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Navigating the Great Reset: Fintech in Canada in 2020

Remillard Consulting Group | Richard Remillard | Dec 11, 2019

2020 outlook financial services - Navigating the Great Reset: Fintech in Canada in 2020

At this time of year, predictions for 2020 are starting to rain down with as much frequency as occurs in Vancouver in the winter months. At the risk of waterlogging readers and, hopefully, with slightly more accuracy than weather forecasters in the era of climate change here are some fearless predictions for what might stay the same and what might change next year – and what to do about it.

The Big Picture: The Great Reset

We are decidedly in the midst of several upheavals in the relations between nations, between corporations and between individuals. Relations between the US and China, between the European Union and Great Britain, between Russia and Ukraine are shifting tectonically, with uncertain outcomes on all fronts.

Nevertheless, it looks like President Trump will survive impeachment by the Democrats and get re-elected. The US economy remains very strong, there have been no new messy foreign entanglements, stock markets are up, and there’s bipartisan consensus on getting tough with China. And, he can chalk up a USMCA in the win column.

Similarly in Canada, the governing Liberal party will still be in power in twelve months’ time, buttressed by the NDP and the BQ while the Conservative party will remain internally divided, whether Mr. Scheer survives or not.

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Financial Services: Turmoil

Canada’s largest financial institutions will have a difficult year ahead. They are shedding staff who could be scooped up by challenger institutions(fintechs), are facing higher regulator-imposed capital buffers and an increasing number and diversity of attacks on their business model – witness Schwab’s move to zero commission trading accounts and its impact on TD Ameritrade. Their capital markets revenues will continue to be under pressure, particularly as public listings (via IPOs) continue to be few and far between.

The outlook for public markets remains cloudy and so more and more capital will continue to flow into private capital markets which will continue to be ‘frothy’, thereby setting the stage for the ‘overheated’ phase of the business cycle – which could occur as early as  2021- 2022.

Specialty funds will continue to be assembled, be they in financial services or clean tech or in the social impact areas. In fact, fintechs that can reach out to disadvantaged groups in our society so that they are included in the financial world more than at present are likely to find traction from a variety of places, including the $755 mm Social Impact Fund that was announced at the end of last year by the federal Minister of Finance.

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And, can anyone step up to replace the payday lenders?  For financial services, insurtech will likely begin to catch up to other fintech areas such as payments, remittances and wealth management. Canada has several fintechs that are approaching unicorn status and 2020 will see at least one of them reach that lofty valuation realm.

The giant tech firms – Facebook, Amazon, Google, Microsoft, Alibaba,Tencent,etc. are likely to shy away from assaulting the Canadian financial services market directly in 2020 as it is too small for their ambitions and capital and the larger Canadian financial institutions remain too well-entrenched. This could change were Open Banking to occur in Canada in 2020 - but, this is very unlikely with a minority government, even one backed to all intents and purposes by left-leaning parties.

In addition, the Great Re-set continues with the various experiments into blockchain and crypto-currency. This interim period will likely last until 2022- 2023 by which time the weaker players in what has been a Wild West will evaporate as these new technologies enter their own consolidation phase – much as had happened in the automobile industry in 1914 versus 1944.

On the regulatory front, ‘plus ça change’, but there are rays of hope.

Canada’s financial services industry continues to be overregulated at all levels, even extending to the self-regulatory associations representing financial planners. On a positive note, securities regulators have announced their intention to proceed with the harmonization of crowdfunding exemptions in the Spring of 2020 – and there are even initial signs of Ontario moving forward in advance of that time-frame.

On the other hand, the Canadian Cooperative Markets Regulator has disappeared down the rabbit hole of bureaucracy never to be heard from again. All in all, growth opportunities for regtech firms will remain strongly positive.

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RCG 2020 outlook NCFA - Navigating the Great Reset: Fintech in Canada in 2020


What to do?

Capital raising for fintechs in Canada will continue to improve across all stages of company development in 2020 as dedicated funds and corporate strategics pile into this space. This may not still be the case in 2021, if the music stops. Better to grab the cash sooner, rather than later. As well, and despite the looming threats of trade barriers, the worldwide competition to disrupt traditional financial services business models means that there is great receptivity to Canadian fintechs abroad, particularly in Asia, given the strength of the Canada and Canadian financial services brands globally.

Retail investors, with a domestic market and yield focus, will continue to be receptive to financial products that can deliver CPI plus 4 – 6 percent returns and will look for ways to access private capital markets. These pressures may push regulators to revisit the definition of accredited investors, extend the concept of flow-through shares to broader swathes of the economy and permit pooled investment vehicles to increase their portfolio allocation to private equity and credit.




NCFA Jan 2018 resize - Navigating the Great Reset: Fintech in Canada in 2020 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:

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