Reasons Why Toronto Tops Financial Technology in Canada

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NCFA Guest Post | June 27, 2017

Canada ranks highly in terms of innovation, and the adoption of sophisticated technology. For example, mobile technology increased at a rate of 23.63% (year-on-year) in 2015, and the rapid advances in mobile technology are being adopted by many industries across the board. In 2014, a study indicated that 55% of Canadians owned smartphones. Fast forward to 2015, and the penetration rate of smartphones reached 68%. This increase represented a 23.63% uptick – remarkable by all standards.

Most Canadian smartphone owners own multiple devices, with the mean number of smartphones per person at 2.12 in 2014. That number increased to 2.37 in 2015, an increase of almost 12%. Across Canada, the demographics with the strongest growth in smartphone, tablet, and phablet ownership were the 25 – 34 age group and the 45 – 54 age group. This indicates that an increasing number of established people are buying into the tech scene, and this is helping to propel Fintech across all 10 provinces in Canada.

The smartphone revolution has filtered through social strata and demographics, and now impacts Canadians across the spectrum. It has become an indispensable part of daily life, and Canadians are turning to these mobile devices over traditional PCs, laptops and notebooks. From social media to banking, communication and work, mobile technology has evolved at a rate of knots. Between 2014 and 2015 for example there were increases in smartphone usage across the board. The most notable increases are with online streaming, online shopping, navigation, videos, apps, paying bills, checking the weather, applying for a business loan, communicating via social media, and reading the news. It makes sense that Fintech is an integral component of the mobile experience.

Canadian Banks Adopting Fintech

Canadian banks have not wasted a beat when it comes to cutting costs and increasing their efficiency. Fintech companies abound in Canada, and they provide innovative solutions at a fraction of the cost of traditional banking. Banks across Canada are implementing Fintech technology to stay ahead of the pack. They realise that they run the risk of losing business to the non-bank sector if they don’t adopt this technology. Multiple Canadian banks have developed their own proprietary Fintech systems, including Scotiabank with its Digital Factory which now serves 23 million clients across Canada.

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A San Francisco-based Fintech company – Ripple Labs – has partnered with Scotiabank, National Bank of Canada, RBC, CIBC and BMO to expedite international money transfers utilising blockchain technology. Various Fintech accelerators have also been launched to develop the bustling Fintech industry in Toronto. An example of how big financial technology is in Toronto is evident with the $30 million capital raised for start-ups by Ventures.

Toronto Fintech is Rapidly Gaining Prominence

Toronto is an integral component of the Canadian Fintech scene. The world’s foremost incubators and accelerators of technology including OneEleven, DMZ and MarS are all based in Toronto. As a case in point, UBI Global has incubated more than 260 start-up operations and the company is also the recipient of the 2016 Fintech Awards in Canada. Even the Canadian government has jumped in on the bandwagon, with C$1 billion allocated for developing innovative clusters throughout the country.

The Canadian government wants to ensure that innovative technology is available to Canadians across the country. Business-friendly regulations are being introduced to support Fintech growth and development in the province of Ontario. And Toronto is spearheading the pack as a leader in global financial services. The leaders in Fintech include London, New York, Hong Kong and Singapore.

Behind the leaders are Jakarta, Abu Dhabi and Istanbul. Toronto is certainly well-positioned to become a power player in Fintech. Regulatory frameworks are already in place, and the human, technical, and financial capital are available to accelerate the growth of this industry. Toronto is also booming with AI. Artificial intelligence start-ups have blossomed in this Canadian city, and this dovetails perfectly with the innovative technology in the financial sector.

 

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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