Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Venture Funding and Building
What 35 Markets Reveal About Digital Asset Regulation
November 4, 2026 | NCFA Resource | Digital Assets Blockchain And Tokenization, Regulation And Policy, Capital Markets Infrastructure And Funding
Regulation Is Not the Same as a Working Market
On October 28, 2026, the World Economic Forum and Boston Consulting Group published Regulation of Digital Assets in a Shifting Global Landscape, based on regulatory developments across 35 jurisdictions and more than 25 digital asset activities. The research includes interviews with 50 public and private sector experts, workshops and input from more than 100 participants. Digital assets can be legal and regulated while still being difficult for banks, asset managers and other institutions to use at scale.
More than 70% of the jurisdictions studied regulate the activity being performed rather than relying only on the form of the asset. Trading venues, custodians and payment providers are supervised in more than 75% of the sample. Progress still varies widely within individual countries. A market can have clear rules for tokenized securities while its stablecoin, custody or settlement rules are still incomplete. For a company deciding where to operate, the rules for its actual business matter far more than a country's overall reputation for digital assets.
What It Does In Practice
The 38 page resource compares rules for token issuance, exchanges, wallets, custody, payments, lending, staking and the infrastructure behind digital assets. It also looks at whether institutions can legally own the assets, protect clients, settle transactions, use digital money and meet capital requirements. The activity matrix shows where each part of the market is regulated, partly regulated, unregulated or prohibited.
Cryptoassets account for roughly $3 trillion in market value, stablecoins about $300 billion in circulation and tokenized real world assets about $30 billion. One scenario cited in the research puts tokenized real world assets at approximately $88 trillion by 2035, equal to around 16% of global investable assets. BlackRock's BUIDL fund had reached about $2.6 billion by July 2026, while Euroclear and Banque de France are working on moving a €310 billion commercial paper market onto distributed ledger infrastructure.
Tokenization is already moving into financial infrastructure because issuing the asset is only the beginning. Ownership records, custody, settlement, collateral and servicing all have to work after that. Faster settlement can cut counterparty exposure but may require more cash at the time of settlement. Easier collateral movement doesn't help much if institutions cannot price the asset, pledge it or enforce their claim.
Five barriers can stop institutional adoption even after regulators permit the activity. Leaving one unresolved can keep a legal market small.
- Legal ownership and settlement need to hold up in law
- Products must work inside existing risk and control systems
- Capital and collateral rules must make participation economical
- Transactions need suitable digital settlement money
- Assets need access to liquidity, distribution and settlement networks
What Still Commands a Premium
Digital assets won't make every middleman disappear, but they can make some existing fees harder to defend. Faster settlement and shared records mean less reconciliation, fewer manual steps and lower servicing costs. Businesses that depend on slow transactions, fragmented records or closed distribution may feel that pressure first. Liquidity, trusted custody, access to customers, risk capacity and market access are harder to replace.
For example, putting a fund onchain doesn't solve pricing, investor records, compliance, redemption, distribution or settlement. Tokenized fund operations after issuance still need all of those functions to work before investors get much benefit from the technology.
There is also money to be made connecting systems that don't yet work well together. Digital money needs places where it can be spent or settled. Tokenized assets need custody and financing. Banks and asset managers need reliable access to both. A company that solves one of those connections may have a better business than one issuing another token or building another closed network.
For founders and investors, a company can have excellent tokenization software and still struggle if customers cannot settle, finance or distribute the asset efficiently. Firms with control over liquidity, distribution, custody or an important connection between systems may have much stronger economics.
Where Regulation Still Gets in the Way
Not every part of a country's digital asset market develops at the same speed. Switzerland has established legal treatment for tokenized securities and distributed ledger market infrastructure while still developing its stablecoin rules. WEF and BCG state that “The relevant comparison is therefore by activity, not by jurisdiction overall.” A company choosing where to launch needs to examine the rules for its product and business model rather than rely on a broad label such as crypto friendly.
A country with heavy retail trading may need stronger platform supervision and customer protection first. Heavy use of foreign stablecoins can make reserves, redemption and currency risk more urgent. A financial centre trying to build tokenized capital markets may need clear custody, settlement and collateral rules sooner. Copying another country's approach can leave the biggest local problem untouched.
Cross border business doesn't require every country to have identical rules. Institutions need to trust the legal rights, customer protections and settlement outcomes in the other market. Countries can recognize each other's rules where those protections are comparable and avoid repeating the same work. That becomes much harder when supervision, enforcement, data or infrastructure cannot be trusted across borders.
Even the same rule can produce different results. Two firms may follow the same financial crime requirement but use different transaction histories, risk thresholds or blockchain analytics. One may accept a wallet that another rejects. Similar differences can affect collateral values, transaction data and controls. When that happens often enough, legitimate business gets slower and liquidity can break into smaller pools.
What Canada Needs to Get Right
Canada now has several parts on the go at once. Proposed federal stablecoin rules cover reserves, redemption, custody and Bank of Canada supervision, while Canada's six largest banks are exploring Canadian dollar tokenized deposits. Tokenization is also expanding across funds, securities and settlement. All of these products eventually run into many of the same payment, custody, capital and infrastructure questions.
Canada's stablecoin rules won't create an institutional market on their own. Banks still need practical ways to hold and settle the assets. Custody has to be clear. Collateral has to work inside financing markets. Financial crime controls have to work across different networks. A stablecoin can meet its reserve requirements and still see limited institutional use if the rest of the transaction is difficult or expensive.
Tokenized securities and deposits face the same reality. Faster settlement can force treasury teams to keep more cash available during the day. Tokenized collateral only helps when lenders can recognize it, value it and enforce the claim. Systems can connect technically while ownership, privacy or compliance problems remain unresolved. A digital asset becomes commercially useful when the whole transaction works, not simply when one part has moved onchain.
Strengths And Limits
The 35 country comparison is useful because it covers more than 25 activities and nine areas of regulation, making it easier to see exactly where a market is ready and where something is still missing. It also connects regulation to funding, collateral, settlement, custody, payments and business economics rather than treating compliance as a separate exercise.
The regulatory matrix mainly reflects conditions as of February 2026, and rules are changing quickly.
Key Resources
Digital Assets Regulation Insights from Jurisdictional Approaches (WEF comparison of nine jurisdictions published in 2024)
Stablecoin Regulations In Canada (current NCFA reference for Canada's federal stablecoin rules and implementation)
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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What US Midterms Change for Fintech in 2027
November 4, 2026 | NCFA Regulatory Insight | Regulation and Policy, Digital Assets, Payments, Capital Formation, Artificial Intelligence
Congress Changes Hands While Financial Rules Keep Moving
On November 3, 2026, Democrats won control of both the U.S. House and Senate, changing who will set the congressional agenda for financial policy when the new Congress begins January 3, 2027. The U.S. midterm election result creates divided government because President Donald Trump remains in office. Congress can change committee leadership, investigations, hearings and which bills move, but it cannot reset laws already passed, court cases underway or agency rules already moving into force.
For fintech, crypto, banking and capital markets, the election creates two different clocks. Congressional oversight can change quickly. Rewriting law is harder because presidential veto power remains, contested Senate legislation can still need 60 votes to advance and regulators continue working under authority Congress has already given them.
| Policy file | Where it stands now | What changes in January | What keeps moving |
|---|---|---|---|
| Crypto market structure | CLARITY stalled after Senate cloture failed 49 to 50 | New committee control and new negotiating terms if the current Congress does not finish the bill | Existing SEC and CFTC authority continues |
| Stablecoins | GENIUS Act is law and implementation is underway | Democratic committees can scrutinize implementation and pursue amendments | OCC rules take effect January 18, 2027 and other regulators continue implementation |
| Open banking | Section 1033 rule exists but compliance dates are stayed by a federal court | Congressional scrutiny of data access, bank costs and fintech competition can change | Court proceedings and CFPB reconsideration continue separately |
| Capital formation | SEC staff is reviewing Regulation Crowdfunding | Congress can change legislative priorities and oversight | SEC work within existing authority can continue |
| Financial AI | AI is already used across lending, fraud, advice and bank operations | Hearings can put more attention on automated decisions, fraud, data and AI agents | Existing financial and consumer rules still apply |
What Actually Changes When Congress Changes Hands?
Committee control changes first. Democrats will decide which bills get hearings and votes, which regulators and executives are called to testify and where investigations go. They can demand records, use committee subpoena authority, question regulators and challenge policy through legislation and appropriations. That can change the pressure around a market quickly, but it doesn't give Congress direct control over every financial rule.
The Trump administration still controls the executive branch, while independent agencies retain powers granted under existing statutes. A congressional hearing can expose problems, force explanations and raise the political cost of a policy, but it does not repeal a regulation. Leadership is not fully settled either. Maxine Waters is currently the top Democrat on House Financial Services and Elizabeth Warren is the ranking Democrat on Senate Banking, but the new Congress still has to organize and formally choose committee leadership.
For firms planning around 2027, the first committee agendas will tell us a lot. Hearings, investigations and regulator testimony can change before major legislation does.
Can CLARITY Still Pass Before the New Congress?
Crypto market structure faces the clearest deadline. The House passed the Digital Asset Market Clarity Act in 2025, but the U.S. Senate failed to advance the CLARITY Act 49 to 50 on September 15, 2026. The official Senate roll call confirms it fell short of the 60 votes needed to move ahead.
That vote came after months of negotiation. Republican sponsors said the September draft contained 126 substantive changes requested by Democrats, including changes involving ethics, decentralized finance and stablecoin related bank funding risks. Four Republicans also voted against advancing the House bill, so the disagreement was never simply Democrats versus Republicans.
The CLARITY Act Senate vote leaves the current Congress with one more window before the legislative process resets. If lawmakers cannot reach a deal before January, the new Congress can rewrite, narrow or replace the proposal rather than simply continuing with the same text. Crypto firms therefore face a near term legislative deadline that stablecoin issuers no longer do.
Why Stablecoin Rules Keep Moving Anyway
Stablecoins are on a different clock because Congress already passed the GENIUS Act in 2025. On October 21, the Office of the Comptroller of the Currency issued its final GENIUS Act rules for payment stablecoin issuers under its jurisdiction. The OCC rule takes effect January 18, 2027, while the Federal Reserve is taking comments on its own implementation proposal until November 30.
See: Are Stablecoins Becoming Payment Infrastructure?
The new U.S. stablecoin issuer rules give companies much more to work with than they had before. Firms now have clearer requirements around reserves, redemptions, capital, governance, custody and approvals. A Democratic Congress can still question regulators, review issues such as foreign stablecoins and rewards, and push for changes later. But it will not be starting from scratch in January.
That puts stablecoins in a different position from crypto market structure. Market structure still depends on another difficult deal in Congress. Stablecoin businesses can already prepare for rules that are taking effect.
What Happens to Open Banking and Consumer Finance?
U.S. open banking is moving through several channels at once. The Consumer Financial Protection Bureau's Section 1033 Personal Financial Data Rights Rule is still in place, but a federal court stayed its compliance dates on October 29, 2025. The CFPB is also reconsidering parts of the rule. Congress can influence what happens next through hearings, legislation and oversight, but it is not the only force at work. Courts affect timing, the CFPB can revise implementation within its authority, and banks, data aggregators and fintechs continue building commercial connections while the federal framework remains unsettled. See Open Banking and Consumer Driven Finance Interactive Intelligence.
Consumer finance could also attract more congressional scrutiny. Fintech lending, buy now pay later products, fees, credit reporting, privacy and automated underwriting are all areas committees can examine without waiting for a major new law. For operators, the near term signal is not a promised rule change. It is which practices regulators and financial firms are being asked to explain and defend publicly.
Can the SEC Keep Expanding Capital Formation?
Yes, where it already has authority to act. On October 27, SEC Chair Paul Atkins said more than 9,800 Regulation Crowdfunding offerings had taken place over the past decade, raising an average of about US$364,000. He also said:
“I have asked Commission staff to evaluate which aspects of Regulation Crowdfunding can be amended to reduce compliance burdens.”
The SEC is reviewing Reg CF while also examining accredited investor qualification and the public offering process. Congress can hold hearings, legislate or challenge the agency's direction, but the election does not automatically stop work the SEC can conduct under current law.
This is important in Canada because the U.S. Reg CF ceiling is already US$5 million, while Canada's NI 45-110 start up crowdfunding exemption remains capped at C$1.5 million per 12 months. The recent U.S. crowdfunding reform review provides a useful benchmark as the SEC considers further changes.
NCFA continues to recommend raising Canada's NI 45-110 issuer fundraising cap to at least C$5 million. That is NCFA's policy recommendation, not current Canadian law. If U.S. fundraising rules become easier to use while Canada's cap stays fixed, the competitive difference becomes harder for Canadian founders and policymakers to ignore.
Where Financial AI Gets More Scrutiny
AI probably will not move through Congress as one clean financial policy file. Banks and fintechs already use it in underwriting, fraud detection, customer service, advice and operations. AI agents are also beginning to interact directly with financial systems, raising harder questions about consent, authority and responsibility.
Congress can move faster through oversight than through a comprehensive financial AI law. Committees can ask how firms test automated decisions, prevent discrimination, control fraud and decide what an AI agent can do with money or account access. For firms, the early signal will be the questions banks, fintechs and regulators are required to answer, not simply the number of AI bills introduced.
What Do the US Changes Mean for Canada?
None of the November 3 election results changes Canadian law. Canada’s rules for banking, payments, securities, stablecoins, crowdfunding and consumer driven banking continue on their own timelines. But the business impact can still cross the border because Canadian firms compete for U.S. customers, capital, partners and infrastructure.
Canadian crypto firms need to watch whether CLARITY returns before January or is rewritten under the next Congress. Canadian wallets and payment companies also need to follow U.S. stablecoin rules because they can affect which U.S. dollar products, issuers, custody options and networks are practical to use.
See: The Next Open Banking Battle Is Decision Intelligence
Capital raising creates an even clearer comparison. If the SEC makes Reg CF easier to use while Canada keeps its C$1.5 million issuer cap, Canadian founders face a different fundraising market from U.S. competitors. Canada does not need to copy the U.S., but it does need to understand when U.S. rules make it easier or harder for Canadian firms to compete.
Open banking and AI can also affect Canadian firms even when the laws stay domestic. U.S. decisions on data access, bank connections, third party providers and AI agents can influence product design, partnerships and investor expectations for companies operating in both markets. Canada should set its own rules around Canadian priorities while keeping those cross border effects in view.
Takeaway
The U.S. midterms change who controls the congressional agenda, not the entire financial rulebook. Some files, especially crypto market structure, now face a different political path. Others, including stablecoin implementation, open banking litigation and SEC capital formation work, keep moving. January changes the negotiating table, not the starting point.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Canadian ESG Firms Face UK and EU Rules Abroad
November 4, 2026 | NCFA Story Intelligence | Sustainable Finance And ESG, Regulation And Policy, Competition And Market Structure
Canada keeps lighter rules at home while UK and EU requirements follow Canadian ESG firms into foreign markets
ESG ratings promised investors a shortcut.
Instead of digging through climate data, labour records, governance practices and supply chains themselves, they could buy a score and put it to work.
Then the scores started disagreeing.
The same company could look strong through one provider and much weaker through another. Nobody had to be cheating or doing bad work. One firm might care more about carbon exposure. Another might put more weight on labour practices, board governance or supply chains. Even when they looked at the same issue, they weren't always using the same data.
Investors were left with a problem. They had bought a shortcut and now had to check the shortcut.
In Britain, thousands of financial firms eventually built their own checks around ratings they were already paying for. The FCA estimates that extra work now costs about £495 million every year.
Regulators eventually made a choice that wasn't obvious at the start. They didn't force every provider to use the same formula. They started regulating the firms producing the ratings.
The EU rules have applied since July 2, 2026. On November 3, 2026, the UK Financial Conduct Authority published its final ESG ratings rules. From June 29, 2028, firms caught by the UK regime need FCA authorisation.
Canada hasn't followed them.
That gives a Canadian startup more breathing room at home.
Then it lands a customer in London, Paris or Frankfurt.
The Canadian rules haven't changed. The business suddenly has.
One provider knocks a company down for carbon exposure. The investor sees the score fall and assumes climate risk is driving the result. But that number also reflects choices about which indicators were used, which data was trusted and how the provider turned those inputs into a score.
Another barely moves on carbon but cuts the same company for governance or labour practices. The company itself hasn't changed between the two ratings. What changed is the lens used to judge it. Same company. Same ESG label. Different story.
Providers sign up, publish more detail and tighten their controls. They still get to build their own methods and scores. That keeps room for different models to compete, but it also leaves customers comparing very different ways of measuring the same company.
Customers keep doing their own checks anyway. Banks, asset managers and other users still have to decide whether the provider's data, methodology and controls are strong enough for their own decisions. More disclosure helps, but the doubt doesn't go away.
A rating only saves time if the buyer trusts the data, methodology and controls used to produce it. By this point, many firms aren't simply reading the score. They're reviewing the provider, checking the method and sometimes changing their own systems before the rating can be used.
By 2025, thousands of firms have built their own second opinion inside the company. Some are spending months onboarding providers and assigning staff just to close information gaps or resolve concerns before a rating can be trusted. The shortcut has created another job.
Before, a provider could follow the voluntary code and convince customers that its controls were good enough. The customer could accept that explanation, ask for more or walk away. The regulator wasn't deciding whether the provider could stay in the market.
Under FCA rules, that choice disappears. Firms in scope have to meet requirements around governance, conflicts, systems, data and disclosure, and they need authorisation to keep serving the market. If the firm is caught by the regime, meeting the standard becomes part of staying in business.
A smaller Canadian provider can still reach European customers without waiting for Canada to create its own ratings licence. Recognition can give qualifying foreign firms a way in when equivalence isn't available, so the market isn't closed to an independent Canadian provider.
But it still has to meet European requirements. Depending on the route, that can mean a legal representative, added documentation and direct accountability to ESMA. The company can stay Canadian, but its European business can't simply run on Canadian rules. Getting into the market is possible. Getting in on Canadian terms isn't.
A Canadian startup can build an ESG scoring product, test it and sell it at home without first getting a dedicated ratings licence. That leaves more of its early budget for product, data, hiring and customers instead of a new authorisation process.
Then it signs a foreign customer. New legal work, documentation, controls and regulatory relationships can arrive with the contract even though the product itself is unchanged. The product hasn't changed. The cost of selling it may have.
The Canada EU digital trade deal can make contracts, permitted data transfers and online delivery easier for smaller Canadian companies. That can remove friction from how a digital service is sold and delivered across the Atlantic.
If the product is an ESG rating, ESMA's rules still apply. A smoother digital sale doesn't replace recognition, endorsement or any other requirement that applies to the provider itself. The sale may get easier. The regulatory work doesn't disappear.
Providers still get to disagree and build different models. One can give climate more weight while another puts more emphasis on governance, and the FCA doesn't try to choose the winner.
What changes is how much of the work behind the score has to stand up to scrutiny. Providers have to explain more about the data, methods, conflicts and controls that produced the result. The rating can stay subjective. The process can't stay hidden.
UK applications begin in 2027. Firms expecting at least £500,000 in ESG ratings revenue over the following 12 months apply first. Smaller providers follow. For a Canadian exporter, the size and timing of the sales pipeline can therefore affect when the FCA application work starts.
A firm serving both the UK and EU can reuse some people, controls and documentation. That should keep the second market from starting entirely from zero, but the two regimes remain separate and each still has its own entry requirements. It can reuse the work. It can't reuse the permission.
When Does Regulatory Divergence Start Costing Canada?
Canada gets a real benefit from staying lighter.
A young ratings or analytics company can spend more of its first dollars on product, hiring and customers instead of building a licence around a market that may still be small.
That works well while Canada is the market.
Then the company wants to scale.
A UK customer can bring FCA requirements into the sales process. A European customer can bring ESMA. The Canadian company starts hiring compliance staff, changing contracts, documenting methods and adding controls that Canada never asked it to build.
Copying the UK or EU isn't an obvious answer either.
A Canadian licence would cost money. Plenty of firms may never need one. Large global providers can spread that cost across thousands of customers. A startup can't.
But staying different isn't automatically free.
If every Canadian firm with global ambitions has to build around foreign rules anyway, Canada's lighter model starts saving less than it first appears.
Canada hasn't crossed that line by law. Some Canadian firms may cross it much sooner.
At what point does regulatory divergence stop saving Canadian firms money and start making international expansion more complicated?
Ottawa hasn't answered that question. Canadian firms trying to sell abroad may answer it first.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Fintech’s Technology that Helps Sports Betting Evolution
Nov 4, 2026
Image: Unsplash/Luis Fallas
A winning bet is great, but getting your money into the account shouldn't be the hard part. Canadian payment technology is getting faster and smarter, with some interesting developments already underway. The question is whether sportsbooks can put those improvements to work where their customers will actually notice them.
Online sports betting is a pretty slick operation these days. You can watch a hockey game, check the odds on your phone and place a bet before the next face-off. But there's a fair amount of financial technology doing the work behind that simple transaction. Your money has to reach the sportsbook, your account needs to be verified, and everything has to happen quickly enough to keep up with the game.
Digital Payments Connect Betting Accounts to Financial Services
A sportsbook account is effectively a digital wallet. You deposit money, the balance appears in your account, and you can use it to place bets. The process looks simple because the payment technology handles most of the work without asking you to get involved.
There's plenty of money moving through these systems. Ontario recorded CA$11.4 billion in sports and other betting wagers during the 2024–25 financial year. That includes esports and novelty betting, but it gives you an idea of the workload behind Canada's regulated betting industry.
Welcome bonuses add another job for the software. A sportsbook needs to recognise an eligible deposit, apply the correct promotion and keep track of the conditions attached to the bonus. Sportsbook Review provides information about information about the Stake Bonus Code, including Stake's first-deposit match, promotional code and wagering requirements.
It's a good illustration of how much work happens behind the account balance you see on your screen. The customer makes the deposit, and the software handles the calculation.
Payment Infrastructure Supports Every Transaction
Moving money between a bank and a sportsbook takes more than a working internet connection. Payment processors have to authorise transactions and keep accurate records, even when thousands of customers are using the service.
Canadian financial businesses are spending money on the technology that makes this possible. Peoples Group and Fiserv are modernising payment infrastructure, improving the systems that financial services use to process transactions.
There's also a regulatory side to the business. Canada's Retail Payment Activities Act brought new requirements into effect on September 8, 2025.
Payment service providers covered by the legislation must manage operational risks and protect customer funds where applicable. Those obligations concern the businesses handling payments, rather than every sportsbook directly.
A betting operator needs dependable payment connections because customers expect their deposits to arrive and their withdrawals to be processed correctly.
Real-Time Payments Reduce Transaction Delays
Waiting for a bank transfer to clear is nobody's favourite pastime, particularly when you're trying to fund an account before a match starts.
Canadians are interested in faster alternatives. Payments Canada found that 52% of consumers considered real-time payments appealing, and 34% said they would likely switch to them when available.
Canada's Real-Time Rail is intended to make account-to-account transfers possible around the clock. Its planned introduction in the fourth quarter of 2026 would give participating financial institutions another way to move money electronically.
The benefit for sports betting is easy to understand. Faster payment confirmation could allow deposits to reach betting accounts sooner, assuming the operator supports the relevant payment method.
Withdrawals are slightly different. A sportsbook may need to verify an account or complete other checks before releasing the money. Real-time payment technology can speed up the transfer once those checks are finished, but it cannot do away with the checks themselves.
Nobody wants to miss the opening minutes of a match because their deposit is still making its way through the banking system.
Connected Financial Data Supports Better Decisions
Financial technology is also getting better at checking information. Secure connections between systems allow businesses to verify details without asking customers to enter the same information repeatedly.
Open banking is taking this further. Decision intelligence uses connected financial information to help businesses assess transactions and make automated decisions.
A sportsbook can apply similar technology to account verification. Payment details that don't match the registered customer, for example, can be flagged for closer inspection.
That leaves staff to investigate transactions that genuinely need attention, rather than manually checking every deposit that comes through the system.
Financial Technology Remains Central to Betting's Development
Sportsbooks have become very good at making complicated transactions look simple. You open an account, deposit money and get on with watching the game, without having to understand what the payment processor is doing.
That convenience depends on reliable financial systems. Faster transfers can reduce waiting times, and better account verification helps operators handle transactions accurately.
There's still plenty of room for improvement, particularly as Canadian payment technology develops. The next useful innovation might have nothing to do with the odds on your screen. It could simply mean your money gets where it needs to go without keeping you waiting.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Canada EU Digital Trade Deal Defines New Digital Business Framework
Canada EU Digital Trade Deal Defines New Digital Business Framework
November 3, 2026 | NCFA Regulatory Insight | Digital Trade, Fintech Regulation, Cross Border Services, Canada EU
Canada EU Digital Trade and Fintech Access
On October 30, 2026, Canada and the European Union concluded negotiations on the Canada EU Digital Trade Agreement, Canada's first concluded Digital Trade Agreement. The deal sets rules for trusted cross border data flows, electronic contracts, electronic signatures, electronic invoices and online consumer protection. It complements CETA rather than replacing it.
The agreement isn't signed or legally operative yet. Canada and the EU still have to complete their respective procedures before formal signature and conclusion. On the EU side, that includes legal review, translation into all EU languages and submission to the Council and European Parliament.
EU figures show bilateral trade in goods and services reached more than €130 billion in 2025, up from €72.1 billion in 2016. Digitally delivered services reached €19.8 billion in 2025, including €11.2 billion in EU exports to Canada and €8.6 billion in EU imports from Canada.
Canada EU digitally delivered services trade in 2025
EU exports to Canada
€11.2B
EU imports from Canada
€8.6B
Source: European Commission. Total digitally delivered services trade between Canada and the EU reached €19.8 billion in 2025.
What Changes for Companies Selling Digital Services?
The DTA seeks to prevent unjustified restrictions on cross border data flows and supports electronic contracts, signatures and invoices. Companies selling digital services between Canada and the EU can move more of the sales and delivery process online while still following the laws that apply to their service.
A software company serving European customers may need to move permitted business data, execute contracts, issue invoices and manage customer communications across two regulatory systems. Clearer digital trade rules can reduce duplicated processes and administrative work, which matters most to smaller firms that don't have large legal, compliance and operations teams. In summit remarks on October 30, Prime Minister Mark Carney said “A tech startup in Vancouver will have a smoother path to customers in Berlin.”
The final negotiated legal text hasn't yet been published, so businesses cannot assess every obligation, exception or enforcement mechanism. The October 30 announcements confirm rules on data flows, electronic contracts, signatures, invoices and consumer protection. Other provisions will need to be checked against the final text once released.
The agreement also covers misleading, fraudulent and deceptive online practices and sets rules around unsolicited commercial messages. Canada keeps the ability to regulate privacy, public sector data, government procurement, culture, cybersecurity, financial regulation and national security. Digital trade becomes easier without removing domestic control over regulated or sensitive areas.
Europe can still be an expensive market to enter. OECD research on the EU regulatory burden reports compliance costs equal to about 2.5% of turnover for SMEs. Turnover simply means annual sales or revenue. For an SME with €1 million in annual sales, 2.5% is roughly €25,000 spent dealing with regulatory requirements. The figure reflects costs reported for SMEs operating in Europe and does not mean every Canadian company entering the EU will spend exactly 2.5% of revenue on compliance.
What Does the Deal Mean for Canadian Fintechs?
Canadian fintechs can benefit from lower operating friction without gaining unrestricted access to the EU financial market. Financial software, compliance technology, digital identity, infrastructure, business finance platforms and other services that depend on data movement, electronic contracts or digital invoicing may benefit directly. A Canadian company selling technology to a European bank is in a different position from one providing regulated banking, payments or investment services directly to European customers.
A technology supplier may be able to contract with clients, deliver services and manage permitted data more efficiently without needing a financial licence of its own. A company providing a regulated financial service still has to meet the authorization and compliance requirements of the market where that service is offered. Canadian fintechs assessing a similar cross border question between Canada, the US and Mexico can refer to Does CUSMA Support Fintech Services Across Borders?.
See: How Canada Opened Its Financial Infrastructure
Canada and the EU also agreed to deepen work on digital infrastructure, AI, quantum technologies, semiconductors, advanced computing, data flows and interoperability. Separate summit commitments include work toward mutual recognition in digital identity and credentials, AI conformity assessments and cybersecurity.
Canada and the EU also plan closer financial cooperation, increased cross border capital flows and work toward connecting instant payment systems. In the same October 30 summit remarks, Carney said the two sides will “explore opening our markets to each other’s banks, insurers, and fintechs.” The statement points to future negotiations rather than current market access under the DTA. Canada Welcomes EU Associate Member Proposal provides additional Canada EU context around the broader relationship.
Takeaway
The DTA can reduce duplicated process and operating costs for Canadian companies serving European customers, but it doesn't remove the regulatory barriers around financial services. Deeper fintech market access still depends on separate work around licences, payments, regulatory recognition and interoperability.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Who Gets Accredited for Canada’s Open Banking System?
November 3, 2026 | NCFA Regulatory Insight | Open Banking, Consumer Driven Banking, Fintech Regulation, Canada
How High Will Canada Set the Bar for Open Banking Participation?
On November 2, 2026, the Bank of Canada launched a consultation on draft accreditation guidelines for Canada’s Consumer Driven Banking Framework. The framework is supposed to do more than make financial data sharing safer. The federal government has made competition, innovation and economic growth one of its three policy objectives, alongside consumer protection and financial system safety. That makes the accreditation bar more than a compliance question. How demanding the rules become will help determine which banks, fintechs and other providers participate, and how much real competition open banking ultimately produces.
That competitive promise depends on who can actually enter the system. Canada already has about nine million people sharing financial data through screen scraping, according to the federal framework, so there is an existing market for services that could move into regulated open banking. If accreditation is too expensive or difficult for credible fintechs to obtain, consumers may get safer data sharing without enough new providers to materially improve choice, pricing or service.
The Competition Bureau has warned about this risk for years. The Bureau's October 2026 submission on Canada’s draft Consumer Driven Banking Regulations says smaller fintechs, challenger banks, credit unions and emerging firms can face proportionately higher implementation and compliance costs, and that these costs can discourage entry or expansion. The Bureau supports strong safeguards but recommends that requirements reflect factors such as risk, size, activity and access to consumer data.
NCFA's Open Banking & Consumer-Driven Finance Interactive Intelligence has tracked the same tension across competition, accreditation, switching, innovation and global market design. The question now moving from policy into supervision is whether Canada can protect financial data without setting an entry bar that leaves too few challengers in the market.
What Is the Bank of Canada Consulting On?
On November 2, 2026, the Bank of Canada opened consultation on its first draft supervisory guidelines for accreditation.
Comments are due December 8, 2026, and the Bank specifically asks whether any part of the drafts needs clarification, would be difficult to implement, needs more examples or could “discourage voluntary participation.”
The consultation does not reopen the full Consumer Driven Banking Framework. It deals with how the Bank proposes to assess accreditation applications under the Consumer Driven Banking Act and proposed regulations. The two draft guidelines cover participating entities and accredited Third Party Service Providers, with later Bank consultations expected on other supervisory topics.
Which Accreditation Route Applies in Canada?
Canada proposes three accreditation routes for participating entities. The route depends largely on whether the applicant already operates inside another regulatory framework, while accredited Third Party Service Providers sit beside these three routes under a separate guideline.
1. Standard accreditation for independent applicants. This route applies generally to eligible corporations, trusts, partnerships, funds and other organizations that are not registered payment service providers or federally or provincially regulated financial institutions. The participating entity draft guideline requires the broadest evidence package under this route, including governance, security, technical compliance, consumer dashboards, complaints, insurance or guarantees, operations and national security information.
2. Streamlined accreditation for registered PSPs. Payment service providers already registered under the Retail Payment Activities Act can use a separate streamlined route. They still need to provide security, technical, insurance, governance, operating and national security evidence, but the Bank can rely on regulatory information and oversight that already exist rather than requiring every control to be established again from the beginning.
3. Streamlined accreditation for regulated financial institutions. Banks, authorized foreign banks, trust and loan companies, credit unions, caisses populaires, insurers and certain provincial Crown corporations can use the narrowest participating entity route. Their existing prudential regulation carries more of the supervisory burden, while the draft focuses particularly on technical compliance and a declaration from the responsible senior officer that required security safeguards are in place.
Accredited Third Party Service Providers (TPSPs) use a separate pathway. A TPSP is a company that performs specified technology or operational functions for an accredited participant. The TPSP draft guideline applies when a provider performs activities such as obtaining or managing consent, handling authentication, or providing or receiving consumer data. A software company does not need TPSP accreditation simply because it sells technology to a bank or fintech.
The structure already contains some proportionality. Firms with existing supervision get more streamlined treatment, while independent applicants carry more of the accreditation burden themselves. The unresolved competition question is whether prior regulatory status should be the main route to lower burden or whether lower risk independent fintechs should also have a staged way into the market.
What Will Applicants Need to Prove?
The standard route requires more than corporate information and a security policy. Applicants need an operating evidence file covering ownership, governance, responsible people, regulatory status, security safeguards, technical standards, consumer dashboards, complaints, insurance, expected activity and national security information. The Bank can also request more information while reviewing an application.
Security will require independent confirmation, but firms may be able to reuse credible work they already maintain. The draft says ISO 27001 certifications, SOC reports and NIST based assessments may support an application when an independent assessor maps that work to the Bank's safeguards and explains its scope and limitations. The Bank expects the confirmation to rely on an assessment completed within the previous 12 months.
Insurance also follows a risk based approach. Standard applicants and registered PSPs are expected to hold professional indemnity and cyber insurance, or comparable guarantees, but the Bank does not prescribe one coverage amount for everyone. Applicants need a documented methodology that considers factors such as data sensitivity, data volume, operating scale, complexity and potential losses from privacy, cyber or operational incidents.
Some important costs remain difficult to calculate. The draft guidelines say more information on accreditation fees and the web application process is forthcoming, and the participating entity guideline notes that the Technical Standards Body had not been designated when the draft was prepared. Firms can prepare much of their governance, security and insurance evidence now, but they still cannot fully map the cost and timing of accreditation.
How Do Canada, the UK and Australia Compare?
The UK and Australia show two different ways to make regulatory burden more proportional without removing consumer protection. Both markets allow firms to participate at different levels instead of requiring every company using open banking infrastructure to clear the highest regulatory bar itself.
The UK's Financial Conduct Authority allows a firm providing only account information services to use the registered account information service provider route. A business that combines account information with other regulated payment services needs authorization instead. Firms can also operate as registered agents on behalf of regulated principals. Those agents are part of the regulated ecosystem but do not hold the same independent authorization as their principal. They provide regulated services through that principal, which remains responsible for the activities covered by the arrangement.
Open Banking Limited reported 145 third party providers with live open banking propositions and another 406 registered agents in its 2025 impact report, with potentially thousands of additional firms using open banking data and payments through regulated providers. Open Banking Limited also reported more than 19 million active user connections and over 40 million open banking payments per month in 2026. That does not prove every UK regulatory choice should be copied, but it shows how participation can extend well beyond firms holding their own direct regulatory permission.
Australia goes further by creating several distinct participation routes through its Consumer Data Right accreditation framework. A firm can become fully accredited, obtain sponsored accreditation under a fully accredited sponsor, or participate without its own accreditation as a CDR representative under a written agreement with a fully accredited principal. Each step gives up some independence in exchange for a lower direct entry burden.
In 2025 to 26, Australia's competition regulator reported 30 active accredited data recipients and 178 active CDR representative arrangements. Representative arrangements are not the same as 178 unique companies, but the gap shows how much participation can occur outside full accreditation.
| Issue | Canada draft | United Kingdom | Australia | Lessons for Canada |
|---|---|---|---|---|
| Full direct participation | Independent participating entities can seek standard accreditation and participate directly | Authorized providers can deliver the regulated open banking services covered by their permissions | Unrestricted accreditation allows full participation, including collecting CDR data directly from data holders | Canada already has a full direct route. The larger policy question is whether every credible new entrant should need to start there. |
| Lighter direct route | Registered PSPs and regulated financial institutions receive streamlined treatment because another regulator already supervises them | A firm limited to account information services can use registration rather than broader payment services authorization | Sponsored accreditation reduces the evidence burden but requires an unrestricted accredited sponsor | Canada has no comparable lighter route for an independent fintech based only on lower risk or a narrower activity. Streamlining is mainly reserved for firms already regulated elsewhere. |
| Participation without full direct approval | TPSPs can perform specified functions for participating entities, but the draft does not create a broad representative route for an independent consumer facing fintech | Registered agents can provide regulated services through an authorized principal without holding equivalent independent authorization themselves | A CDR representative can offer its own goods or services to consumers without holding accreditation under a written arrangement with an unrestricted accredited principal | Canada has no broad agent or representative route that lets an independent consumer facing fintech enter under another accredited firm's responsibility. |
| What the lighter route gives up | Streamlining mainly benefits firms that have already entered another regulatory regime | A narrower permission limits the regulated services the firm can provide independently, while an agent depends on its regulated principal | A sponsored firm cannot collect CDR data directly from a data holder, while a representative depends on its accredited principal | Canada currently gives smaller entrants less ability to trade independence for a lower entry burden. The UK and Australia make that tradeoff explicit. |
| Security evidence | Standard applicants need independent confirmation, although existing ISO, SOC and NIST work may support the evidence | Security and operational controls remain required under the account information registration route | Sponsored applicants can self assess and attest to relevant information security compliance instead of providing the third party assurance report required for unrestricted accreditation | Canada can consider whether every lower risk direct participant needs the same independent assurance burden at entry. A lighter route could still preserve security requirements. |
| Insurance and financial protection | Relevant participating entities need professional indemnity and cyber insurance or comparable guarantees, with coverage tied to risk | Registered account information providers still need professional indemnity insurance or a comparable guarantee | Accredited recipients must demonstrate adequate insurance, while responsibility under representative arrangements sits with the accredited principal | Lower entry burden does not require weaker financial protection. Canada could vary the route while keeping insurance and accountability requirements in place. |
| Evidence of participation | The accreditation system has not launched, so Canada does not yet have participation results to compare | 145 live third party providers plus 406 registered agents were reported in the 2025 Open Banking Limited impact report, with potentially thousands of other firms using open banking data and payments through regulated providers | 30 active accredited data recipients and 178 active representative arrangements were reported for 2025 to 26 | The UK and Australia show that participation can extend far beyond firms holding the highest level of direct approval. Canada has not yet created an equivalent ladder for independent entrants. |
| Independent fintech with no existing regulatory status | Generally faces the standard participating entity route if it wants to participate directly | May qualify for registration if it limits its regulated activity to account information services, or may operate through a regulated principal depending on its role | Can seek sponsored accreditation or potentially participate without accreditation as a CDR representative | This is Canada's clearest gap. A credible lower risk fintech with no existing regulatory history has no sponsored, representative or narrow activity based route comparable to those available in the UK or Australia. |
| Where responsibility sits under lighter entry | Responsibility follows the statutory role of participating entities and TPSPs | The regulated principal remains accountable for the regulated services provided through its registered agent | The unrestricted accredited principal is responsible for its CDR representative, while a sponsor supports a firm using sponsored accreditation | Canada could let a stronger accredited participant carry more responsibility for a smaller entrant. Australia shows one way to lower entry burden without leaving responsibility unclear. |
| Bottom line | Canada is relatively lighter for firms already regulated, but more demanding for an independent fintech that wants to participate directly without that regulatory history. | The UK allows participation at several levels. Directly regulated providers sit alongside hundreds of registered agents operating through regulated principals, plus a wider group of firms using open banking through regulated providers. | Australia has the clearest participation ladder. Full accreditation, sponsored accreditation and representative arrangements let firms participate at different levels of independence and responsibility. | Canada's draft leaves independent new entrants with fewer ways in. The main policy choice is whether to add a limited, sponsored or representative route without weakening security or accountability. |
The comparison does not show that one country simply has weak rules and another has strong ones. The UK and Australia still require security, accountability and financial protection. The larger difference is how many ways a company can enter the ecosystem and how much independence it receives at each level.
In the UK, direct regulation is only one part of the market. Hundreds of registered agents operate through regulated principals, while a much larger group of firms can build open banking data or payment functionality into their products through regulated providers. Australia makes that ladder even more explicit. A firm can carry full accreditation, accept less independence under sponsored accreditation, or offer services as a representative while the accredited principal carries the regulatory responsibility.
Australia reported almost six active representative arrangements for every active accredited data recipient in 2025 to 26. That ratio should not be read as a direct count of companies or as proof that Australia's model is superior, but it does show that participation can become much broader when full accreditation is not the only practical entry point.
Canada already does something similar for registered PSPs and financial institutions by recognizing supervision they have completed elsewhere. The main gap is the independent fintech that creates limited risk but does not yet have a regulatory history that qualifies it for a streamlined route.
See: Canada Real-Time Rail Rules and Access
Also Canada already has a recent example of why voluntary participation cannot be taken for granted. BetaKit reported in October 2026 that none of Canada’s Big Six banks was then scheduled to participate in the first phase of the Real Time Rail, citing four fintech sector sources familiar with the rollout. The Real Time Rail and consumer driven banking are different systems, but the participation lesson is relevant. New financial infrastructure does not create competition by itself if major institutions or smaller providers decide the cost, timing or operating burden is not worth joining.
Could Canada's Entry Bar Limit Competition?
The Competition Bureau's October 23 submission puts that issue directly on the table. It supports strong accreditation, reporting, audit and security requirements but warns that fixed compliance costs can weigh more heavily on smaller firms and discourage entry or expansion.
The Bureau recommends considering requirements according to risk, size, activity and access to consumer data. It also suggests a provisional or tier based accreditation model that could let firms enter earlier under appropriate safeguards and move toward full accreditation as their operations and risk grow. Canada's current Bank draft does not create that model.
The Financial Consumer Agency of Canada found that switching barriers can reduce competitive pressure and weaken incentives for providers to compete on price and service. Consumer driven banking can improve comparison and portability, but those advantages are worth less if consumers don't have enough credible alternative providers to choose from.
NCFA's Canada Open Banking Rules and Regulations tracks the broader accreditation, security, liability and supervisory framework. The Bank's current consultation is where those rules begin translating into the practical cost of entering the market.
Canada does not need weaker protection to increase participation. It needs to decide whether security and accountability can remain firm while the pathway to meeting those outcomes varies with the activity, risk and maturity of the applicant. The UK and Australia show that proportionality can be built into market access rather than added after firms have already absorbed the full cost of entry.
How Long Could Accreditation Take?
The Bank does not promise a standard approval time. Once an application is complete, the Bank sends a copy to the Minister of Finance and begins its own review. The Minister has 60 days to decide whether a national security review is needed and can extend that decision period in additional 60 day periods.
If a national security review is opened, the review period is 180 days and can also be extended in additional 180 day periods. Not every applicant will undergo a full review, but the Bank cannot grant accreditation while the Minister's decision or review remains outstanding. Firms tying financing, hiring or product launches to accreditation need to plan for timing they cannot fully control.
See: Real Time Rail Puts Canada’s Productivity Test In Focus
A refused applicant can generally request review within 30 days. The Bank's delegated decision maker can accredit the applicant or confirm the refusal within 120 days after the applicant has had an opportunity to make representations, and a further appeal can go to Federal Court. Once applications begin moving through the system, publishing normal processing times would help founders and investors distinguish routine accreditation from exceptional delay.
What Should Firms Tell the Bank Before December 8?
The Bank wants written feedback by December 8, 2026. Respondents should identify themselves, use the subject line specified on the consultation page, identify the relevant part of the draft and explain the implementation issue as specifically as possible. Commercially sensitive information should only be submitted when it is clearly identified.
Fintechs should put numbers around the burden wherever they can. If security mapping needs 120 staff hours, another assurance exercise costs $40,000, insurance materially increases annual operating cost, or Canadian presence changes the economics of entry, those figures tell the Bank more than simply calling a requirement burdensome.
Registered PSPs and financial institutions should identify evidence another regulator already holds and where the Bank can safely avoid duplication.
Independent fintechs should explain whether a limited, provisional or sponsored route would change their ability or willingness to enter Canada, while TPSPs should identify where responsibility for consent, authentication and data handling remains unclear between provider and participating entity.
NCFA believes Canada should add a proportionate entry route for credible lower risk fintechs that are not already supervised under another regulatory regime. The UK and Australia show that this can be done without removing accountability. Canada should consider narrower permissions for narrower activities, sponsored participation through an accredited firm, or a representative model where a stronger regulated participant carries more responsibility while a younger company proves its product, controls and operating record before seeking full independent accreditation.
Bottom Line
A framework that protects data but attracts too few credible challengers will struggle to deliver the competition, consumer choice, innovation and pricing pressure that consumer driven banking was built to support. The December 8 consultation deadline gives industry a chance to influence that balance before the entry rules become embedded in Canada's open banking market. Responses can be emailed to SupervisionInfo@bank-banque-canada.ca
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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BDC Launches Mission AI to Help Canadian SMEs Adopt AI
November 2, 2026 | NCFA Market Activity | Artificial Intelligence And Data, SME Finance And Business Banking, Canada
BDC Connects AI Adoption, SME Productivity and Financing
On November 2, 2026, the Business Development Bank of Canada BDC launched Mission AI and AI Studio to improve AI adoption and financing for Canadian SMEs. Mission AI will test Canadian AI products with small and medium sized businesses and measure whether they improve real business workflows. AI Studio is an internal BDC initiative that will also build and deploy AI inside the bank to make support and financing faster, simpler and easier for entrepreneurs to track.
BDC works with thousands of SMEs and, as of September 2026, was directly or indirectly invested in more than 300 Canadian AI companies representing nearly C$800 million in total investments. Mission AI connects Canadian AI suppliers with SME buyers. AI Studio applies AI to BDC's own lending and service operations, where document collection, analysis, underwriting and servicing all carry costs.
According to BDC, 69% of Canadian SMEs are AI Novices, meaning they use AI rarely or not at all. Another 83% remain in the learning phase and only 5% qualify as AI Leaders with AI deeply integrated into operations and decisions. BDC's June 2026 AI and digital transformation research found that 30% of SMEs use generative AI and that users in its study were 24% more productive than nonusers. The 24% figure is an observed difference, not proof that AI caused the full gain.
Mission AI Targets the Gap Between Trying AI and Using It
Mission AI starts with business problems rather than software. BDC plans to identify common SME needs, find Canadian AI products that address them and test those products with panels of entrepreneurs. Examples include preparing quotes in minutes instead of hours, processing invoices, following up on sales opportunities and using AI agents for routine customer questions and bookings.
Dominic Gagnon, Managing Director of Mission AI, says “An entrepreneur should not have to become an AI expert to benefit from it.” BDC plans to use real deployments and measurable results to show other businesses which products work and how they can be implemented.
An SME owner still has to decide whether a product is credible, whether it works with existing systems, how much staff time implementation will consume and whether the expected gain justifies the cost. If the same Canadian product repeatedly cuts quoting time, invoice handling or administrative work across comparable businesses, the next buyer has operating proof instead of a vendor claim. BDC has not said Mission AI products will be free or offered at discounted prices, so affordability will still matter once a business moves beyond testing. Mission AI can therefore reach businesses that are much earlier in AI adoption than the firms eligible for BDC's larger technology financing programs.
BDC's C$500 million LIFT program is more selective. Its digital transformation and AI stream is available to Canadian businesses with at least C$1 million in annual revenue, demonstrated profitability, a strong financial foundation and solid credit history. A BDC Advisory Services digital plan is mandatory, and financing ranges from C$25,000 to C$2 million for eligible investments including data infrastructure, AI implementation, enterprise systems, cybersecurity, training and integration.
The 2026 Bank of England and FCA AI survey shows how adoption changes as firms move further into deployment. Some 86% of responding UK financial firms use AI. Among firms completing the short survey, 73% use AI and 64% report current or planned use in operations. These are regulated financial firms rather than Canadian SMEs, so the percentages are not directly comparable.
Only around 7% of the AI systems reported by UK firms were considered highly material. Integration into existing business processes remained a major constraint. High adoption did not remove the harder work of integration, controls and human oversight.
BDC's digital research puts more numbers beside Canada's AI Productivity Test Is Execution: 96% of Canadian SMEs use at least one digital technology, but only 23% have high or very high digital maturity. BDC estimates Canadian GDP could eventually be nearly 14%, or C$350 billion, higher if SMEs reached the digital maturity of the most advanced firms. The estimate covers digital maturity broadly rather than AI alone.
BDC Could Become a Distribution Channel for Canadian AI
Canadian AI companies need customers, implementation evidence and repeatable sales channels. Selling one small business at a time can be expensive because SME buyers are fragmented, contract values are smaller and each customer may need help deciding whether an unfamiliar product is worth adopting. BDC already has relationships on both sides of that transaction. Its AI portfolio includes companies working in robotics simulation, mining, regulatory intelligence, health and procurement, while its SME client base provides businesses where products can be tested against operating problems.
A product that performs well across several Mission AI businesses can produce more than a case study. The vendor can see which customer profile gets the strongest result, how long implementation takes, where adoption stalls and which operating result convinces a customer to keep paying. That information can lower customer acquisition costs and make subsequent sales easier.
BDC could become a validation and distribution layer between Canadian AI suppliers and the SME market. Successful vendors get operating evidence and customer access. SMEs get a lower risk way to evaluate products that may otherwise be difficult to compare. That also pushes BDC closer to work already performed by private AI advisors, software marketplaces, consultants and systems integrators. BDC describes its development role as market complementary, but Mission AI will source, validate and help scale selected AI products. If that process becomes an important route to SME customers, BDC will need to show that it is filling an adoption gap rather than displacing private firms that can already perform the same function.
BDC also has financial exposure to hundreds of Canadian AI companies while Mission AI will select products for use with participating SMEs. Clear vendor selection criteria, comparable performance measures and disclosure of any preference given to portfolio companies would help preserve confidence in the results. BDC has not yet published that level of operating detail.
AI Studio Targets SME Lending Friction Inside BDC
AI Studio is not a separate private company. Technology entrepreneur Raff Paquin will lead it. BDC cites his experience across Shopify, Lightspeed, Altitude Sports, Frank And Oak and Return Magic. His current LinkedIn profile identifies Panorama as his main affiliation rather than BDC.
Paquin says “We'll focus on tools that help our clients get answers faster, access financing sooner and spend less time on administration.” BDC says AI Studio is intended to reduce time to money while giving entrepreneurs better visibility and predictability during financing.
A BDC small business loan application begins with an eligibility check and information about the company, its leadership and shareholders. BDC may require financial information and supporting documents before completing its review, and applications remain subject to a full assessment of the business and its owners.
For loans up to C$100,000, BDC says applicants are more likely to qualify when the business has at least C$100,000 in annual revenue, a personal credit score of 600 or higher, current profits and at least 24 months in business. BDC advertises approval in less than 10 days when the required information is supplied. For loans above C$100,000 and up to C$350,000, the revenue guideline rises to C$250,000 and BDC advertises approval in less than 30 days.
AI Studio can reduce work surrounding the credit decision. Applications can be checked for missing information before an advisor opens the file. Documents can be classified and summarized. Financial data can be extracted without repeated manual entry. Inconsistencies can be identified earlier and routine status questions can be handled without another staff handoff. Advisors can spend more time assessing the borrower and less time assembling the file.
The Bank of England and FCA survey shows a similar pattern inside regulated financial firms. Operations and IT account for about 31% of reported AI systems and 80% of respondents use AI agents for decision support. Even including planned adoption, no more than 9% expect agents to approve or decline customer outcomes, initiate or block payments, execute trades or change limits and controls. Automation is moving deeper into the work around financial decisions while autonomy over consequential decisions remains limited.
BDC has not said AI Studio will approve loans, lower credit standards or change approval authority. Faster processing is not the same as easier credit. The fintech opportunity is lower origination and servicing costs, better information flow and less administrative friction without removing human judgment from credit decisions.
BDC has already been increasing its exposure to borrowers outside standard lending models. Its 2026 annual reporting says the bank holds a higher share of younger and higher risk businesses and is leaning further into its development mandate. BDC separately reported that the dollar value of transactions authorized to elevated risk businesses was 21% higher in fiscal 2026 than in fiscal 2020.
Its 2025 results also reported that businesses with less than C$2 million in annual sales represented 68% of its portfolio and that BDC had tripled the number of small loans since fiscal 2010. BDC said it had deliberately increased financing for unconventional business models and borrowers with weaker equivalent credit grades.
Smaller and less conventional borrowers can require more analysis even when the eventual loan is modest. A young technology company, a business with uneven cash flow or a firm without a long credit history may take more work to assess than an established borrower with predictable earnings. Better document processing can lower the cost per file, while better information can give an advisor more time to understand the business and the risks that matter.
BDC, Woveo, Peloton and Driven SME Financing also shows why small loan economics matter. Verification, underwriting and servicing costs do not fall in proportion to the loan size, which can make smaller financing expensive to deliver.
The strongest outcome would be better SME credit decisions, not just faster processing. If AI helps BDC assess smaller and less conventional businesses more accurately while lowering the cost of each file, AI Studio could improve both access to capital and lending efficiency.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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