative has changed.
Imagine having less than a minute to dispense financial advice while standing in a room of thousands, or even millions, of potential clients. Now imagine doing that alone from the comfort of your home, with a smartphone and mobile app as the only tools needed.
That’s what financial advice is on TikTok, the short-form, video-sharing app. Type the hashtag personal finance — #personalfinance — into the TikTok app’s search bar and thousands of videos pop up that provide viewers with financial advice and explanations of financial terminology in the form of 60-second videos.
See: Can Reddit Forums Take Down Hedge Funds? Why GameStop Stock Soared
Financial influencers, some certified financial planners and some not, have leveraged society’s social media obsession to answer finance questions online ranging from “What’s a short squeeze?” to “How do I start saving for retirement?” in order to rack up followers and build a business.
These efforts are flourishing: TikTok videos tagged #personalfinance have garnered 3.5 billion views from the more than 1 billion monthly active users on TikTok, according to mobile data and analytics platform App Annie. By comparison, videos found under two other popular hashtags, #cookingtips or #healthtips, have 2.6 billion and 2.1 billion views, respectively.
While expanding financial advice to a wide range of young investors is a good thing, there is potential for bad results when mixing personal financial advice and TikTok, said Ritholtz Wealth Management CEO Josh Brown.
“Users should be aware that if you’re listening to people on social networks and not even bothering to Google them to see whether they have credentials and blindly doing what those people are saying, that responsibility is on the viewer just as much as it’s on the creator,” Brown said.
For example, some TikTok influencers create videos showing users how they invest in certain stocks to make money. One user, who goes by the TikTok username @Biaheza, shared a video with his 64,000 followers illustrating how he used the free trading app Robinhood to invest in “speculative” and “degenerate” trade options to make money, he said in the video. The user claims his strategy pushed his account value to $124,000.
While the financial advice may be risky, social media influencers with large followings can earn money through these platforms because advertisers will pay content creators to tout brand promotions and sponsorships to their thousands, or millions, of followers.
See: After you die what happens to your digital assets and NFTs?
In July, TikTok introduced a $200 million TikTok Creator Fund after the platform’s popularity “propelled thousands of creators into brand partnerships, sponsorships, and representation deals,” according to TikTok’s announcement.
Through the fund, TikTok users can apply to earn an income based on these criteria: Users must be 18 or older, have at least 10,000 followers, have at least 10,000 video views in 30 days, and consistently post original content in line with TikTok guidelines.
In the past, advisers largely viewed social media as a marketing tool that targeted only millennial and Gen Z clients. Clearly, that narrative has changed as the pandemic-fueled interest in finance has turned social media and financial advice into a full-blown business model.
INFLUENCER IMPACT
The focus on traditional ultra-high-net-worth clients typically steered advisory firms away from social media and younger investors. But millennials and Gen Z are expected to inherit $68 trillion, the greatest generational wealth transfer, over the coming years.
Younger generations are going to keep making decisions based on what they learn about finance from TikTok videos, she said. The way TikTok’s algorithm delivers content makes it easier to find random videos and introduces personal finance to a group of people who might not have been interested before.
One of the most popular providers of personal finance advice videos, with more than 1.5 million followers and 22.2 million likes on TikTok, is a former Merrill Lynch financial adviser turned social media influencer, Humphrey Yang, who’s known as @humphreytalks.
At 33, the San Francisco-based content creator snowballed on TikTok after he posted finance-focused videos on the platform. One video that went viral shows Yang scaling former Amazon CEO Jeff Bezos’ net worth with rice, with each grain representing $100,000.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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GET DRAFTED AT #FFCON IN 2021! Sign-up for NCFAs weekly newsletter and never miss a beat:Support NCFA by Following us on Twitter!Follow @NCFACanada |
NCFA Announces 7th Annual FFCON21 Digital ‘Breaking Barriers’ FinTech Conference
NCFA Canada | FFCON21 Team | March 11, 2021
FFCON21 to connect HR talent and explore accelerated Fintech trends and innovations paving the way to mass adoption and scale
TORONTO — March 11, 2021 — The National Crowdfunding & Fintech Association (NCFA), organisers of Canada’ foremost Fintech conference, is pleased to announce the return of FFCON for its 7th consecutive year. The annual FFCON Digital Event, held in association with Toronto Finance International (TFI), will take place May 11-13, 2021.
Building on the success of previous conferences, this year’s event -- titled ‘Breaking Barriers’ -- will bring together an international community of leading voices in fintech, digital banking, tokenization, blockchain, CBDCs, digital identity, AI, capital markets innovation, EDI (equality, diversity and inclusion) and sustainable, open, and alternative finance.
“Fintech is evolving quickly and breaking barriers,” said Craig Asano, Founder and CEO of the National Crowdfunding & Fintech Association of Canada. “Fintech is no longer niche -- it is a permanent technological evolution that is changing the world of finance by high growth fintech companies and incumbent financial institutions. It’s rewiring financial services for the new economy and setting new standards that also demand new regulations. Most importantly, it’s about improving access and delivering better financial products, services and outcomes for everyone especially consumers and small to midsize enterprises (SMEs).”
The theme of FFCON21 reflects the growth and challenges that the Canadian Fintech industry has had to navigate through to foster scalability and mainstream adoption, made all the more complicated through the disruption caused by Covid-19.
“Our Fintech ecosystem has become a great strength in the greater Canadian innovation landscape. COVID-19 has accelerated the pace of change in the industry and highlighted the important role digital innovation plays in the competitiveness of the financial services sector. Rapidly changing consumer habits and ways of delivering products and services offers a significant opportunity for Canadian Fintechs" Jennifer Reynolds, President & CEO, Toronto Finance International
Beyond covering important fintech topics, FFCON21 will offer an engaging and fast-paced interactive agenda, including investor speed dating, sports-inspired Fintech Draft pitching and demo competitions designed to identity and feature emerging fintech stars, debates, round table discussions, digital ebooths and virtual expo, 1-on-1 networking opportunities and unique experiences. Delegates and partners can build their knowledge base, launch or scale an idea or collaborate digitally with visionary entrepreneurs and investors.
New to FFON21 this year, organizers are adding an HR fintech talent marketplace to connect anyone seeking new opportunities with high growth companies, and a ‘deep dive’ masterclass series on the topic of decentralized finance as part of its quarterly Global Fintech Now program for VIP passholders.
The multi-day event will run from May 11-13 inclusive with daily content to span feature themes of Digital Innovation and Breaking Barriers, Creation & Growth and Global Future Forward. Updates to the evolving programme and speaker lineup can be found on the FFCON21 website.
Registration Now Open
Registration for FFCON21 Breaking Barriers is now open with special early bird rates for delegates, exhibitors and startup packages available for a limited time. Tickets can be purchased at https://fintechandfunding.com/tickets/.
Useful Links
Fintech Draft Pitching & Demo Application
Website | Experience | Partner Packages
Connect with us
About the NCFA
The National Crowdfunding & Fintech Association (NCFA) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain and cryptocurrency, Regtech, and Insurtech sectors. To learn more about NCFA visit www.ncfacanada.org
About Toronto Finance International
Toronto Finance International (TFI) is a public-private partnership between Canada’s three levels of government, the financial services sector and academia. TFI’s mission is to lead collective action that drives the competitiveness and growth of Toronto’s financial sector and establishes its prominence as a leading international financial centre. For more information, please visit: www.tfi.ca
About FFCON
FFCON21 (Fintech and Financing Conference) is an annual conference hosted by Canada’s National Crowdfunding and Fintech Association (NCFA). Now in its seventh year, FFCON21, held in association with Toronto Finance International, will bring together professionals and innovators in fintech, open banking, digital identity, blockchain, cryptocurrency, AI, capital markets innovation, sustainable and alternative finance.
Further information about the conference can be found at www.fintechandfunding.com
FFCON21 Contacts
Craig Asano
Founder and CEO, NCFA
casano@ncfacanada.org
(416) 618-0254
Partnership Inquiries
Lauren Linton
Advisor, NCFA
lauren@ncfacanada.org
(416) 569-4349
Media Contact
The Top Floor Public Relations
Michele McDermott-Fox
michele@thetopflooragency.com
(905) 379-1893
David Lewis
david@thetopflooragency.com
(905) 541-5699
N26 Co-founder Maximilian Tayenthal talks growing one of the fastest-growing mobile banks in the world
McKinsey Digital | Feb 26, 2021
Setting a bold vision, adapting the business to respond to market feedback, and putting customer satisfaction first has enabled digital-banking start-up N26 to grow rapidly into a global bank valued at $3.5 billion.
Creating a new, global business in a regulated industry such as financial services is challenging. Setting the organization up for global scale and turning it into one of the most successful digital disruptors comes with even greater challenges. In a conversation with McKinsey’s Jerome Königsfeld and Lukas Salomon, N26 cofounder and co-CEO Maximilian Tayenthal reflects on learnings from the company’s rapid growth and rollout across 25 countries.
Ability to Adapt
Lukas Salomon (LS): You launched N26’s banking product six years ago and have scaled rapidly. Looking back to your early days, how did you come up with the idea for the business?
Maximilian Tayenthal (MT): We originally started with a different idea: we were offering a prepaid card for teenagers. The card was connected to an app through which their parents could control the card. But when we launched a beta version of this product, we quickly discovered that parents weren’t actually using this product for their kids—they were using it for themselves. We then realized that we might be able to play in a bigger arena, as our product had all the elements of a digital-banking offering: cards, an app, and accounts into which people could deposit money. If we could build a strong product, we’d be able to compete with large incumbents in their core business.
See: Banking on digital growth with Chris Skinner
LS: After identifying that opportunity, what were the first indicators that showed you’d actually be able to scale it into a billion-dollar business?
MT: There wasn’t one specific moment in which we really knew it’d be a success.
As soon as we launched the banking product, we saw strong excitement from customers and confirmed that there was a need for our product. We had a waiting list of 50,000 prospects. Once we understood that potential, my co-founder and I set our long-term ambition.
We knew we didn’t want a quick exit. Instead, we wanted to build a global financial institution, impact the lives of 100 million customers, and compete with the biggest banks worldwide. I think setting this level of ambition early on is what differentiated us from many other start-ups—we always follow our North Star target of 100 million customers.
Navigating rapid growth requires experienced leaders, scalable back-office systems and full transparency in reporting
Jerome Königsfeld (JK): What were the organizational measures you took to enable rapid scale-up?
MT: That’s definitely been challenging. We started as a team of two in our living room in Vienna and knew every tab and cell of our business-case spreadsheet. But eventually you realize that you’ve grown so much that you can no longer do that and need to delegate.
See: Versabank to Launch VCAD, World’s First Bank-issued, Deposit-based Digital Currency
In the beginning, you dedicate all your focus to the product, which means that back-office and organizational processes sometimes lag behind.
With our growth rates, it has been particularly hard to keep up with the pace. At times, we were doubling both our customer base and our employee count every six to eight months. This came with major challenges: new team members were sometimes onboarded by someone who had joined the company only four weeks before them. Somebody hired in a stand-alone role could find themselves managing a team of 20 direct reports six months later.
When you’re growing so quickly, it’s vital that your systems and organizational processes are scalable. Think about the situation you want to be in two years from now. Select systems that don’t just work for the 100 employees you have today but for the 500 or 1,500 you might have by then. Make sure that you also hire people who’ve seen big organizations before and who are able to lead others. We may be a young team, but today we’re hiring people with a lot of experience, especially for executive roles.
LS: While your role encompasses a broad set of responsibilities across the company, you also served as the CFO. How do you see the role of the finance function in a rapidly scaling business?
See: 3 Challenges of Scaling a Fintech Company Across Borders
MT: One of the key responsibilities is fundraising. At around $3.5 billion, we’re one of Germany’s highest-valued and most well-funded private start-ups, but we still have a very big vision and need to make sure that we find sufficient capital to fund our global expansion. We’ve greatly benefited from the liquid private markets of the past few years but are now also considering a potential IPO in the future.
JK: What about monitoring and reporting? How do you ensure you’re on track and establish transparency on plans and budgets when your business transforms so quickly?
MT: We’re passionate about data. We monitor dozens or even hundreds of key metrics such as sign-ups, churn, cross-sells, upsells, and subscriptions in real time. Live dashboards allow everyone to track progress every minute. On the financial side, we have a full P&L every month but monitor KPIs within the teams daily.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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GET DRAFTED AT #FFCON IN 2021! Sign-up for NCFAs weekly newsletter and never miss a beat:Support NCFA by Following us on Twitter!Follow @NCFACanada |
Fintech start-up Hardbacon secures $1.1 million thanks to equity crowdfunding
Wealth Professional | James Burton | March 2, 2021
Finance app Hardbacon receives boost to growth plan as it prepares to go public
A Montreal-based fintech company has secured more than $1.1 million through the Frontfundr equity crowdfunding portal as it positions itself to go public.
See: Fintech Fridays EP51: Bacon and Eggs
Hardbacon brought in $1,136,400 from more than 800 investors, smashing its $500,000 fundraising goal. The company, which markets a personal finance app, has thus completed one of the largest rounds of equity crowdfunding in Canada, with this laterst round bringing its total financing to more than $2.2 million since its inception.
A B2C app for self-directed investors, it generates revenue from Hardbacon Premium subscriptions as well as from lead generation and sales of its two white label solutions for financial institutions: a portfolio analysis module and a financial planning module. Its partners include National Bank Direct Brokerage and Desjardins Online Brokerage, and it also has an advisor feature.
The funding will be used to accelerate the fintech’s growth and fuel its ambition to reach the summit of the lead generation market in the financial services industry.
CEO Julien Brault told WP: “Raising a round of over $1 million with a goal of $500,000 is a huge vote of confidence from our user base and the Canadian public. It put us in a very good position to execute our growth plan as well as go public. This round, which is among the largest fundraising round in FrontFundr's history, proves once more that equity crowdfunding is a valid financing option for tech companies in Canada. I’m pretty excited about closing such an historic round and it will give us the fuel we need to hire the right people to execute on our growth plan.”
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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GET DRAFTED AT #FFCON IN 2021! Sign-up for NCFAs weekly newsletter and never miss a beat:Support NCFA by Following us on Twitter!Follow @NCFACanada |
How banks are using AI to create smart trading platforms and identify client needs
Investment Executive | Fiona Collie | Feb 22, 2021
Financial services firms are using AI to create smart trading platforms and identify client needs
Technology is everywhere in the financial services industry, and banks have been building their artificial intelligence (AI) bona fides in recent years.
Components of AI include natural-language processing, which uses technology to analyze the spoken and written language, and machine learning, which uses algorithms to analyze and learn from large amounts of data.
See: Top 12 AI Use Cases: Artificial Intelligence in FinTech
Since 2016, Royal Bank of Canada (RBC) has focused on AI through its dedicated research division called Borealis AI. In October 2020, Borealis AI and RBC announced the launch of Aiden, an AI-driven electronic trading platform for institutional investors.
Aiden uses “reinforcement learning.” For every trade [Aiden] makes, it also justifies why it just did that,” Agrafioti said. “And that gives people confidence and trust that they understand the context of the algorithm they’re seeing.”
a form of AI based on behavioural psychology that either rewards or penalizes an algorithm when it makes a decision. This is the same type of machine learning used for AlphaGo, a Google-owned computer program that beat a human player at Go, a sophisticated board game, in 2016.
But making trading decisions in a live market is more complicated than playing a board game, noted Foteini Agrafioti, chief science officer at RBC and head of Borealis AI.
“It’s a much more complex environment where we were able to deploy [Aiden] and we’re extremely happy with the results,” she said.
Traditional electronic trading programs are designed to follow specific rules in certain market conditions and must be reprogrammed when they encounter new scenarios — which leads to downtime. Aiden, on the other hand, is dynamic: it can adapt to changing market conditions, Agrafioti said.
See: FCA and City of London’s Digital Sandbox Pilot – Presentations and Use Cases
Still, Aiden is not completely autonomous. As with other AI platforms, humans can overrule Aiden’s investment decisions when necessary. But before that happens, Aiden has a chance to explain its rationale to a human supervisor — a crucial feature for an AI platform.
Banks also are using AI to leverage one of their most valuable resources: client data. These data may include emails sent to an advisor, financial transactions and the number of times a client has signed in to an online account.
In 2020, Bank of Nova Scotia announced the creation of a global AI platform that uses client data to help identify client needs.
During the first wave of Covid-19, Scotiabank used its AI capabilities to identify clients who were at risk financially as a result of the pandemic. The bank then contacted those people to offer potential solutions — something Scotiabank intends to do again in the future.
“We will continue to focus on providing applicable unique solutions for our customers and being able to tailor those solutions to customer needs,” said Phil Thomas, executive vice-president, customer insights, data and analytics, with Scotiabank.
As Scotiabank and other companies continue to harness customer data, critics wonder how AI platforms use that data, leading to growing demand for “ethical” AI.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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GET DRAFTED AT #FFCON IN 2021! Sign-up for NCFAs weekly newsletter and never miss a beat:Support NCFA by Following us on Twitter!Follow @NCFACanada |
