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Fintech Fridays EP51: Bacon and Eggs

NCFA Canada | Feb 19, 2021

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EP51: Bacon and Eggs

Featured Guest:

JULIEN BRAULT, Chief Executive Officer, Hardbacon  (LinkedIn)

About Julien Brault

Julien is more of a cheerleader than he is a conductor. He is the one continually pushing the Hardbacon team to excel, but he’s also responsible for developing strategic partnerships with financial institutions and promoting the company. Julien founded a publishing house called Amerik Media, which he sold in 2010, and was an economic reporter for Les Affaires for five years. He also served as Director of Growth for a fintech investment fund before funding Hardbacon in 2017.

For more information, contact:

Julien Brault, Hardbacon CEO at 514-250-3255; julien@hardbacon.com

About Hardbacon

Hardbacon is a mobile application that connects to your bank accounts, credit cards, and investment accounts, helping you make better financial decisions and make your dreams come true. Hardbacon is a powerful planning app which allows you to plan, budget, invest and increase your savings. Hardbacon also has a product comparator that allows you to compare the financial products available in the market and help you find the best ones for your needs.

The Hardbacon app can be downloaded from the App Store or Google Play.

To follow our crowdfunding: https://www.frontfundr.com/hardbacon

Our website: https://hardbacon.ca/

 

logo color - Fintech Fridays EP51:  Bacon and Eggs

About this Episode

On this episode of Fintech Fridays, Craig Asano, CEO of NCFA connects with Julien Brault the CEO of Hardbacon, an emerging high growth financial fitness and tracking app in Canada. They talk about the story behind Hardbacon, raising capital via equity crowdfunding and IPO routes, digital platforms as lead generation, and helping Canadians improve their wealth by making better financial decisions.  Enjoy! 

 

Subscribe and tune in each Friday to check out the latest movers and shakers in fintech. Listen to more podcasts here:

Season 1 | Season 2 | Season 3

 


Fintech Friday Transcript of Episode 51: Julien Brault of Hardbacon

Intro: Welcome to fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners. Covering all things fintech, blockchain, AI and alternative finance.

 

Craig Asano: [00:00:18] Hello, everyone. My name is Craig Asano, the founder and CEO of NCFA welcoming you to another fantastical episode of Fintech Fridays. It's a weekly podcast brought to you by NCFA and Partners, where we sit down with incredible people in the Fintech and funding community to talk about all things fintech, trends, innovations, developments, even challenges and more. Fintech Fridays is an evolving, innovative educational platform focused on delivering authentic personalities, content and storytelling on the journey to the mainstream adoption of financial technologies and its impact on the future of finance. So welcome, welcome. Welcome everyone to Episode fifty one another Milestone episode. Today we have an exciting guest on the show, the CEO of Hard Bacon, Julien Brault. Welcome to the show, Julien. Thank you. So we're super excited to get the podcast started. We have a great plan, some interesting questions in mind to answer you. One of the fastest growing financial coach, personal finance apps in Canada at the moment. So great to have you on the show. Why don't we kick things off with, you know, just telling us a little bit about hard bacon and your background, how you got started, what's what's going on?

 

Julien Brault: [00:01:37] Perfect. So I used to be a business journalist and I was covering technology and venture capital. And honestly, like I saw, like the financial service world, as you know, one of the last dinosaur industry still standing because, you know, we've seen like retail and it's been a while since retail and travel and a lot of industries like have been completely transformed by technology. And I think right now, like I think it's right to say that there's still a lot of transformation to happen in the financial service industry, but it is definitely being impacted by technology. But if you go back to like 2016, 2015, when there was a still a reporter, it seems that FinTech was a word, but it was so much smaller, like fintech investments, numbers were so much smaller. It was a tranditional industry where, you know, advisors take their car and go to their client's kitchen. And so I was really interested in doing something. And another thing that I felt was unfair is that as a business journalist, I had a Bloomberg terminal and I had access to all the information. And yet, like the subscribers to a newspaper, usually they had what's free on the Internet, which is not so much. And I felt I wanted to do something about it. And honestly, I'll be honest with you, like I didn't have the vision for what Hardbacon have become today. All I wanted, you know, at the very beginning of Hardbacon. Let's solve the problem of self-directed investing. Let's give them better tools and better data. So the the they make better investments. So so that was the kind of this initial thesis for Hardbacon. And, you know, I'll let you ask me more questions to discover with our is today.

 

Craig Asano: [00:03:38] Well, the cold focus on consumer retail investor, that's very interesting. I mean, there's so many trends right now in the market, it seems, with cryptocurrency. And combine that with the remote working covid and maybe it's some of the stimulus checks that are going out to the markets. People are at home. They're downloading the apps they're they're interested to. And they have all the digital tools these days. Like you were saying, I'd like to get into about the what about hard bacon? How do you come up with a name like that? Like I said, that doesn't jump up financial coach to me.

 

Julien Brault: [00:04:17] Yeah. I mean, it's like bring home the bacon, the expression so and, you know, cold, hard cash like that was the true expression. I kind of mix together. And the idea is that hard bacon with all these always tell you the truth. And, you know, and the idea of like hard cash, you know, like cash doesn't lie. And I as a reporter, you know, saying is like, follow the money and you're going to understand the story. So that was kind of the idea for hard bacon. And also, I needed to to have like I didn't have so much money in the beginning, so I couldn't buy for ten thousand or fifty thousand dollar premium domain name. So I needed, you know, a word that nobody reserves in terms of domain names. So Hardbacon.com and Hardbacon.ca were available and I snapped it.

 

Craig Asano: [00:05:05] I love it. I didn't I guess that That's it that hard bake in the cold cash, the digital bacon...

 

Julien Brault: [00:05:14] I mean, it's not a first name I came up with, you know, but it's the one that and people remember it. It's funny a little bit. So people never forget about Hardbacon.

 

Craig Asano: [00:05:27] And absolutely. So one of the things we like to do on the show is always dig in a little bit about the leadership and, you know, some of the decisions that CEOs may need to make because you're steering a ship, you're on this path of tremendous growth ad the market's ripe and ready.  Talk to the listeners a little bit about the journey between how do you you know, you transform from a business tech reporter at one of Canada's largest magazines or newspapers, Les affairs, and now you're running...you're the CEO of the fast growing fintech. How has that transformation and what are the challenges and how do you overcome it?

 

Julien Brault: [00:06:11] Yeah, I mean, it's it's a very different job. But I would say, like being a journalist, you need to be very curious. You need to be listening. And I feel those those characteristics, you know, you need to be a good networker to get the information you need. So those kind of 2-3 skills are really useful for starting a business to be an entrepreneur, but it doesn't prepare you to be a manager, which is something entirely different. And so, yeah, I mean, it's quite different than as it grows. You know, the problem are always different, but it's been a rewarding experience and I learned so much. But I think it's the same for every entrepreneur. You make mistakes, you improve, and then you surround yourself with great people that have expertise that you don't. So that's the key.

 

Craig Asano: [00:07:03] Absolutely. We hear that time and time again. Got to surround yourself and also listen to those core advisors and everyone, you know, the CEOs got their head down building products and maybe just can't see the forest from the trees, as an expression. So that's great. It resonates, I think, with the audience here. I'd like to get in a little bit more about the business model. This is like let's break down the whole financial coaching and talk a little bit more about the app. So I downloaded it. I got it on my phone. Looks very slick. Good UI what's in there and what is the user experience? What is it trying to accomplish.

 

Julien Brault: [00:07:43] So basically are vision is to to answer any question that you may have about your personal finance and to be more concrete, basically like we started with tools for self directed investor and that's when the app launched in 2018. So it connected to all your investments investment. Can I use the past tense. But actually it still does all those things. So we started with with an app, a basic connector, investment accounts. You can build a watchlist, have stock alerts, you can analyze your portfolio, check out what's beta, what's the diversification and so on. And you can also consolidate different investment accounts. You can have a view of like what's my return, where my return come from and so on. So that's on the investment tracking side. But we realize that the main problem of Canadians, we're not about tracking better our portfolio. I think it's a problem. But oftentimes users don't have enough financial literacy to realize that they should track better their investments and it doesn't talk to them. So in terms of we have the kind of customer acquisition problem and most of the users, the early users of Hardbacon were either accountants or portfolio managers. So and we set out to build like, you know, a mainstream app that helps regular people make better financial decisions. So we look at the different problem that regular people encounter when it comes to finance. And then we identify like planning and budgeting us to place where we could create tremendous value in terms of allowing people to to take better control of their personal finance. And that's what made what's today Hardbacon. So basically, by connecting your bank account and your credit card accounts, you can see exactly where your money goes. You can set limits. So it gives you alert if you're on the path to kind of go over budget. And you can add a couple of your goals and it does the whole plan for your life,, and tell you if you're on track or not. So basically, it's kind of a one stop shop to to maintain your personal finance. And in terms of monetizing that, for us, it's lead generation, so Hardbacon will help you find the credit card that give you the best cashback or reward. And we calculate it based on your actual current behavior. And if you sign up to one of the card of our partners, we get paid a referral fee. But if the best card for you is actually, you know, from an insurer that we don't work with, we're still going to tell you and we're not going to make money this time. But the idea is that you're going to get value from it the next time you want the financial product or you have a question, you're going to go through Hardbacon. So I give the example of credit card, but we do the same for online brokerage, robo advisor, bank accounts and so on. So it's so so basically the way to monetize that is lead generation. And it's not like we invented that.  Borrowell is based on the lead generation model for for loans, you know, and you have like the in Canada, ratehub.ca and the the rates that So yeah in the US, you have nerdwallet and this is those are all businesses main monetization come from lead generation.

 

Craig Asano: [00:11:11] So are you so your heart breaking is primarily focused on consumers, even though you've got all kinds of financial professionals on their accountant's portfolio managers since you brought it up, those competitor names, it sounds like the nerd belts and others like how so? They're focusing on businesses. You're focusing on consumers. Maybe there's some overlap. Talk to us a little bit about why you're different. Why should a consumer and what is the demographic what at what point in their their life cycle...you're talking about an app that they download and they're using it daily for their entire life as it is as it sounds, you know, who's actually using the app? What is the feedback and how do you how do you stand out from the competitors? Where's that real niche?

 

Julien Brault: [00:12:03] It's a good question. So the target market is 25 to 45 years old. And, you know, it's a target like most of our users are in that bracket. I would say, like a lot of fintech say, they're focused on millennials and we obviously target like, you know, an important portion of the millennials but 18 year olds don't really think about, you know, don't earn much money to think about managing it better. So we found that, you know, you need to have kind of a good paying job to be in the mindset of thinking about your finances in a more holistic way. So that's why the kind of a twenty five. And I would say, like, after a certain age, you start to, you know, right now we're mobile only and we're building the Web version. But after 50 year olds, users ask us like, oh, finance is serious.  I Would never do that on my phone. Also, the sense you need to link that accounts, I would say, like in the 50 years old and plus crowd, some people don't want to link their accounts. So that doesn't mean that we don't have 70 year old users, but most of the users is this bracket. As for your other question, like how do we differentiate? I would say like we don't have there's not the company that does for consumers exactly what we do, especially in Canada. I would say that are budgeting apps in Canada. So there's Mint. There's Emma. There is I think you need a YNAB is connecting to Canadian banks as well. So those are budgeting competitors in a way, but they don't connect to most investment accounts in Canada. And even if they do connect to some, you don't know what's going on. It just give you a number so you don't have your position, your return, etc.. So so they only do budgeting and we do investment tracking and financial planning. And basically there's no one doing all of those things for the Canadian consumers.

 

Craig Asano: [00:14:12] Right. So when it comes to the investing, it's an area that I'm sure a lot of listeners here are interested in, retail investors, credit investors, and they've got the app. They've connect. Do they have to connect their accounts? And can you make an investment directly on the app or do you have to, you know, juggle six apps and then enter them into Hardbacon? And how does it That's it technically work there?

 

Julien Brault: [00:14:37] So you need to the same way that you cannot buy anything using the Hardbacon app like you buy something with your debit card or credit card in the account of the link to Hardbacon. The same for the investment. So you come to Hardbacon to monitor. You know how your portfolio is doing across one or many investment accounts and you have like portfolio analysis. You might get alerts by the end of the day if you want to to to buy a stock or sell stocks, you need to connect to your brokerage account, whether it's true or not. Like, Wealthsimple trader or through the portal for people that work with advisors that don't have a portal, they need to call them. But we still connect to traditional as well, not only online brokerage, but if you work with BMO Nesbitt Burns or, I don't know, like Fidelity, we connect with those guys. But, you know, Hardbacon is not the brokerage and it's not the transactional app.

 

Craig Asano: [00:15:34] Right. It's almost like a Fitbit tracker for for finance and the financial transaction to do. And it's combined with the budgeting and the portfolio management all in one convenient place.

 

Julien Brault: [00:15:47] I like that. I like the idea of like getting financially fit. Maybe we can use this in our marketing. I like that.

 

Craig Asano: [00:15:56] There you go. I'll give you my day rate. What so the the idea that you kind of pivoted, you started investment and then you realized, well, you know. 25-40 year old this is. Things and maybe a debt problem in Canada with the challenges of covid, can you talk to us a little bit more like what is going on with Canadians? Why are we such bad savers or what is what is going on?

 

Julien Brault: [00:16:24] That's that's human nature. And it's interesting, you know, coming from a more modest background, I felt like people that make like huge salaries, you know, like one hundred two hundred three hundred thousand dollars, you know, I thought they were kind of, you know, my innocent self thought, like they are rolling into cash and they have no problem. Actually, having talked to so many people about their personal finance, I can see that, you know, most people spend exactly what they're earning and it's human nature and it's actually been studied in many university studies, like we have a tendency to spend everything we make to in the hope that it makes us happy and it's problematic, obviously. And it's even frustrating, like, I'll be honest with you, like when we started the lead generation, I didn't know that credit card would have been such a strong, you know, growth verticals for us, like the average kind of Canadian has three credit cards. And, you know, there's so many and, you know, credit card to what is by far like the vertical in which we do the most lead generation. And to be on this, given our mission to to help people get richer. I don't like this at first. Right now, like, I'm quite comfortable with it because at the end of the day, you know, the user or technology to get credit card, that made them more so. So, you know, it's good. But, you know, it's still worrying and you cannot change human nature. You can kind of, you know, nudge people in the right direction and remind them about savings. And that's what they're about us. But at the end of the day, you know, humans want instant gratification. And it's kind of a struggle to to to to save money. And, you know, so that's that's my answer.

 

Craig Asano: [00:18:25] Well, I mean, it's easy come, easy go. You know, we've all been there and some days you think there's this perception I'm better off than I was yesterday. But if you blow it on something that was unexpected, unplanned, or make a poor emotional decision when it comes to finances, you'll get in trouble. So not surprising that credit cards are so, so popular there. But we're moving into a completely digital world with digital payments, digital investing. And, you know, with all the new technologies like what's your take on where will be the savings problem and its impact on the retail debt as we move digital, like we're talking about digital currencies, including CBDCs. Have you have you thought about it like what is your take?

 

Julien Brault: [00:19:20] So, I mean, I don't know, human nature doesn't change, what's changed is technology, so yeah I mean, we see like in the market, like a lot of, you know, payday loans is moving digitally, but it's still the same thing as, you know, and it's kind of a little bit predatory loan, to be honest, with people that are struggling to make ends meet. And then you give them a product with high interest and fees. So, you know, we're going to know all our problems are not going away. I think that, you know, it's easier to to spend more. It's even easier with technology to spend more money when it's on the credit card versus paying cash. And studies have proven that people that spend everything in cash kind of save more money. And actually heartbreaking is the tool that, you know, making a budget and, you know, having it and knowing that I'm making that much money, I'm spending that much money is really important, because if someone don't look at their bank account and a lot of people are like that, they don't look at the bank account. They don't read. They're they're they're payslip. And at the end, they end up spending, you know, more or less exactly what they're earning. So in order to save, you need to kind of take ownership of your personal financial situation so you don't need technology. Some people do this by you know, I've met people that actually write in a little paper notebook everything they spend. And that's a good practice of being kind of mindful about what you're spending. And, you know, technology are like Hardbacon. We can just make it easier to to manage your money. But honestly, I don't think technology will either create so much more problem or solve all the problem. I think is just, you know, an evolution of human nature doesn't change. But I guess Tool will be there for people that want to be really great at managing their money. So it's going to be easier than in the past and putting everything down on a paper and, you know, getting in brokerage accounts used to be expensive and complicated. And you need to have connection.  Today, you can download an app and start right away without basically any capital. So it's easier to be like financially responsible and it's easier to be financially irresponsible.

 

Craig Asano: [00:21:39] Yeah, I think you're right. I mean, tech can streamline and make an experience pretty, pretty slick, pretty cool, accessible, but it's the human behaviour. So maybe if we combine some technologies we can work towards curbing the human behaviours. As far as savings and investment concerned. I feel great now that I know and I'm tracking that. I've benchmarked my value and I'm a little bit up, and I've saved a lot more this week and cumulatively it's growing. And I've got my kids on that program set up RESPs the other day. So I think it's that instant gratification when you spend something and some people feel good about that, you should equally feel good when you're saving or your wealth is growing or your knowledge is growing. So I think you're on something.

 

Julien Brault: [00:22:30] Craig, I'd like to make a point that because statistically there's this huge debate in the wealth management world where they say, like retail investors should just invest in index investing. And actually the side of the debate is right. Right. Most people shouldn't pick stocks because they're not good at it. It's very hard. Even the most professional, you know, after fees beat the market. So how retail can is a very good question to ask yourself. But I actually like you know, if you're thinking this in terms of like, you know, trying to beat the market and people that do a lot of transaction and then losing a lot of money, then you can say it's stock picking is bad. But another benefit of stock picking is that you feel like you bought something. And there's kind of instant gratification. And the cool thing is that this thing you just bought, you know, is going to give you dividends sometimes and it's going to grow. So that's one of the aspect. And, you know, I'm not saying everybody should do stock picking, I think. And that index has that investing for rational people that just want a solution that is going to get them to market. Similar return is great, but I feel like if people want to invest in company they believe in, they just have to build a diversified portfolio, and you know, 10, 15, maybe 20 stocks and not trade them, just sit on it because they're good companies and they might get a little less than the market's return. They might get a little more. But at the end of the day, it's going to be similar to the market if it's well diversified, even if it's less diversified portfolio that have maybe an exposure to a thousand securities just with like twenty securities, you can you're going to get a return that are going to look more or less like the market as a whole, unless you just you know, you just invest in the same sector or you invest in just like penny stock or something like that. But I think it's another solution that kind of feed our instant gratification sense. And it's like, oh, I just bought some some stock and I don't know, like Facebook or something. And then you feel good.

 

Craig Asano: [00:24:44] Well, people like talking about it in the different circles by the Water cooler, but they have to take control. I think it starts with education. And really that's a core linchpin to, I think your business model, because you're training, you're changing behaviour, but you're educating, and it touches upon a very timely and sensitive topic in the areas of open finance where consumers are going to have more access and control and ownership of their data. Open finance. Perfect example is these emerging regulations in Open banking, consumer directed finance, like do you do you think that that that movement or that that need that consumers should be it should have that right to control and have access to their data and let's say not the financial institutions? What is your thoughts on open finance and consumers taking control of their their own data, their own financial data?

 

Julien Brault: [00:25:47] For me, it's obvious that people should own their data and should decide who have access to it and how and why. And right now, it is just like the whole industry, whether it's us or another fintech that's use bank account connection. And it's quite mainstream, like millions of Canadians are using those technology, whether it's through Hardbacon through Mint, through like a loan application. And basically what they do is that they give their username and password to a third party. Obviously, it's very secure. Like most whatever the fintech app, it ends up being the same provider, whether it's like apply the Flinks that makes it through. But it would be much better if they just connect to their financial institution and they say, I allow Hardbacon to access this specific account, but I don't want Hardbacon to be able to transact. I don't want hardbacon to see my mortgage for some reason. I don't know why, but it's their data. So it would be much better, and also, like companies like FinTech, like us would have like a better infrastructure to connect with because we would be talking directly to the banking system and instead of relying on third party that connect to the bank account and spread information. So, obviously I'm all in favour of open banking and Canada tend to be, you know, a few years late to the party. So I'm not expecting this year. But there's some talk, as you know, the federal government level and I think sooner or later is going to happen.

 

Craig Asano: [00:27:23] And is that going to have a significant impact once those regulations? You know, it's not an if it's it's really when they come to market, are you going to you know, you really have a digital finance platform. What do you envision? Let's say open banking regs are here today. How is that going to change your model?

 

Julien Brault: [00:27:44] So, one, I think it's going to accelerate the adoption of those technologies so more people will be comfortable connecting their bank account investment accounts with third parties for sure. So it's going to help us in that way. I think reliability of those connections will improve as well. And we've seen this in Europe where open banking is actually a law. So it's going to be good for us. And finally, I think we're going to see, like, you know, a lot of new business model. And, you know, another thing that makes so much sense is like why there's no App Store in your banking portal. You know, you have all those tabs and it look like a software from the nineties. And actually, you know, those software are used by millions and millions of people. Obviously, you know, there's like five big banks in Canada. Most Canadian are there. And it would be great if there would be like, you know, a tax software that you can do your tax directly from your bank account, maybe like a budgeting software, like Hardbacon. So I feel sooner or later, like a financial institution will open an app store based on the fact that there is open banking and those third party can connect safely to those data. And I think it's going to be like a new era of growth for the fintechs. And at the end of the day, like, most banks don't want that. But once one bank does it, you know, they're going to have a huge competitive advantage. People will love, you know, having a better service. And, you know, other banks will either imitate them and have their own app store or, you know, this bank, that this kind of an early adopter will kind of, you know, have even bigger market share. And we've seen this with the phone markets, with iPhone basically killing BlackBerry because people wanted. I think people want to help with their finance, with their tax and other stuff. And I think fintechs...that's their their core expertise is software. Bank core expertise is risk management and finance. And those are it's hard to be great at software and be great at risk management and finance, and compliance. So that's my take. I know the order fintech are taking the route of building their own financial institution with more focus on UX and technology. But my take is that it's the different muscle and there's going to be great software company and great financial institution. I'm not sure if, you know, banks are going to be fintech and fintech are going to be banks. But anyway, that's another debate.

 

Craig Asano: [00:30:38] Yeah, I mean, big tech. Well, if the banks don't do it, you know, create a super app like what's going on in China, the integration, if we WeChat and Alipay you know, story after story, I mean, we have my sister-in-law over there. Who's country manager SWIFT. They have super apps and they have really done away with cash. Everything's completely digital order everything. And if you look at those apps, it is really what the super apps, it's just littered with icons and you can do a tremendous amount of servicing.

 

Julien Brault: [00:31:12] So and the model that we see is that it's much more present like in the US or in Europe where there are financial institutions. Like what is a brokerage or a bank that have an API and don't even serve clients. They serve clients, third parties. And those fintech that want to be a financial institution will offer the service but at the end of the day, you know, it's a financial institution that's actually managed the risk management and the finance behind and they connect to it and they are the front facing, you know, element of delivering the service. Like that's not the business model of Hardbacon, Hardbacon doesn't want to, you know, be your bank accounts or sell you a mortgage. We want to help you find the best bank account and manage your money. But we don't want to do this service. But I definitely think there's going to be no bank and so on. But my point is that I feel those are very different expertise. And, you know, I think fintech, you know, do fintech and bank or financial institution, maybe there's going to be new a new charter bank that is going to incorporate for that specific purpose of offering the service as kind of a back in and That's having clients. But I feel it's very hard to be good at everything at the same time, especially in the industry, as regulated and complicated as the financial services industry, huh?

 

Craig Asano: [00:32:39] Absolutely. OK, well, shifting gears a little bit here. I happen to know that, you know, very exciting news that your a couple weeks out or week out, you've got to live fundraising equity crowdfunding campaign on the go with one NCFA's partner platforms, Frontfundr. Can you tell us a little bit and this isn't your first equity crowdfunding campaign. So you're you're like an expert of experts. Can you tell the audience about the experience and what you learned? What do you think? How's it going?

 

Julien Brault: [00:33:11] Yes. So, I Mean, equity crowdfunding is basically, you know, raising venture capital, except that there is much more people that participate in the round. And also, we have the chance to use a platform called Frontfundr, which kind of, you know, automates the process that would basically be done by lawyers because you would meet an investor and then he's like, oh, sure, I'm interested. And then there would be a back and forth. They make investments, contracts or a subscription agreement, to be precise, and then they send it over to signing it. They make sure that the money is in the in the bank account and so on with Frontfundr. The cool thing is that since, you know, the ultimate most of the those steps you can you know, in the traditional round, like if someone wants to put ten thousand, like usually the minimum tickets can be $25-50k CAD, depending on the size of round, some round is going to be millions of dollars. Then it's, it's removed that this need to have like a minimum ticket size. So like in this current round we accept from we had investment from $500 - $50,000 CAD. And it's not more work on our end, I guess it's some work for Frontfundr because they still have some regulation to to comply to but and also it's a great opportunity to do kind of a huge marketing campaign. And in our case, it's going to serve us because we're, you know, targeting B2C, people that's wants a tool for managing better their money. So there's kind of an alignment. And actually a lot of our users, you know, invest in the wrong and potentially a lot of investors that we that came to us from Frontfundr are our users now. So there's kind of a, you know, a synergy here. You know, it's around that allows you to kind of get better known in the country. So so for us, it makes sense. It might not make sense for any company.

 

Craig Asano: [00:35:16] Yeah. The network effect, one of the that was a huge marketing benefit. And anyone who does invest five hundred dollars or a million dollars, whatever it might be, you know, there they are taking control, just going back and touching upon some of those notes that we talked earlier in the podcast there, they're feeling excited about their direct investment. They feel connected to it naturally, they want to talk about it. So all things considered, That's, it sounds great. The automation of a venture capital transaction meets marketing and networking and the things that businesses need to operate. So as part of preparing for the podcast, we do the research. And, we know you've done the equity crowdfunding. We know you're also interested in this, the IPO route. Yeah, maybe compare and contrast. What is your thoughts with going IPO? Why do you want to go IPO? And it's going to be an evolution. And, you know, the interesting thing is it's not really cannibalizing equity crowdfunding. It's complementary. It's an escalator. Right. It's a funding escalator for a lot of companies that are on this path to success. So what are your thoughts on IPO?

 

Julien Brault: [00:36:28] So I just want to precise something my my Lawyer told me to be very clear about that we did not file the prospectus yet. So what we said is that we have an intention to go public in twenty, twenty one. And I just wouldn't want any of your listeners to think that we have a prospectus and we're raising for the IPO right now because that's not the case. But saying that, like, I'll explain to you the rationale basically like, you know, raising money through equity crowdfunding. We did this through an offering memorandum. So basically it's a long document that look a little bit like a prospectus, but it's a little less long and less complicated to produce. And we having done that, we have more than 50 shareholders, so we still need to have, like, audited financial statement every year and file transaction on SEDAR. So there's a lot of like regulation that are usually apply only to public companies that apply to private company that went through equity crowdfunding. Another thing that is very costly for a company to go public is and that's why there's so many companies doing RTOs, which is basically like they get bought out by empty shelves listed on the stock market to go public. It's because you need, depending on the stock market, like one hundred fifty or two hundred shareholders and you cannot raise from regular people.  We kind of solve that problem. We did raise through non-equity this investor using the crowdfunding exemptions. So for us like to step between like, you know, the status quo and not being public and being public is not so big as you might think. There are some fees for for listing and some some some fees as well on the broker side and lawyers and so on. But it's it's much less complicated now to go public than it used to be. So that's one of the reason. Another reason is that there's a lot of appetite on the public markets for technology play and even early stage companies, which is crazy. Like traditionally, you know, VCs were funding the very early stage companies. And then when they were big enough, they would list on the stock market. Now it's a little bit like a crazy world where there are companies that they list and there weren't forty fifty billion dollars. And that as private companies and the list not to finance themselves, the list just for their investors to exist. And I feel like right now, and this is particular to 2020, there's more early stage capital in the public market than in the private. So that's one thing. Another reason for doing this is that we want to consolidate the lead generation market in Canada and, you know, being public, you have an ability to quote unquote, print money.  It's not a bank charter. It's not as good. But you can issue stocks and you can make acquisition with your stock. So so it can of open possibilities in terms of making acquisitions. And that's part of our play as we want to buy like business that have traffic in the personal finance space but don't have technology and just put our technology that helped people find the best product that they want. And so so we're going to get some synergy. And finally and then I stop talking is that, you know, the sales to the sales ratio for or for media company or online media company in the public markets is about 1X. So if you make like a company that makes one million in revenue is going to be worth a million. This is for online media, for fintech, it's like about 15X or 30X. So there is kind of an opportunity for us, as you know, once we become a public company in the future to to basically acquire online media, get their traffic of people that have questions about their personal finance and kind of transform this revenue from media to technology. So that's that's the play here.

 

Craig Asano: [00:40:52] Well, that's a lot of reasons, a lot of good reasons. So, I mean, you're at a very exciting time for Hardbacon. Is the ticker symbol going to be bacon?

 

Julien Brault: [00:41:03] I don't know. I mean, we need to first, you know, it's the exchange that is going to decide and since we didn't file for the prospectus, we don't have the you know, we don't have the acceptation letter from the exchange, though, so we don't know. But, yeah, I have a couple good ideas.

 

Craig Asano: [00:41:25] That's awesome.  We'll certainly be following the developments in growth. So we're sort of getting towards the end of the podcast here. I was thinking we always do some speed round questions, but before we do, I wanted to just give you an opportunity to talk about the future vision. And are you looking for any partnerships? How can our audience maybe help Hardbacon achieve some of its goals and also collaborate and participate in success. Are you looking for any partnerships or what? Where do you see her taken in the next three to five years? What's coming down the pipeline?

 

Julien Brault: [00:42:06] So that's a lot of question. At the same time, like for partnership. Yes, we do widely both for financial institution. So basically, if you have listeners that are executive, a financial service company that want to do planning, budgeting or investment tracking, you know, they can reach out to me and we can talk. But at the end of the day, like this is about the personal financial data. So what's coming next is is like one of the things that we don't have in terms of data, as is credit score. So that's the thing we're going to add to the Hardbacon app. And the vision for for the future is that we want people to equate hard as the place where they go to answer any question about their finance that they have. So if you ask me, like five years from now, I hope, you know, we can help people do their income tax. I hope that's heartbreaking. And, you know, maybe you can ask a question to Hardbacon through a chat interface and answers you. It's like, should I change jobs? What's going to be the impact on my retirement, if I get this job instead of this other one? And then Hardbacon is going to help you make the decision. So, you know, I feel like kind of a longer term question. So those are not features that we have and those are just examples. But the ideas that we would like that, you know, every time you want to buy something, you're not Googling your go to Amazon and you buy it. So every time that you're thinking about buying a financial product, you know, making a financial decision would like people to just stick their phone or maybe ask one of those assistant like Siri a question and then hard bacon would, you know, help you make the decision?

 

Craig Asano: [00:43:53] I think it's perfect. Now, that's a great, great idea. Education and you're connecting experts who would love to provide advice, but those that need it and hopefully we'll be able to solve through the app and the people and the advice, the savings issue and the debt issue that we have here in Canada, and do so much more together. So, OK, our favourite part of the show, it's the time for the speed round questions. We're just going to fire some some rapid fire questions and we're just expecting a short on top of the mind kind of answer. You ready? Yeah, sure. OK, so what do you what do you prefer, Android or iOS?

 

Julien Brault: [00:44:34] IOS.

 

Craig Asano: [00:44:36] I'm Android my whole life. I'm so old school. I gotta get on he Apple.

 

Julien Brault: [00:44:41] I actually was an Android guy. And then the first version of the Hardbacon app was that iOS App. I had to change because I was doing so much demo and as I get older, I'm kind of lazy in terms of changing OS. So now I'm not using android anymore.

 

Craig Asano: [00:44:56] Ok, what's your what's your favourite beverage?

 

Julien Brault: [00:45:01] Coca-Cola and Coca-Cola.

 

Craig Asano: [00:45:03] What gets you most excited to come in to work every day?

 

Julien Brault: [00:45:07] Oh, learning new things.

 

Craig Asano: [00:45:10] Nice answer. What advice would you give yourself, an 18 year old version of yourself, you know, at this point in your life, what would you say to yourself?

 

Julien Brault: [00:45:19] Hmm Be less impatient?

 

Craig Asano: [00:45:21] Less impatience. It's a good one. If you had any superpower, you know, you could fly super strength. What would it be and what?

 

Julien Brault: [00:45:29] Oh, I'd like to to see through walls, because I feel information is power and everything I did in my career was related to democratizing information and, you know, seeing through walls with maybe hearing walls would be even better.

 

Craig Asano: [00:45:47] That's dangerous stuff. They better try the Privacy Commission, if you could. If you could if you found a ten million dollar lottery ticket on the ground, you found a and it turned out to be worth 10 million. What would you do with the ten million?

 

Julien Brault: [00:46:03] Which would I guess I guess I would probably, you know, and it's a funny question, because I would probably invest it in my company. You know try to buyout investors because I think it's going to be so valuable. But, you know, I'm not doing this for money, but I don't know, maybe that or maybe buying a house or something.

 

Craig Asano: [00:46:32] Well, you'd be better off buying a house in the pandemic. We've got some crazy over list prices. Yeah, you can ask me all about afterwards. OK, well, I think, you know, that's that's almost a wrap here, which is the last question I want to ask you is if people want to get in touch with you, Julien, how do they do it? Where do they download the app? How do they find you?

 

Julien Brault: [00:46:57] That's a good question. So they can just go to if they have enjoyed it like you, they can go to Google Play and type Hardbacon iPhone, the same thing, the app store, they want to reach out to me. It's Julien@Hardbacon.com and they can email me at me on LinkedIn. So that's a that's about the different things they can do or go to our website. They can shop for financial products. So right now the website doesn't offer the budgeting and so on, but it's already offers the shopping experience for financial product.

 

Craig Asano: [00:47:32] Perfect. And of course, I'm going to include your contact information in the show notes for anyone who to get in touch with you. Thanks so much, Julien, for sitting down with us on the show. It's been great. Love to have you back any time and behalf on behalf of the Fintech Friday's podcast. Thank you. Thank you. Thank you. So if you're new to FinTech Fridays, please check out some of our incredible past episodes on the site. You'll be surprised what you find. We look forward to seeing you next Friday for another episode of FinTech Fridays. Have a great weekend, everyone. Thanks, Julien. Really appreciate it.

 

Julien Brault: [00:48:09] Super appreciate it.

 

Outro : you've been listening to Fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and Fintech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit ncfacanada.org. Oh yeah.

 

End of Podcast

 

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NCFA Jan 2018 resize - Fintech Fridays EP51:  Bacon and Eggs 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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Self-driving Banking

Financial Times | OpEd by Brian Brooks | Jan 12, 2021

Self autnomous banking - Self-driving BankingLenders run by algorithms and blockchain technology will require 21st century regulation

The writer is the US acting comptroller of the currency In 1961, Popular Science magazine envisioned self-driving cars.

The reality arrived sooner than anyone anticipated, and before safety regulators could adapt. Most automotive laws — on speed limits, giving signals, drink-driving — had been designed to protect against dangerous drivers, not dangerous cars. Autonomous vehicles brought new risks that legacy rules never considered. As one headline on the Wired website put it: “Who’s Regulating Self-Driving Cars? Often, No One”.

Banking is headed down the same road. And it’s being driven by the technology behind decentralised finance, or DeFi. But just as the original rules of the road protected us from other drivers, so our current bank regulations exist mainly to prevent human failings.

See:  Intro to yield farming and the latest developments in DeFi

At the US Office of the Comptroller of the Currency, we require every bank to have officers responsible for its safety — such as a chief risk officer and a chief audit executive. We limit how much banks can lend to their directors. We even make some bank employees take a certain amount of vacation so others can sit at their desks and identify potential fraud. We call it bank regulation, but we’re really regulating bankers.

DeFi turns all this on its head. It leverages blockchain technology to deliver services with no human intermediation.

One example is creating money markets with algorithmically derived interest rates based on supply and demand — rates that traditional banks set by committee. Other DeFi projects include decentralised exchanges that allow users to trade without brokers, and protocols for lending that do not involve loan officers or credit committees. Although these “self-driving banks” are new, they are not small. They are likely to be mainstream before self-driving cars start to fly.

However, self-driving banks present the same challenges and opportunities as autonomous vehicles. On the opportunity side, they can allow savers to stop shopping around for the best interest rates by having algorithms do this for them. They can also end discrimination against certain borrowers by having software make credit decisions. They could even eliminate the risk of fraud or corruption by no longer being run by humans at all.

See:  Interested in a High Interest Bitcoin Saving’s Account? Interview with Ledn CEO, Adam Reeds

Self-driving banks also present new risks, though. If technology accelerates withdrawal of depositors’ funds, just as high-frequency trading can accelerate equity sell-offs, that could increase liquidity risk compared with traditional banks. Asset volatility could be a concern for similar reasons. And the management of loan collateral could be more difficult if humans are not involved in valuations.

There is also a risk that, in the absence of federal regulatory clarity, US states rush to fill the void and create a patchwork of inconsistent rules that impede the orderly development of a national market. This is exactly what happened with self-driving cars. Federal regulators must therefore determine what a regulatory scheme for self-driving banks should look like. Could they ensure fair treatment of customers by such a bank? Sure.

Continue to the full article --> here

 


NCFA Jan 2018 resize - Self-driving Banking 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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How to Streamline Your Business Using Technology

Guest Post | Dec 21, 2020

Streamline business productivity using technology - How to Streamline Your Business Using Technology

An integral goal of every business manager should be to maximize profits and get the most out of their investment. Streamlining your business processes is one of the most effective ways to improve efficiency and increase your bottom line. This will help you drive sales revenue and achieve your organizational goals and objectives. Modern technology can help companies streamline various processes and activities including project management, customer support, and production. Here are some keys areas of your business that you can streamline with technology.

See:  The Enterprise Automation Imperative—Why Modern Societies Will Need All the Productivity They Can Get

Inventory management

Managing your inventory can be time-consuming and complex. In the past, it was common for a customer to place an order and then be told that the item they ordered was no longer in stock. This often led to frustration and negative customer feedback. Nowadays, companies can install an inventory management system that monitors stock and provides real-time updates of products as they are sold. This technology allows businesses to keep on top of their stock levels and order new products as and when needed. According to assetinfinity.com, investing in an inventory management system can also reduce inaccuracies and errors, improve productivity in production, and increase the order fulfillment time. This should result in happier customers and an increase in profits.

Employee engagement

Business managers should place high importance on employee engagement. Engaging employees is fundamental to retaining skilled staff, improving workplace morale, and maintaining good productivity levels. Employee engagement will play an integral role in your company’s success, so you should create strong strategies designed to engage your staff and boost productivity. Managers have access to an expansive range of technology and tools designed to increase employee engagement. For instance, automated transcription software can be installed so that employees are no longer required to take notes in business meetings. This means that they can engage fully in the meeting without becoming distracted.

Customer support

Technology has revolutionized the ways that companies support their customers. In the past, customers would have to email or call a company’s customer support center and wait for a response. This often led to delays and frustrated customers. Nowadays, companies can leverage technology to manage their customer support. For example, chatbots can be installed to offer live chat services 24/7. This makes it possible for customers to get fast and efficient answers to their questions or queries. Customer support technology can also improve productivity as it means that your employees won’t need to spend time answering calls or responding to messages from customers. Investing in customer support technology will streamline your customer service processes and boost the efficiency of your customer interactions.

Internal communication

Along with improving external communication, technology can also be used to boost the efficiency of internal communication. Employees can use a broad range of tools to improve their communication in the workplace. Apps like GoToMeeting make it possible to organize remote meetings and you can use Skype or Google Meet to speak to your colleagues from anywhere using high-quality video technology.

 


NCFA Jan 2018 resize - How to Streamline Your Business Using Technology 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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Does FinTech Substitute for Banks? Evidence from the Paycheck Protection Program

Ohio State University - Fisher College of Business | Isil Erel and Jack Liebersohn | Sep 20, 2020

Banks versus fintechs - Does FinTech Substitute for Banks?  Evidence from the Paycheck Protection Program

Abstract:

New technology promises to expand the supply of financial services to borrowers poorly served by the banking system. Does it succeed? We study the response of FinTech and nonbank lenders to financial services demand created by the introduction of the Paycheck Protection Program (PPP).

See:  How will Canada reinvent its payments framework for a post-pandemic digital reality?

Online banks and nonbank financial institutions are disproportionately used in ZIP codes located with fewer bank branches, and in industries with little ex ante small-business lending.

Their role in filling this lending gap is also magnified in counties where the economic effects of the COVID-19 pandemic were greater.

Using the predicted responsiveness of banks to the program, we show that borrowers were more likely to get a FinTech-enabled loan if they are located in ZIP codes where local banks were unlikely to originate PPP loans.

Download and view the Report --> here

View more Fintech Research and Industry Reports --> here

 


NCFA Jan 2018 resize - Does FinTech Substitute for Banks?  Evidence from the Paycheck Protection Program 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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How to Make a Great First Impression With Investors

Guest Post | Nov 8, 2020

Pitching and presenting to investors 300x150 - How to Make a Great First Impression With InvestorsWhen you first get into launching a startup, one of your most important responsibilities is going to be to secure investment – especially if you have a big idea that requires a significant level of funding. The first stage is going to be securing a pitch. Once you have this in the bag, you then need to prepare to make your first impression, which can end up being crucial in an environment such as this one. With this in mind, let’s look at some of the ways that you can bolster that first impression to live long in the mind of your potential investors.

Send Information Beforehand

While you want to leave the real detail of your presentation to deliver in person, it can’t hurt to prime your potential investor with some information beforehand. For example, if you already have a website set up, this can prove to be a concise way of getting some of your core messages across. If not, you could enlist the support of Airdrie web design. Alternatively, if you have any brochures, leaflet or other company material, this can also prove to be useful and informative.

Prepare Your Pitch

Your pitch needs to be note-perfect, and this means that you should have rehearsed it many times beforehand. You need to grab your investors right from the start. While you don’t want to drag it out for too long, you still need to provide enough content in the pitch to give potential investors confidence that you know what you are doing.

Know Your Numbers

There is no doubt that potential investors are going to want to discuss your figures, so you need to make sure that you have these well-rehearsed. While you are likely to have these written down and displayed on graphs etc, it can still instil an extra level of confidence if you are able to reel these off. You also need to be able to demonstrate to potential investors where their money is going and how you are going to spend it in the wisest way possible.

See:  Top Investors Advice To Prepare For The Next Decade

Sell Yourself

While a big part of what you are doing is selling your business idea, you also need to be able to sell yourself. After all, investors are going to be putting their faith and finances into you as well as your idea. So, give them a brief summary of your achievements and what makes you the perfect person to carry this idea right through until its successful conclusion.

Anticipate Questions

At the end of the pitch, you are bound to have to field some questions. Rather than letting these take you by surprise, you should anticipate what they are going to be so that you are prepared to deliver a concrete and convincing answer. Sure, you may still be thrown a curveball and have to think on your feet, but it is still worth being prepared for all the standard enquiries that you could get.

 


NCFA Jan 2018 resize - How to Make a Great First Impression With Investors 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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Fintech Fridays EP44: The Vanguard of Digital Innovation and Ecosystems in Canada

NCFA Canada | Oct 16, 2020

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EP44:  The Vanguard of Digital Innovation and Ecosystems in Canada

Guests:

RICHARD REMILLARD, President, RCG Group (LinkedIn)

ROBIN FORD, Principal, Robin Ford Consulting (LinkedIn)

DAVID LUCATCH, Co-Founder and CEO, KABN Systems North America (LinkedIn)

LYNN JOHANNSON, Owner, E2 Management Corporation (LinkedIn)

EP44 podcast logos - Fintech Fridays EP44:  The Vanguard of Digital Innovation and Ecosystems in Canada

About this episode:

Join us for a special Episode 44 where Craig Asano sits down with a panel of NCFA Advisors and members who discuss the vanguard of digital finance and it's ability to fund, develop and scale digital innovations in green finance, digital identity and other emerging ecosystem opportunities in Canada. Are success stories like Wealthsimple and Shopify repeatable? Covid has afforded us all the time to take stock on the past and present while considering a relaunch of the future. Will Canada get it right?

Subscribe and tune in each Friday to check out the latest movers and shakers in fintech. Listen to more podcasts here:

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Fintech Friday Transcript of Episode 44:

 

Intro: Welcome to fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners. Covering all things fintech, blockchain, AI and alternative finance.

 

Craig Asano: [00:00:17] Hello, everyone.  My name is Craig Asano, the founder and CEO of NCFA, welcoming you to a special Episode #44 of Fintech Fridays. Today's weekly podcast brought to you by NCFA and Partners, where we sit down with incredible people in the fintech and funding community coast to coast across here in Canada, as well as around the globe to talk about trends, product innovations, developments and challenges. Fintech Friday's is an evolving and innovative educational platform focused on delivering authentic personalities, content and storytelling on the journey of mainstream adoption of the new financial technologies and their impact on the future of finance. As mentioned earlier today, we have a special episode with a few NCFA Advisors joining us today to discuss recent current trends in news. It's something that we've been meaning to do for a while here on the podcast. And today is a perfect day to pilot our first based adviser podcast. There's there's no scripts here. We've just advised our advisors to come up with a topic that they'd like to bring forth to the table for discussion. And we'll probably run with that format for the next forty five minutes. So just a quick introduction or maybe I'll have the guests introduce themselves. We have four guests joining us today, all of which are valued, and NCFA advisors and members here at the association. I would just say maybe I'll call in no particular order. Richard, could you just do a quick intro and maybe also just mention your involvement and any thoughts within NCFA as an advisor as well?

 

Richard Remillard: [00:01:56] And thank you very much, Craig. Good afternoon, everyone. Good afternoon, panel. It's a privilege and an honor to be here with you today. My background is all finance going way back to the Jurassic period when I had hair up. Lately, I've been engaged in doing some fairly heavy duty research from the private sector and public sector clients on risk capital issues, on access to capital for startups and what I call today scale ups, most recently a major report I shall talk about shortly to the federal government on a capital raising prospects for medium size, high growth companies in this country. Thank you.

 

Craig Asano: [00:02:48] Perfect. So we certainly got capital covered. Sounds good to me, That's Robin, could you introduce yourself?

 

Robin Ford: [00:02:56] Yeah, thanks, Craig, great to be here. My background is law and regulation, not entirely in the financial services sector, but certainly for the last 15, 20 years in the financial services sector, both in the United Kingdom and in Canada. I'd love to talk about some of the recent regulatory activity around the globe and in due course.

 

Craig Asano: [00:03:28] Perfect. Sounds like something that we can kick off next, but before we do, we got two more participants today. David Lucatch, can you introduce yourself?

 

David Lucatch: [00:03:39] Thanks, Craig, and great to be here with everyone on a what I would hope is a beautiful day, but David Lucatch, CEO and Chair of KABN Systems North America, we're in the business of verifying and managing and monetizing digital identity. We help people control that new area of self-soverign a digital identity and we're a Canadian listed company on the CSE under the symbol KABN, K-A-B-N.

 

Craig Asano: [00:04:12] Perfect, sounds great. I certainly have been following the ticker myself, and we have Lynne Johannson, then can you introduce yourself, please?

 

Lynn Johannson: [00:04:23] Sure, thank you very much, Craig has been a great decade so far this week, so much going on.  And in this space here I am in a management consulting firm in the environmental area, and I have been very much involved in the whole field of green finance.  And a couple of years ago, I caught on to what Craig was doing and I said it was very interesting because typically in the green finance discussions i'm involved when we're setting standards, international standards, and we're dealing with very large companies.  But some of the people that have been involved in NCFA have brought to my attention a very different way of looking at green finance, and I think there is an extraordinary opportunity here not only to help drive the opportunities that digital finance offers, but also how it can interface with the whole idea of green finance and move things along.

 

Craig Asano: [00:05:28] Mm hmm. Perfect. Maybe we should jump right into that topic and I know Decentralize Finance really took the financial services, the entire finance community, the crypto world as well by storm this past summer and it really poses an interesting tech stack that might be able to use in green finance markets. I know that Defi or decentralized finance has cooled off a little bit since then, but it doesn't seem like it's going away. And it seems like a very interesting framework of model to aggregate communities and stakeholder participation on multiple levels. And what are your what are your thoughts? Let's start getting into the discussion about the potential opportunities and obstacles of marrying initiatives like Defi with green finance.

 

Lynn Johannson: [00:06:22] Thanks.  If you sort of look at what's going on in the last little while, there was a report I actually just got up just before this call that talked about how a group of entities including the World Gold Council, the Silver Institute, European Central Bank and some others said that the value of global money supply in last year was 600 times higher than the value of the gold coins minted. And in part, I think because of the government is trying to bring out capital to help companies get through this thing called covid, they were saying that that has increased to sixteen hundred times over minted coins. The opportunity, I think, is if you of look at it and I've got my you know, my green hat on here, my ecological hat on here is one of the things we're very concerned about in the environmental world is not just climate change, it's the whole concept of biodiversity. And I think what the digital finance situation brings forward is what I call digital diversity. And there's so many aspects that we could be looking at if you wanted to, at a straight sort of environmental impact, if we can move from digging up minerals out of the ground and moving to electrons. There still is a carbon footprint to that, but it might be appreciably less and as opposed to being localized, it's a diversified impact. But I also think that one of the opportunities is and I have to apologize to the gentleman to name at your conference Craig, but they talked about democratization of capital markets that give us the ability to vote with results. And so if you think of some of the developments that we need to occur to get a green economy going, you have the chance to dramatically increase the speed of transfer and also help small businesses at the forefront of mitigating (raising) ten thousand dollars, you can have people who want to contribute into that idea and then through that process, move faster than we have before. So interesting to see how other people, how they can see this shift or and changes developing may assist us.

 

Craig Asano: [00:08:59] Right, one thing I just want to make sure you're speaking directly into that microphone, it was a little just a little bit, but I think most of us got the gist of the points. I'd love to. I heard the topic around, you know, access to capital. And one reason why we're looking at the innovative opportunities in Decentralized finance and how that can benefit the areas in climate change and green finance initiatives you're looking at. And Richard, really, this is a question for you, since you've been doing some research on access to capital and does a technology and a model like Defi...is it going to go to work or an initiative like green financing? I mean, I know in your networks you've been talking to a lot of folks that have certain strong perspectives on both sides, you know, of of what is green finance. And I'd love to hear your thoughts.

 

Richard Remillard: [00:10:06] OK, in no particular order. And as a former. Board chair of the Sierra Club of Canada Foundation, way back when, and confirmed environmentalist and biodiversity supporter. I'd like to see personally as much as many resources and efforts devoted towards what we could call green finance as possible. The difference between, to my mind, green finance or financing green companies, to put it a little bit differently and financing IT (information tech) or bio lifesciences or AG, is that a huge amount of the private sector appetite depends on what governments do. So if you look south of the border right now, there's this immense contest going on between the Republicans and Democrats, and there will be a materially different cast to the opportunities for green finance in the states and spilling over to Canada. If one party wins rather than the other party, as Trump and his Republicans win, it'll be a lot tougher. If Biden and his party wins, it'll be a lot easier. And there will be big spin overs, spin offs here into Canada. If you look at. The capital raising issues today, research I've done on behalf of the federal government shows that finance companies tend to be largely these days, with some exceptions, at the smaller end of the SME spectrum, small, medium-sized enterprises and as such, their capital calls. At least they are not all that great. Cast your mind to recent news. Look at fintech emerging unicorn Wealthsimple, which is backed by Power Corporation here in Montreal and their last financing, around 140 million US led by three U.S. gigantic venture capital funds. I know that there are separate and distinct markets tiers one, two and three for capital raising for earlier stage and SMEs in this country and Wealthsimple is at the Top End, which cuts off at about 20 million US. In that market, if you've got a fast growing company, you've got between one hundred and five hundred four ninety nine employees. U.S. funds will be knocking on your door like there's no tomorrow at TCV, the lead investor in the Wealthsimple deal acknowledged that it had had Wealthsimple on its radar since twenty fifteen. There are extensive what are called "smile and dial" operations in Canada, whereby call centers very high end call centers usually out of New York, simply dial every company That's raise five million dollars in a series a round and they try to get meetings with the likes of TCV or Kane Andersen or Warburg Pincus. At the bottom end, which is more which is mostly where the green finance companies are of one sort or another. That's company is looking for less than five million and the market there is very jumpy pricing is incredibly uneven, and your best bet of getting financing is probably in Quebec and we probably said enough.

 

Craig Asano: [00:14:07] Well, I mean, you touched upon the US election and, you know, most people who are following would know that if Joe Biden becomes voted in power, the strength in the whole green case. I read an interesting article the other day about the green ETFs that have grown one hundred and sixty percent the last six months. And it's not a small sum of money. I think these these funds have grown, as you're mentioning, much, much larger than anything potentially could be put together here in Canada. But is it with the federal governments in Canada support for those pipeline projects and the folks in Alberta that are still getting paid on? Let's call it a declining industry at this point with peak oil, where how from a capital raising perspective and how that's going to marry with these new sort of innovative financing models, even if they have a role to help finance, as you were saying earlier, stage, maybe smaller green finance companies. Are they small companies we're talking about here, Lynn? Or just to come back to you, is are these what kinds of projects are required? I would have thought their massive infrastructure projects that require all sorts of capital, they're not small, small companies.

 

Lynn Johannson: [00:15:40] Well, there. Can you hear me OK?

 

Craig Asano: [00:15:43] Yeah, we can, it's much better yup.

 

Lynn Johannson: [00:15:45] OK, well you are looking at infrastructure projects and those are more often public partner, public and private sector sharing's of those things. So what I came in under is I'm currently involved in running a green finance standard. It's an international one and our interest is to make sure that there is a mechanism so that if person A has money and person B wants money, the first thing they really do is the question is asked is have you looked at your environmental impacts of what you're trying to propose, whether it's a performance issue or whether it's a specific environmental impact issue. But so the other gentlmen said so much of the opportunity out here is in very small companies because they are the ones who do the innovations and they don't typically get looked at in terms of financing and what I'm talking about here is, you know, really micro-enterprise. And so much of what I think the digital economy or digital finance opportunity offers is that you have people that do crowdfunding and they what they need is they need twenty five thousand dollars and they don't have the time to do all the paperwork that these bigger projects would require.  So this is, I think, really where my interest area is, is seeing how can we get the digital finance situation to make finance available, because those are the critical times to get money in the door to get these innovations going. Oh, and also that's quite answered your question, but. Infrastructure projects. I mean, that's that's big money and you've got several of the big banks in Canada have put forward the fact that they're going to be offering sustainable finance funds. So, for example, Bank of Montreal, they've earmarked four hundred and fifty billion to be available by 2025. They're not going to fund a micro-enterprise out of that purse. I just don't think so. But there's things that they could do to help that. But so there's you know, it's such a big playing field and there's so many variables, whether it's to finance a green company and then who determines what that means, and then is the financing itself, is it a green bond or are you doing a green lease? It's just such open ended field at this point in time. Mm hmm. Mm hmm.

 

Robin Ford: [00:18:34] It's just to interject briefly, I mean, we're so, so desperate for funding for green activities globally. You know, entities like the Asian Development Bank and so on have put absolutely enormous figures on the amount that's going to be needed both from governments and from the private sector. And so it seems crazy that we're not more advanced in Canada on the democratization of capital side and and on the standard side, both. It's crazy to me that it's not much easier for retail investors to spend a thousand dollars or 5000 dollars on green bonds, for example. And you know, what specifically can Finechs be doing to help on this front?

 

Craig Asano: [00:19:29] Mm hmm. Well, Robin, since you want to jump in here from a I know you track all things, it seems regulatory and certainly abreast of some of the changes that are happening and the Defi the crypto space. But are there specific regulatory activities that are, you know, coming out around the globe and that that will put Canada further behind without those standards? And what is the approach?  I guess the question is really around, how do we finance innovation here in Canada and its degree of importance? And it comes back to that, you know, how productive are we? How competitive are we? Are we operating, you know, out of an expensive pocket because the rest of the world continues to move forward? And it seems like Canada is always on the cusp of obtaining that capturing and monetizing the value, if we can use the word, monetizing it for the benefit of the greater good. But what are you seeing it from a regulatory perspective?

 

Robin Ford: [00:20:36] Yeah. Are we on the cusp? I don't think so. I think we're increasingly falling behind, not just in in the area of innovation and fintech but let's just stick with that for now. Let me just whiz through some regulatory activities. They're coming down fast and furious, so much so that it's all becoming a bit of a dog's breakfast. And just just to Segway off briefly, if it occurs to me that we could use some kind of grand map that can show us what is going on in various jurisdictions, I mean, we're well beyond the Excel spreadsheet stage now and some of the more innovative regulatory activities, the more sensible regulatory activities are actually happening in smaller jurisdictions like Gibraltar, like Malta, like Hong Kong, like like like Singapore. So you don't want to leave them off a regulatory map. So I just I just put that out there for now, perhaps, you know, let's say Icomply. Could you could you step up and produce such a map? I'm I'm sure some organizations are monitoring all of this in a more much more sophisticated way. And it would be good to hear from them. So can I just talk about the UK briefly? Because I like their approach with respect to crypto and fintech and all things innovative.

 

Craig Asano: [00:22:14] Sure. Absolutely.

 

Robin Ford: [00:22:16] Ok, I you know, my preference is for the UK, it's my my background. But they have been very sophisticated about doing the analysis, examining the obvious problems and taking taking care of those relatively quickly. So AML, CFT, fraud, theft, market manipulation and so on. And they've produced an excellent piece of guidance which talks about crypto assets, digital assets, virtual assets, however you want to label them, and then sets out which virtual assets will be a security, which will be a utility token in which an exchange token. Those are those are the three categories. It's simple and they haven't overly complicated it and I recommend it to to everyone on this who's listening to this podcast, they're now they're being very conservative because of their strong belief you don't regulate unless it's clearly demonstrated to be necessary. They are not a jurisdiction that regulates to fill a gap. That is not the way their analysis works. If they identify a market problem and if it's a problem that the regulator should fix, then they go to consultation on solutions. They go to consultation on cost benefit analysis in a way that very definitely does not happen here in Canada, by and large...I mean, OSFI is close but they're not there. So at the moment in the UK, in addition to AML fraud and so on, they're proposing only to extend their financial promotion rules to some crypto assets that are not regulated at all. And so that's very interesting consultation document to look at. And there's going to be a consultation document soon on stablecoins and question mark, so we wait to see what that will contain, hopefully before the end of this year and I will make a couple of comments on Canada, Craig, or does anybody else want to kick in at this point?

 

David Lucatch: [00:24:40] Well, I was going to comment today that I was going to comment on AML and fraud when it comes to the U.K. and and I'll agree with that because KABNs ID platform was actually born out of Gibraltar and the U.K. and it's you know, the rules are been very, very favorable in those jurisdictions to me to be able to manage fraud detection and AML compliance. So I think that's an important point when it comes down, as I hope we talk a bit about digital identity, but those are definitely contributing factors. But I will also mention that I'm sure that some might be aware that with the recent Brexit issues, the both the UK and now the US are having GDPR compliance issues and those are going to have to change as well because both are falling outside the purview of GDPR. Hmm.

 

Robin Ford: [00:25:40] Yeah. Isn't that a huge issue, data? It is. I know. KABN/David, you'll talk about how you can talk about that in a sec. I don't want to spend too much time on regulation. Craig, if it's OK, I might just gallop through the list. There is just so much going on.

 

Craig Asano: [00:26:00] Yeah, but let's let's cover the Canadian perspective and then we'll try to tie it back into some some takeaways of thoughtful takeaways here.

 

Robin Ford: [00:26:11] You know, Canada is not operating at a high level at the moment on the financial services side. And I'm just going to mention a couple of things again, because there's so much going on in Canada as well, not necessarily entirely positive. And then I'll throw it open. And if anybody wants to raise something specific, they should they should do that. The approach here is very different from the approach in the UK. We're still very the regulators here are still very, very old school. The CSA, Canadian securities administrators have put on a staff notice this year that proposes to regulate crypto exchanges in via a rather contrived theory that essentially turns a traded crypto asset that would otherwise not be a security into a security when it is not delivered to the purchaser more or less instantly. This is a pretty this is a pretty novel approach and we're getting some squeaks back from the industry and we'll wait to see how CSA reacts to that. Otherwise, other entities that actually want to be regulated because it gives them it makes them in the face of the public more more reliable, more able to be trusted. Various entities have become regulated through various mechanisms in Canada and I have to say it is rather confusing. So it would be great if, Richard, if you were up on this, it would be great to hear a little bit more about Wealthsimple. I think three of their subsidiaries have got three different registrations, one of which is in New Brunswick. And in and in other respects, we know that not others than Wealthsimple have become regulated recently by becoming dealers, for example. So it's just yet another form of a dog's breakfast and it's a bit hard to pick it all apart, and that is in part because we're not there at the table, so we don't know exactly what's going on between these entities and the regulators so that we're able to understand what hoops they jump through and just precisely what it is that the regulators are looking for. Are you able to say anything?

 

Richard Remillard: [00:28:45] A few things, not particularly about Wealthsimple, but stepping back as long as longer, in my view and my research that we are we're grossly overregulated and poorly regulated and sofar as the entire financial services industry is concerned. It's a God awful mishmash. I apologise for the swearword. I'll put twenty five cents in cryptocurrency into a box. It's it's just a dog's breakfast. And when you say, why is that the case? It's not culture. It's it goes right back to 2008 when our financial system emerged relatively unscathed from the monstrous financial debacle that hit the UK in the US and other countries as well, but those two in particular, and which led to a resurgence of industry challengers and a receptive regulatory environment that was grossly dissatisfied with the performance of the existing status quo financial institutions that never happened here. And what has happened with the benefit of history is that sometimes your best learnings are come from your biggest failures, not from your successes. And in a sense, regulators here, by and large, are fighting the last war. They're putting up national lines all over the place and and stifling the sort of innovation that I think you see and other more nimble jurisdictions from Singapore to Australia to the UK. One counter point to this is, is some analysts think it really doesn't matter and it really doesn't matter, because once new digital technologies are rapidly adopted in other countries, we'll be fast followers and it won't matter too much. In fact, the Canadian banking industry as a whole and I'm talking about schedule one banks now, and have a long history as being fast followers. And and the system is setting itself up now to to try and take that route. I'm not sure if that will succeed because the real challenge will be coming from Bigtech, whether it's American or Chinese, whether it's Google, Facebook, Intuit, PayPal or Tencent, Alibaba.

 

David Lucatch: [00:31:55] I'd like to comment here, because I think there's there's a huge piece we're missing, and I want to be a counter to part of this argument that Canada actually is one of the primary leaders in the formation of a self-sovereign ID and digital identity, which for most crypto backed assets, especially when it comes to security backed assets is a fundamental requirement.  Canada actually leads with companies, I like to say, like ourselves, companies like SecureKey, DIF, Trust over IP Foundation, where if you think about the Internet, if we are to shift for a moment into technology based on Rich's comment when the Internet was designed, and unfortunately, I guess we're fortunate I've been around since that beginning. When the Internet was designed, the identity layer was something that was never considered.  And now we're we're focusing on whether it's the travel rule. FATF, you know, there's so many issues that are coming up because the movement of crypto, the movement of securities, is going to be tied to an individual or tied to an organization or a holder, as we call it. And I want to be clear here. Canada is a paramount leader in this industry, and it's a very quiet industry that is going to become very vocal in the next couple of years. And I think that's a fundamental situation right now when we think about the safety of assets and security of assets, we're all fundamentally controlled by username and password. I mean, ultimately, we saw the CRA breach and we see breaches every day, fundamentally not in Canada, but we see fundamental banking breaches in the US and beyond. And I think the Canadian banks have taken a very, very strong position that they are going to move to what's called self-sovereign identity. And just for the listeners, you know, if I take out my wallet today, my regular wallet, I can control what goes in there.  That's a self sovereign wallet. And my keys become an opportunity for me to protect my valuables. If I can digitally tie those to my identity, then I am in control of what I can share when I share and how I share. And I think all of what we talk about is going to come down to how whether it's, Wealthsimple, whether it's funds, whether it's banking is all going to be controlled by a holder's ability to prove who they are. And that goes that extends to I don't want to say contract tracing, but venue location check-in and safety measures and airport security. In fact, we see companies like Clear which those that may have traveled to the United States see the clear program and are now moving into a more digital identity focused business. So I think I think what we're seeing is we are seeing pockets of major innovation in Canada and it might be quiet, but it's at a baseline layer that is going to become very important to the overall spectrum of financial services in the next two to three years.

 

Richard Remillard: [00:35:07] I think those are really well-chosen points. They're really well chosen. And I think my mind goes back to that Jerry Maguire question. Show me the money. So where is the money going to come from? And the chances are that given where we are as a as a late industrial country, the chances are that our best and our brightest will get the growth capital that they require, either from an investment fund like TCV or Greylock, or they'll get it from US listing on the Nasdaq because we have much more liquidity there than on the Canadian exchanges or Microsoft, Google, Amazon will come in and do a kill merger. And I think the looming national security issue for the country is in in the world of self-sovereignty for health products, for supply chains, for digital identity. How can we ensure that those very interesting shoots that you've identified actually grow up into great big tall trees that can go toe to toe with the biggest and the best?

 

David Lucatch: [00:36:32] Well, Richard, I'm going to I'm going to introduce a concept called the Trust Triangle, and we're very familiar with this type of triangle when it comes to very simple everyday use. When I walk into I'm going to use this example when I walk into the Wal-Mart and make a purchase, when I'm ready to cash out, there is a there is an immediate trust triangle between myself, between Wal-Mart and between my bank. I scan my card or swipe my card and that initially requires that all three parties participate. So Wal-Mart's into the transaction over to the bank asking, is David's car good enough for his bank account, good enough to be able to verify that transaction? The bank says yep. And David has to verify with a pin. And the US is a bit of a different animal in the UK and everyone else uses a pin.  So that trust triangle happens in merchants and there is a flow of funds throughout that spectrum. If you think of identity, if somebody wants to use or wants me to, if I want to walk into an establishment that wants to verify that I'm over, you know, 19 in the province of Ontario, why do I have to give them my address? They just need to know I'm over 19. Again, a trust triangle can occur between myself, the establishment being the verifier and the issue of that digital credential that I've created and that verifier might pay a micro cent for that. And I think when we look at it, these things are going on. If you look at the fraud industry for credit cards, which I think globally is about a 30 billion dollar industry, nine billion in North America. We're seeing companies like MasterCard on the Trust over IP Foundation and we're seeing companies like Visa on credentials on file, getting into verification, because if I can verify that a user online has a trusted identity and proves that transaction, then I can reduce the cost of the ecosystem. So I think when you look at that part of the transaction, where does that befallen? Well, I'm going to mention a very wonderful Canadian success in the last few years. Shopify, will Shopify have interest in that? So we will know Omers ventures. Who will who will be involved in that? I think if we can promote that emergence of this digital transformation technology, it will extend, as it was mentioned earlier, now you can have accredited credentials, are non accredited credentials. Know who the user is, know who that they've been verified by a brokerage firm or an independent financial service. And now maybe they can buy a thousand dollar green bond because we know who they are.

 

Robin Ford: [00:39:11] So I think when it yeah, I just going to say that I don't think anybody in this call would argue with the idea that digital identity is incredibly important. But and nor would  anybody argue with the fact that we've got some wonderful innovators in Canada. And the same is true in particular AI and Cleantech. So all I just want to throw in there that there is an unfortunate side to that, which is that the governments in Canada, in particular, the federal government, has chosen winners. And this is something that governments need to be very, very careful not to do, because the downside is that the rest of the innovation ecosystem is not supported in the same way. And this is one of the arguments that the NCFA has been making to governments for the last four or five years, Craig? So, yeah, digital identity is a fascinating topic. Absolutely. So sorry I sort of interrupted you. So carry on.

 

David Lucatch: [00:40:25] Well, I agree with you, but the interesting part, and you've just said a key word, I think when we think of this next generation, we're going to think of ecosystems. So there is going to be we're going to see an opportunity for a more level playing field. I might have a technology that verifies or does something in one area. And I need to be a verifier in an ecosystem. So I might be an innovator in health care technologies or health care information. I may be able to crawl into an ecosystem on an even playing field with a major player. That that's the real neat part about this is I think we're going to be offering more parity, whether you're a caretaker of data, whether you're a processor of data or whether you're an innovator of data. And I think that's going to touch all aspects of all industries. And I think Canada has a massive opportunity to be leaders in that space. And and the other thing that I'll just touch on is that data will be country centric. So Canada can can provide major infrastructure opportunity, but US data will reside in the US and UK data will reside in the UK. So I think we're seeing that the opportunities for Canada to be innovative in the technology arena, I think is very opportunistic right now.

 

Lynn Johannson: [00:41:53] Can I just take your guys over to Mongolia for a minute? When I was there in 2016, I like to get around. When I was there in 2016, the banking system had basically they were taking away the the bricks and mortar.  And if you wanted your money, basically you got hold of the bank. And I know the phone call or email or what, and they would bring the money to your door and how they would identify you as you would put your thumb into this little device and it would normally take your thumbprint, but your heartbeat and apparently those are unique signatures.  Now to bring it back to Canada because the technology came out of Vancouver.

 

David Lucatch: [00:42:37] Yeah, yeah, biometrics, again, is a big area for Canada, if there is this leadership position and unfortunately, Mongolia also had one of the biggest failures of a digital crypto exchange fraud. But but generally speaking, yes, there is there is huge opportunities in the space.

 

Robin Ford: [00:42:58] Yeah, I think Canada does lead in various areas, not just this one, but we're not saying that it doesn't lead in any areas. I that's not quite the point that we're making.

 

Richard Remillard: [00:43:12] Well, I think it's to build on what colleagues have said and just to step back a tiny bit, a recurring public policy challenge, and industrial challenge, is to scale up our best and our brightest. It's great to point to Shopify and they've been a wonderful success with even this current federal government, at least the minister of innovation, something development several years a couple of years ago said what I'd like to see is 25 Shopify's. And he's right. It's just wonderful. But where are we? I'm not sure that we're all that far advanced. Ultimately, we might get there. But there are great risks that will be a farm team for other countries, other countries industries principally in the U.S., but also China and others.

 

Lynn Johannson: [00:44:26] Sorry, but isn't part of the problem. I mean, from my perspective, from the environmental side, if you had an innovation and you wanted to get it off the ground, you'd take it to California or you take it to Germany because they are the ones that would fund it. You couldn't get support within country to do those things. And I think that's a travesty because we may have the idea, but we may not commercialize the idea.

 

Richard Remillard: [00:44:54] Well, it's interesting because one of the CEOs I interviewed, oh, nine or 10 months ago for this report I did.  The CEO of a high tech info tech company in Saskatoon. And he said the difference between here and there is that if I if my burn rate is really fast and I need to get more Capital, if I'm in Palo Alto down the valley, then I could just walk across the hall and get it. But here in Saskatoon, you know, there's no local guys.

 

Robin Ford: [00:45:32] It's not as though the capital doesn't exist in Canada. It does. There's money sloshing around all over the place. I mean, we're one of the leading funders of mining, for example. So just so that we're not creating a false impression that somehow there is no ability to fund in Canada, it's just that perhaps that funding either is being used at all. We know various entities are just sitting on cash or it's going to what some of us might argue is to the wrong place, like the oil sands, for example.

 

Richard Remillard: [00:46:10] I was going to say that the incentive structure in place to grow companies, capital, incentive structure and mining, oil and gas have benefited from accelerated write offs, capital cost allowance, and they've benefited from flow through shares. And there are large parts of the tech industry today in Canada that are pushing for the transferal of flow through share concepts to high tech with a very broad definition and away from mining, oil and gas.

 

Robin Ford: [00:46:47] Yes, and the incentives, as Mark Carney has just recently said, we need to get on the ball with the with the carbon capture carbon tax, getting rid of the subsidies as soon as possible. But that's a bit of a different argument or a different topic here.

 

David Lucatch: [00:47:04] Yeah, being a microcap company and being on the public exchanges and having had multiple companies in that position since the late 90s, I will agree with what we said is the key. I think you can it is you can always get Canadian money to develop something.  World capital is not generally within the spectrum of funds or investors. So if you've got a great idea, you're going to likely get the minimum necessary capital to get to an MVP, minimum viable product but you are not likely to get growth capital in Canada. It is a unique situation. And that's why we have the export of the brain trust, because people developed something here, they develop it here and then they take it South. And that's why I went back to Shopify, because Shopify is a wonderful example and we do need twenty five fifty one hundred two hundred Shopifys. And we have had them over the years, initially RIM and we've had some great successes. But but we don't see that repeatable enterprise over and over again. That's, that's the challenge. So getting money to start - easy..getting money to grow tough.

 

Craig Asano: [00:48:26] Yeah, I mean, we we've heard this commercializing and scaling IP and some of the gaps and the it's really a question to everyone, try to bring this together and, you know, we'll we'll move to potentially wrap up the podcast. That's a very interesting discussion. I've sat back and really just been taking in the different perspectives. But with the government having so much involvement in innovation and its importance to the Canadian economy in light of all the changes in the world with and I read that I think it was 70 per cent of Canada's exports go to the US and there could be additional tariffs and we need to be more self-sufficient here. We talked about capital gaps. How do we get our infrastructure to a point? And this is not so. It's only the government we have to go to and say we don't like you picking horses, but you can't get everything because we've sort of been under the thumb. We've been I'm not sure at this point if it's only a regulation. I'm not sure at this point if it's the government only picking horses. But I do sense that there's been a lot of resources spent but the average infrastructure, I'll use that expression, the tide that lifts all boats, the ability for industry to self certify and create standards and as a result create value that will bridge to larger sums of capital to the point where we're attracting, you know, those larger US VC investors and funds up to actually operate up here, which is starting to happen as opposed to the brain trust or drain that David was mentioning about. So what would this group here on the call like the priorities to be in that regard? And what do they think the government's role should really be when it comes to supporting innovation, being that first customer, but being able to create enough infrastructure here so we can feed ourselves and get to that point where we do have enough capital? Or is it we're just limited to the population and GDP growth that we have and will always be, you know, a smaller country and probably smaller going forward. As far as the global impact is concerned.  I love innovators, but we're coming down at the end of the podcast. I want to pose that question.  David, go ahead.

 

David Lucatch: [00:51:06] Yeah, I want to say that right now the B.C. government is is just taking sort of a leadership position in support of an idea, digital identity. And and tomorrow, Ontario is extended the submission guidelines and they've had town halls about self-sovereign identity, privacy reform, all those type of things. So I think we're seeing governments get in the way. You know, one of the things that has helped in this initial area is the framework for the data, which is which is germane to most technology industry has been sort of developed through GDPR in Europe. And I like to think that it's been to some extent overdeveloped, although that will take some time to come back in California with the CCPA.  But Canada, based on PIPEDA being a federal guidelines for sort of the major of data, the provinces are now seriously looking at how to home grow these opportunities. And I think that's going to lead to an entire new industry and technology that fosters cybersecurity, data infrastructure, data management, self-sovereign identity, digital credentials. And we are seeing, again, that leadership in Canada. So I think the government right now and digital innovation, I think is doing a good job to try and figure out where we can lead.

 

Robin Ford: [00:52:29] I disagree. I've got to say.

 

David Lucatch: [00:52:32] I've been I've been on town hall the last few days, so that's why I'm taking that position.

 

Robin Ford: [00:52:35] I'm sure you have in that sector but but Michael King has been very very good about this for years going into Finance Canada and elsewhere to talk this through. What we what we need in the federal government must lead on this is an overarching innovation strategy and we don't have it. What we have is pathetic. And, you know, all you need to do is compare it to what's going on in the UK with their overarching strategy. And we don't even we don't even come close. So I would go for Michael King's first and foremost thing that we need is a properly thought through and properly followed up national strategy.

 

David Lucatch: [00:53:23] Well, I guess I just want to rebuttal that. For one second, so I'm going to take the U.K. strategy and take it down to Gibraltar, where one of the first crypto security exchanges was developed and out, and ultimately which one of my companies was part of and ultimately left for Estonia because they just couldn't work within the regulatory framework. So I think the U.K. is a great place in developing a lot of great standards. But but for many organizations, I'm not sure that the framework for the emerging digital transactions and digital economy is working that well. And I'm not I'm not disagreeing that Canada doesn't have a long way to go. But we're seeing on the ground today the opportunities that provincial governments. I'm not talking about federal and the provincial level are taking a very, very good look at what technologies will transform the digital economy.

 

Richard Remillard: [00:54:21] From my perspective, there are a number of steps that could be taken, starting off with recognizing the fact that this covid pandemic has provided us with an opportunity to rethink pretty well everything. So let's start off with the tax system and the tax credits system. I don't know if, Fred, tax credits do anything except provide opportunities for employment for accountants and other advisors. Whether or not they actually result in commercialization benefits is questionable. That's four billion bucks a year change the tax system so that growing companies are taxed less than non growing companies. There's a there's a bias in the system so that startups, smaller companies benefit from a lower marginal tax rate and larger companies get rid of that, take a flow through shares and apply them to all the interesting tech sectors, including digital identity verification, security that that we have. And I'd I'd look for opportunities to increase the availability of earlier stage tech offerings to retail investors and change the definition of accredited investors more along the lines of what the SEC has for at least recently.

 

Craig Asano: [00:55:56] Hear, hear, that sounds like increasing the caps and crowdfunding and maybe changing the name to me.  I know that, but well, I mean, we gotta keep up with the Jones.  I know Europe just past their five billion cap euro. The US is moving that way. Change the credit. We we need to move on some of those initiatives and they have been studying it long enough. And the boogeyman of fraud never appeared despite all that concern. And it's not a time to put it in a box and wait for it to either go this way or that way. They got to enable it. But, Lynn, I'd like to hear your closing thoughts on some of this, the government's role in the innovation space.

 

Lynn Johannson: [00:56:46] Well, I guess I'm going to come back to my ecological mindset, and this is a systems approach that we need, and I do agree that we have to this is a moment in time when we get to rethink the system. But this is all part of, you know, how do we bring forward a green economy and how do we how do we rebuild? Well, when you look at a forest, a forest doesn't start with the canopy trees, the big guys, the forest starts on the floor. And so we need to get opportunity for lower cost financing into the hands of the innovators who largely are the small businesses need to remove the barriers to success for them to get going. And we need to sort of bring together, you know, get rid of the subsidies of the things that we really don't want to support anymore, because it's, you know, giving one large company so you can get a nice photo op in for one town doesn't help everybody else who maybe wants to buy the hydrogen car as opposed to the EV car. So I think there has to be a real serious fundamental systems rethink, but we got to start by supporting small business in the first place. 95% of businesses in Canada are in companies with fewer than 50 people. That doesn't include the one person shops and you're talking about about a million companies who are, you know, their family operated things that they don't have. You know, they don't report their accounting systems to the extent that we have to when we have a larger company, but they still are part of the economy and we need to get our heads around engendering that growth from the ground up, and I think that digital finance has the opportunity that if we get it right, that's how you can flow money faster, reducing the cost of getting capital to them but it's also we can overcome some of the, you know, the barriers that small businesses have with the large financial institution who, you know, you pay something but they sit on your money for two days to collect the interest of those two day period. So I'm very hopeful that we can get the digital economy figured out quickly because I think it offers not only environmental, social, but economic value.

 

Robin Ford: [00:59:35] Perfect, Robin, before we move to close today's very valuable discussion around capital and government's innovation stuff, do you have any closing thoughts here?

 

Robin Ford: [00:59:49] I gave no my my national strategy point will do it, I think I'll give you less to do on the editing front.

 

Craig Asano: [00:59:57] Well, I guess I want to just take this time to thank everyone for their valuable time and insights. We had a very vibrant discussion, very interesting for a pilot for an NCFA adviser podcast follow up. So certainly covered a lot of ground and a lot for everyone to think about. If anyone would like to get in touch with with any of our guests today, I'm certainly going to share their contact information and some of the links that were discussed in the podcast in the show notes. And so I just want to thank Richard, Robin, David and Lynn for joining us. Thanks so much, everyone, for your time and for your valuable participation in NCFA as an adviser to the community. Thank you so much.

 

Speaker group: [01:00:40] Thank you. Thank you. Thank you. Stay safe.

 

Craig Asano: [01:00:44] That's a wrap, folks. So thanks for tuning in to this very special NCFA advisory edition of Episode 44 for Fintech Fridays. If you're new to Fintech Fridays, please check out some of the incredible past episodes on the site. We think you'll be surprised with what you find. We look forward to seeing you next Friday for another episode of Fintech Fridays. Have a great weekend, everyone. Bye for now. Thanks.

 

Speaker group: [01:01:09] Thank you. Take care, everyone. All the best to be safe. Bye for now.

Outro : you've been listening to Fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and Fintech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit ncfacanada.org. Oh yeah.

 

End of Podcast

 

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NCFA Jan 2018 resize - Fintech Fridays EP44:  The Vanguard of Digital Innovation and Ecosystems in Canada 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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CONGRATULATIONS TO THE 2020 FINTECH DRAFT PITCHING AND DEMO COMPANY WINNERS!



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OSFI launches consultation on technology risks in the financial sector (Deadline: Dec 15)

OSFI | Release | Sep 15, 2020

Technology risks in the Financial Sector - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15)OTTAWA, ON, Sept. 15, 2020 /CNW/ - Today the Office of the Superintendent of Financial Institutions (OSFI) launched a three-month consultation with the publication of a discussion paper, Developing financial sector resilience in a digital world.  The paper focuses on risks arising from rapid technological advancement and digitalization, as these trends impact the stability of the Canadian financial sector.

This consultation supports OSFI's strategic objective to ensure that federally-regulated financial institutions and pension plans are better prepared to identify and develop resilience to non-financial risks before they negatively affect their financial condition. While technology is a key enabler for financial institutions and financial consumers, its widespread use and rapid adoption can pose risks in many different areas of the business if not properly understood and managed.

See: 

Fintech & Cybersecurity: Key Risks and Solutions

Cyberattacks now cost small companies $200,000 on average, putting many out of business

Cybersecurity Body of Knowledge

 

Understanding the financial sector's use of technology and how technology risks are managed is central to this consultation. OSFI's discussion paper focuses on the risk areas of cyber security, advanced analytics (artificial intelligence and machine learning), and the use of third party services such as cloud computing.

"Digital technology continues to transform the financial sector. The pace of change has only increased since the pandemic began. This consultation will help OSFI to refine its regulatory and supervisory framework in a complex, rapidly changing digital world. The contributions received and the discussions that will occur will support effective risk management and enhance resilience in the Canadian financial sector."  Ben Gully, Assistant Superintendent, Regulation Sector

OSFI is seeking feedback from a wide range of stakeholders including financial sector participants, technology experts, and academics. Their input will help guide OSFI's regulatory and supervisory approaches to technology risks that meet our mandate of protecting depositors, policyholders and private pension plan beneficiaries while allowing institutions to compete and take risks.

Associated links

Developing financial sector resilience in a digital world: Selected themes in technology and related risks (discussion paper)

Strengthening Third Party Risk Management (infographic)

OSFI welcomes comments and submissions on the discussion paper by December 15, 2020. Feedback should be sent to Tech.Paper@osfi-bsif.gc.ca.

View:  source

 


NCFA Jan 2018 resize - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15) 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

Latest news - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15)FF Logo 400 v3 - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15)community social impact - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15)

CONGRATULATIONS TO THE 2020 FINTECH DRAFT PITCHING AND DEMO COMPANY WINNERS!



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NCFA COVID 19 letter to government to support Fintechs and SMEs - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15)

NCFA Newsletter subscribe600 - OSFI launches consultation on technology risks in the financial sector (Deadline:  Dec 15)