Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Regtech, Compliance, Governance
AI Governance Gaps Exposed By Legal Leaders
Feb 4, 2026 | NCFA Expert Intelligence | AI Risk and Governance
Enterprise AI Adoption Outpaces Legal And Risk Frameworks
On February 3 2026, Dentons published a Voice from the Market North American Legal AI report following the firm’s inaugural Legal AI Summit. The report captures data insights from legal, business, and operations leaders across sectors about how organizations are handling real world AI deployment, specifically where AI adoption is creating legal and governance risk before regulators provide clear framework.
See: UK-Google Deal Raises DPI Red Flags for Canada
The findings matter for fintech founders and operators because legal teams are often the first to see where risk accumulates, such as in contracts, vendor relationships, employee use, and product liability, long before the market or regulators respond.
Key Findings
- 70% of respondents say AI already affects M&A diligence and business valuation
- 60% say contractual liability for AI errors remains unclear
- 35% reported concerns that third parties may train models on their data without explicit clarity or rights
- 57% expressed worry about employee monitoring and privacy issues tied to AI use
Most organizations in the survey reported they are designing their own AI governance frameworks because universal regulations do not exist yet. That gap puts legal risk in the critical path for AI use inside financial products and services.
“We want to cover the basics, but we don’t want to stymie innovation or scare people away with too many ‘do nots.’”
This comment above is from a survey participant highlighting the tension leaders face: Smart governance is needed, but overly prescriptive rules can impede experimentation and execution. So it's a real operational conflict that stakeholders must resolve long before policy catches up.
See: From Guardrails to Judgment in Claude’s 2026 Constitution
The governance gaps in the report align with real risks fintechs already encounter:
- AI models used in underwriting or risk scoring without clear liability assignment
- Vendor AI services trained on sensitive customer data without adequate contracts
- Unclear ownership of AI generated outputs or derivative intellectual property
- Lack of internal policies governing employee AI use on regulated data
Many fintechs are building AI capability faster than they are formalizing guardrails, which can expose firms to legal, operational, and compliance risk across functions where AI is integrated in workflows. Whether that's in credit decisions, document review, marketing, fraud monitoring, or customer support.
It also intersects with other areas NCFA has covered. For example, recent regulatory signals from the CSA–CIRO joint finfluencer guidance and the rise of stablecoin policy frameworks both show that Canada’s regulatory perimeter is tightening around behaviour and risk, not just product categories.
Talking Point
If legal risk surfaces first in AI contracts, vendor relationships, and internal use, where should fintechs build their earliest governance guardrails: in contracts, in internal policy, or in product design?
See: Canada’s Opportunity In Efficient Reasoning AI
Regulation typically always lags innovation. Legal and governance frameworks are being created inside enterprises today because no universal rulebook exists. Fintech innovators and operators who anticipate these gaps and embed guardrails early will be better positioned to scale responsibly and avoid costly legal exposure down the road.
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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VersaBank Becomes Banking Partner For QCAD Stablecoin
Feb 3, 2026 | NCFA Fintech Market Activity | Stablecoins and Payments
Canadian Bank Enters Custody And Safeguarding For Stablecoin
On February 3 2026, VersaBank announced that Stablecorp’s QCAD is its first stablecoin customer, bringing a Canadian Schedule I bank into the custody and safeguarding of a Canadian dollar-backed digital currency.
Stablecorp issues QCAD as a 1:1 Canadian dollar-backed stablecoin with reserve funds held at regulated financial institutions. VersaBank provides custodial services and settlement support for QCAD transactions using its digital asset infrastructure and API framework.
Most stablecoin infrastructure in Canada still depends on global US dollar networks. QCAD represents a domestic currency alternative, and VersaBank’s role places regulated banking oversight directly inside the operational flow of a Canadian stablecoin.
VersaBank has been building digital asset custody and tokenized deposit capabilities over the past several years. Its platform supports digital asset APIs, ledger compatible settlement tools, and custody frameworks designed for fintech integration. Bringing QCAD onto this platform turns that infrastructure into a live payments and settlement environment rather than a technical capability waiting for use.
See: VersaBank USA Launches Tokenized Deposits Pilot
Transaction volumes aren't disclosed, but the structure matters more than scale today. A Canadian stablecoin now sits inside a regulated bank’s custody, reconciliation, and safeguarding systems. It's a practical step toward making stablecoins usable for treasury management, fintech on and off ramps, merchant settlement, and cross-border flows without relying on foreign currency rails.
David Taylor, President and CEO, VersaBank:
"We are pleased to support Stablecorp and QCAD as they bring a Canadian dollar stablecoin to market. Our digital asset custody and settlement platform was built for exactly this type of use case, where regulated banking infrastructure meets digital currency innovation."
Talking Point
If Canadian stablecoins can settle through Canadian regulated banks, what role will they play in future payment rails, treasury operations, and fintech infrastructure?
Instead of sitting outside the financial system, digital Canadian dollars are beginning to move through it.
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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RPAA Forces Hospitality Payout Platform To Rewire Funds
Feb 2, 2026 | NCFA Fintech Market Activity | Payments and Regulation
Operational Changes Show How RPAA Hits Real Payment Flows
On February 2 2026, XTM Inc said Everyday Payments had started the Retail Payment Activities Act compliance process for thousands of hospitality businesses across Canada.
The release tied the work to the Everyday platform that manages hospitality payout flows such as tip outs and shift-based earnings. It also linked the compliance path to the migration of the AnyDay Canadian hospitality solution into the newly formed Everyday Payments entity.
See: Bank of Canada Clarifies RPAA Trust Tax Treatment for PSPs
XTM said that on January 28 2026 it implemented additional risk mitigation measures to address legacy operational practices across the platform.
Marilyn Schaffer, CEO of XTM:
"While the RPAA transition has included challenges related to reconciliation and technology alignment, we welcome building from a place of discipline."
The release lists three specific changes:
First, it said it had implemented regulated trust accounts for each client with an expected completion window of 30 to 45 business days.
Second, it said it had moved from weekly to daily withdrawals to improve reconciliation, control, and visibility.
Third, it said it had added enhanced audit and review rights so business owners could independently assess account standing.
This is where RPAA stops being policy and starts being operations. Fund segregation, withdrawal cadence, and auditability now sit inside the day to day flow of money for hospitality workers and merchants.
Everyday Payments operates payout infrastructure used by restaurants, bars, hotels, and hospitality venues across Canada to distribute earned funds to workers and reconcile merchant balances. That scale is what makes these changes meaningful. When a platform supporting thousands of venues adjusts how funds are held, released, and reviewed, it foreshadows what other vertical payment operators will soon face as RPAA requirements mature.
See: Payments Canada Admits Five New Payment Service Providers
The release also says RPAA's a system level baseline, requiring registration, operational risk management frameworks, safeguarding of end user funds, and incident reporting administered by the Bank of Canada. Remember RPAA registration opened on November 1 2024.
Gordon Reykdal, Executive Chairman, Everyday People Financial Corp, and Board Member, Everyday Payments:
“Applying under the RPAA to the newly formed Everyday Payments is a natural extension of how we operate our business. We welcome a clear and robust regulatory framework and believe it strengthens trust across the payments ecosystem, benefiting consumers, merchants, and partners alike.”
Why It Matters
Daily withdrawals, regulated trust accounts, and merchant audit rights raise the operating bar. Which vertical payment platforms will treat that bar as a moat, and which will treat it as friction that slows growth?
RPAA compliance is now showing up inside real operational workflows that move money for frontline workers and merchants, not only inside financial institutions.
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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NCFA Weekly Fintech Intelligence Jan 24-30, 2026
January 30, 2026 | NCFA Fintech Whisperer Weekly Intelligence | Payments And Money Movement, Artificial Intelligence And Data, Capital Markets And Market Infrastructure, Digital Assets Blockchain And Tokenization, Open Banking Open Finance And Data Sharing
Image: Freepik
This live weekly NCFA intelligence page tracks financial technology developments that significantly affect how fintechs build, sell, raise capital, and operate under scrutiny. Coverage prioritizes Canada and includes global events that directly influence competitive conditions, market access, and execution realities across fintech sectors. This page will be updated throughout the week with market movers in a live format and then each week we'll close the prior week's contents in prep for the upcoming week, and continue on a rolling basis. (Missed prior week's Fintech Whisperer? (December 6-12, 2025, December 13-19, 2025, January 1-9, 2026, January 10-16, 2026, January 17-23, 2026)
Weekly Fintech Market Intelligence Jan 24-30, 2026
Open Banking Open Finance And Data Sharing
UK Open Banking Reaches 351 Million Annual Payments
January 29, 2026, United Kingdom
- Open Banking Limited reported 351 million open banking payments during 2025, an increase of 57% from the previous year.
- Sweeping Variable Recurring Payment volumes increased 98%, while single domestic payments grew 52%.
- The ecosystem processed 24 billion successful API calls, up 27%. Account information services represented approximately four out of five calls, while payment initiation activity increased 53%.
- Monthly user connections reached 16.5 million in December, up 36%, although connections are counted by bank brand and are not deduplicated individuals.
- Weighted availability remained above 99.50% throughout the year, while average response time improved to 324 milliseconds.
Payment activity, API demand and recurring use increased while system performance remained stable. The figures establish an operating benchmark for countries building open banking around data access, payment initiation and commercial services. The later one billion payment milestone shows how quickly that base continued to expand.
Payments And Money Movement
Payments Canada Welcomes Five New PSP Members
Jan 27, 2026, Canada
- Payments Canada adds five payment service provider members: Brim Financial, Float Financial, KOHO, Paramount Commerce, and Wise Payments Canada.
- The announcement ties PSP membership to payments modernization work, including the Real Time Rail public policy framework.
- The update expands which non bank platforms can participate directly in national payments infrastructure instead of relying only on partner sponsorship and indirect access.
Once a PSP can join the payments club directly, it can cut onboarding friction, tighten settlement and reconciliation, and show stronger operational maturity to banks, enterprise buyers, and regulators. Founders that treat membership readiness as an operating system will move faster when big partners demand proof. Investors should watch which PSPs turn access into volume and repeatable unit economics, not just press.
AI In Finance
FCA Opens Mills Review Call For Input On AI In Retail Finance
Jan 27, 2026, United Kingdom
- The call for input sets out a review of AI's long-term impact on retail financial services for consumers, firms, markets, and regulators by 2030 and beyond, and seeks views across 4 interrelated and future-orientated themes: (1) Evolution of AI tech, (2) Impact of AI on markets and firms, (3) Consumer trends, and (4) Regulatory approach.
- The statement says FCA does not plan to introduce extra regulations and intends to rely on existing principles based frameworks focused on outcomes.
- Asks for input from a wide set of stakeholders, including financial firms, consumer groups, trade associations, technology providers, politicians, and academics, and requests responses by Tuesday Feb 24, 2026.
This is a planning signal for how the UK approaches AI in retail finance. Firms that sell into regulated buyers win time if they can show who owns outcomes, how models get tested, and how controls work across vendors and data flows. Teams that cannot evidence that quickly will find AI work slows down at the point of trust, not the point of build.
Market Infrastructure
SEC And CFTC Kick Off Project Crypto Coordination
Jan 29, 2026, United States
- The remarks describe a joint effort between the SEC and CFTC that aims to prepare both agencies to implement crypto market structure legislation as Congress advances a federal framework.
- They tie the need for coordination to real operating reality, since trading, clearing, custody, and risk management run across asset classes, technologies, and platforms.
- Frame harmonized standards and definitions as a way to reduce uncertainty and compliance cost for market participants.
This matters to fintechs that sell into regulated buyers because coordination changes the buyer checklist. The winners standardize controls and reporting across spot, derivatives, custody, and settlement workflows so they do not rebuild the stack every time definitions and boundaries tighten.
Tokenized Securities Get A Clear Compliance Map
Jan 28, 2026, United States
- The statement defines a tokenized security as a security represented as a crypto asset where the record of ownership sits in whole or in part on or through one or more crypto networks.
- The SEC groups tokenized securities into issuer sponsored tokenization and third party tokenization, and it describes third party models that include custodial tokenized securities and synthetic tokenized securities.
- The statement says the format does not change how federal securities laws apply and it points teams toward existing market roles for issuance, trading, custody, and recordkeeping, including The Depository Trust Company no action letter dated Dec 11, 2025 as context on indirect ownership and security entitlements.
This takes tokenization out of the hype lane and into build discipline. If you sell tokenized security rails to real institutions, you win deals when you answer the hard questions fast, who controls the record, how transfers stay legally effective, and where the product plugs into broker dealer, transfer agent, and clearing and settlement expectations.
Checkout.com Acquires Euro Stablecoin Issuer Blue EMI
Jan 27, Global
- Checkout.com acquires Blue EMI, a regulated European electronic money institution authorized to issue euro-backed stablecoins.
- The acquisition brings licensed stablecoin issuance, payments services, and open banking capabilities inside Checkout.com’s platform.
- Checkout.com also establishes a technology centre in Lithuania to support product development and regulatory execution across Europe.
This move embeds regulated stablecoin issuance directly into a global payments platform instead of leaving it at the edge. When stablecoins sit inside licensed EMI rails, settlement, liquidity management, and compliance become part of the core payments stack. Founders building wallets, FX, treasury, or cross border infrastructure should expect buyers to favor platforms that combine regulated issuance with distribution at scale.
Nomura Backed Laser Digital Applies For US National Trust Bank Charter
Jan 27, United States
- Laser Digital, backed by Nomura, applies for a US national trust bank charter with the Office of the Comptroller of the Currency.
- A national trust charter would allow federally supervised crypto custody and related services without state by state licensing.
- The application reflects a broader push by digital asset firms toward federal charters as a path to durable US market access.
A federal trust structure offers nationwide reach, clearer supervision, and stronger institutional credibility. Fintechs selling custody, settlement, compliance, or risk tooling should prepare for customers that operate under bank grade expectations. Investors should watch which applicants can survive the supervision burden that comes with federal status.
FCA Consults On Crypto Rules Handbook Part 2
Jan 23, 2026, United Kingdom
- The consultation opens Jan 23, 2026 and closes Mar 12, 2026, and it sets proposed rules and guidance for firms that conduct regulated cryptoasset activities.
- The package lists requirements that cover Consumer Duty, conduct standards, training and competence, senior manager accountability, reporting, safeguarding, and location policy guidance, with the full details in CP26/4 consultation paper PDF.
- The consultation states that the regulator plans to open its gateway for firms to apply for cryptoasset permissions in September 2026.
This pulls crypto compliance into product planning. Teams that want UK market access move faster when they convert these rule areas into workflows early, especially safeguarding, reporting, and accountable ownership across senior roles.
Conclusion
Payments access expands in Canada while regulators in the UK and US push firms toward clearer accountability in AI, crypto, and tokenized securities. The common thread is execution readiness. Buyers now ask who owns the record, who controls outcomes, and how a platform proves it can operate under supervision without slowing down. Fintechs that build for audit, governance, and market access early earn trust faster and avoid costly rebuilds when rules tighten around custody, settlement, and consumer outcomes. NCFA offers various curated resources to help founders and investors stay current on developments that impact fintech markets, subscribe to NCFA’s weekly newsletter, view a rundown of current fintech news and insights, or dive into the latest fintech industry research.
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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Manulife Uses AI To Compress Life Insurance Approval Times
Jan 29, 2026 | NCFA Fintech Market Activity | Insurtech and Automation
Image: Freepik/rawpixel.com
Manulife Automates Life Insurance Approvals In Minutes
On January 29 2026, Manulife Canada announced changes to its life insurance application process that allow eligible applicants to receive automated approvals in as little as two minutes.
The update combines a redesigned digital application with enhancements to Manulife’s AI driven underwriting engine, MAUDE. According to the release, the new workflow eliminates many manual steps that previously added days or weeks to approval timelines for straightforward policies.
Manulife reports that the updated process now supports instant decisions for a broader set of low risk applicants. In cases that still require review, the system routes applications more efficiently by pre screening risk factors before human involvement.
See: Quandri Raises $12M to Scale AI Automation in Insurance
The operational impact is material. Life insurance underwriting traditionally relies on paper based forms, medical questionnaires, and extended back and forth with applicants. Compressing approvals to minutes reduces abandonment, shortens sales cycles, and lowers per policy acquisition costs.
The release also highlights that Manulife’s digital life insurance business has grown steadily as customers shift toward online purchasing. Faster approvals support higher conversion rates while reducing pressure on underwriting teams as volumes scale.
This is not a cosmetic change. Automated underwriting at this speed requires confidence in data quality, model governance, and exception handling. Errors scale as fast as efficiency. That makes oversight, auditability, and fallback paths just as important as speed.
Karen Cutler, Chief Underwriter, Manulife Canada:
"Since launching last fall, advisor adoption has been strong. By December, more than half of eligible cases – 58% had approvals processed automatically through MAUDE, a 56% increase from pre-launch. By combining smarter questions with advanced AI, we're delivering a faster, more intuitive experience – without compromising on quality or protection."
Talking Point
If two minute approvals become the baseline for simple policies, where do insurers deliberately slow the process to manage risk, trust, and regulatory expectations?
See: AI Opens New Market for Insurance Appeals
Manulife’s update shows how artificial intelligence in insurance has moved past pilots. The competitive gap now sits between firms that embed automation directly into core underwriting and those still layering digital tools on top of legacy processes.
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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Algorithms Go On Trial As AI Scales Across Society
AI Risks | Jan 28, 2026
Image: Freepik
Why Courts Are Looking Inside Algorithm Design
On January 27, 2026, a landmark trial begins in Los Angeles Superior Court that forces major tech companies to explain how their algorithms work. The defendants include Meta and YouTube, as both TikTok and Snap reached a settlement just before trial, leaving Meta and YouTube to proceed before a jury.
Hundreds of families, teens, and school districts accuse social media platforms of intentionally designing products that keep young people addicted. The scale is hard to ignore. The coordinated cases include roughly 1,600 plaintiffs, more than 350 families, and about 250 school districts.
See: Meta AI Rules Trigger Calls for Stricter Oversight
The first trial focuses on a 19 year old identified as KGM and is expected to last six to eight weeks. It is the first of about 22 test cases that will guide how thousands of similar lawsuits proceed. A separate federal case involving more than 235 plaintiffs, including attorneys general from nearly three dozen U.S. states, is scheduled to begin in San Francisco in June 2026.
This isn't just a social media story. Courts are no longer looking only at what people post. They are looking 'under the hood' at how systems are built to see if and how algorithms are influencing behaviour at scale.
What Courts Are Actually Testing
For years, technology companies leaned on Section 230 of the Communications Decency Act, passed in 1996 to avoid liability tied to online activity. That protection still exists for user generated content. What changes here is the focus. Judges are allowing these cases to proceed because the claims target design choices.
Plaintiffs argue that features like infinite scroll, video autoplay, notifications, and recommendation systems encourage compulsive use. In a November 2025 ruling, the judge ruled that jurors must examine platform design choices rather than focusing only on user generated content.
That opens the door to evidence most companies prefer to keep internal. Product research, feature testing, internal discussions, and decision making around engagement will now move into public view. The question's are simple and uncomfortable. Why did the system work this way?
How Big The Stakes Really Are
The plaintiffs seek more than damages. They also ask the court to order changes to how the platforms operate, which could set safety rules for the whole industry. If courts agree that algorithm design causes harm, the impact reaches far beyond a single verdict.
See: Grok AI Sexual Image Failures Trigger Global Backlash
Executives from the biggest platforms may testify, including leaders from Meta, YouTube, Instagram, and Snap. Plaintiffs openly compare their strategy to tobacco cases from the 1990s, where internal documents and sworn testimony changed how courts and the public viewed addiction.
Recent settlements highlight the pressure cooker. Snap settled shortly before trial in one lead case. TikTok settled hours before jury selection began. Financial terms stay confidential, but the timing confirms risks companies would prefer not to explain in court.
Accountability and Why AI Changes Everything
These trials are taking place at a time when algorithms do more than recommend content. They adapt, learn, and optimize constantly. Modern systems adjust in real time based on user behaviour. Reinforcement loops scale instantly.
In January 2026, Anthropic chief executive Dario Amodei warns that AI risks are arriving faster than governance can keep up. In a 19,000 word essay called, 'The Adolescence of Technology", he writes:
“Humanity is about to be handed almost unimaginable power, and it is deeply unclear whether our social, political, and technological systems possess the maturity to wield it.”
Courts are now peering into that gap. When rules lag and impact grows, litigation becomes a way to force transparency. Judges and juries start asking questions regulators have not yet answered.
Financial services already run on algorithms. Credit decisions, fraud detection, transaction monitoring, pricing, robo advice, and nudges all rely on systems that influence user behaviour. These lawsuits do not accuse fintechs of wrongdoing, but they can change how accountability works.
See: AI Immerses Youth Today And The Real Question Of Protection
If courts see algorithm design as a product choice that predictably affects people, then how those systems are built really matters. Why a system pushes certain outcomes, what it favours, and where it slows users down can end up being questions for a judge or jury, not just a product team.
For founders and institutions, it's about building systems you can explain. Clear design goals, documented tradeoffs, and guardrails reduce exposure and build trust with users, partners, and regulators.
Why This Moment Feels Different
As plaintiffs’ attorney Matthew Bergman puts it, “The fact that a social media company is going to have to stand trial before a jury … is unprecedented.” Courts now ask companies to explain their design decisions in plain language, under oath, and in public. That expectation will not disappear. Innovation keeps moving fast. Accountability now moves with it.
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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Why A $35M Built In Canada Startup Still Moved To The US
Startups and Talent | Jan 28, 2026
Built In Canada Doesn't Always Mean Staying In Canada
On January 21, 2026, CTV News reported that a fintech startup built in Canada, Internet Backyard, reached an approx. valuation of $35 million in Canada but ended up relocating to the United States. The story drew attention because the venture succeeded here but still chose to leave after proving product market fit.
See: Which Fintech Processes Are Most Ready for Agentic AI
The founders included a recently graduated international student from Vietnam and her co-founder from Brazil.
The founders built the product in Canada, validated demand, hired talent, and reached scale. After that proof point, they made the decision to move the business south.
The founders cited two main reasons for leaving: access to growth capital and visa limitations. Those challenges aren't unique and reflect structural gaps that continue to impact where ambitious companies choose to grow.
While Canada's become a strong place to attract global founders, students, and early stage builders. The challenge emerges later, when companies move from validation to rapid expansion and require larger capital rounds, senior leadership mobility, and operational certainty. In those moments, founders tend to optimize for speed and certainty rather than geography.
Canada’s Venture Capital Market Makes Scaling Harder
Canada’s venture capital environment continues to constrain companies at the growth stage. According to data cited by RBCx, Canadian venture capital firms raised just over $2 billion in new capital in 2025. That level sits well below longer term averages and reflects a market dominated by a small number of large funds.
The same data shows that emerging fund managers raise only about $249 million of that total. The top five funds account for roughly 83% of all capital raised, concentrating decision making power among a small group of investors. This concentration reduces the number of domestic lead investors capable of supporting large follow on rounds. For founders approaching Series B or later, this structure often results in slower fundraising cycles, fewer competitive term sheets, and increased pressure to secure capital outside Canada.
See: 12 Market Entry Approaches for Fintech Startups
Fundraising constraints also impact capital allocation. Through the first nine months of 2025, total venture capital investment in Canadian companies reached approximately $4.9 billion across 386 deals, compared with about $8.6 billion invested across all of 2024, based on aggregated industry reporting referenced by RBCx.
The conditions make capital availability less predictable at the exact moment companies need speed and certainty. When companies are ready to scale, relocation is increasingly becoming a rational operational decision based on their confidence in the domestic ecosystem, not a reflection of founder loyalty.
Immigration And Founder Mobility Constraints
Capital isn't the only factor. Immigration and founder mobility also impact the decision where founders choose to scale.
Canada’s Start Up Visa program aims to attract global entrepreneurs and support company building inside Canada. In practice, the program faces processing delays and capacity strain. The federal government now applies application caps and limits new intake while it works toward program changes expected to take effect in 2026, according to Immigration, Refugees and Citizenship Canada.
For founders already operating a growing company, these conditions create uncertainty. Delays and intake limits complicate executive mobility, cross border hiring, and decisions about where senior leadership can legally and reliably operate.
By comparison, the United States offers more established founder and talent pathways, including O-1 and H-1B visas, that companies can pursue once growth accelerates. For teams making time sensitive scaling decisions, visa predictability can be a competitive advantage. Having said that, the US administration has introduced new fees which could adversely affect the program.
Why It Matters
When companies leave after proving traction, Canada loses future job creation, downstream investment, and the chance to build repeat founders who recycle experience and capital into the next generation of startups.
Read: U.S. Brain Drain and Implications for Canadian Fintech
The solution is to close the gap between early success and long term scale (reducing top founder frictions). It requires coordinated progress on growth capital availability, immigration execution, and speed of decision making. Until those pieces align, Canada will continue to function as a strong launch environment but a weaker destination for companies once they reach global scale.
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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