Canadian Fintechs Positioned for Growth, more Innovation needed for Global Leadership

As the Canadian fintech sector looks to rebound from challenges brought on by the pandemic, its future global strength will depend, in part, on the willingness and ability of all ecosystem players to foster innovation, collaborate and expand internationally, finds a new report from Accenture (NYSE: ACN).

The global study, Collaborating to Win in Canada’s Fintech Ecosystem, benchmarks four Canadian technology hubs against 16 other leading and emerging fintech hubs around the world. Overall, Toronto ranked 8th, Vancouver 12th, Montreal 14th and Calgary 16th out of 20. The report also examines global investment growth trends across all hubs, noting that that Canada punches above its weight in terms of number of deals closed while total deal value is more subdued compared to leading global hubs.

The analysis found that Canadian cities are already benefitting from strong foundations provided by government support and high-quality talent, but they are behind tech hubs such as Hong Kong, London and Singapore when it comes to overall fintech adoption.

“We are optimistic about the future potential of the Canadian fintech ecosystem and the role of startups and other institutions in how they embrace change that will benefit the overall financial services industry in Canada,” said Robert Vokes, senior managing director and financial services lead at Accenture in Canada. “Canada has much to learn and much to contribute to our global peers, including those who are developing open banking, digital identity and data portability solutions. Our ecosystem of Canadian fintechs, major financial institutions and policymakers are coming together to transform and reinvent business models that address the changing digital habits of Canadians – they are shaping and developing future standards that will support the industry while preserving the strength of our financial system.”

“As we look beyond the pandemic, the Canadian financial services ecosystem remains poised to grow. Canadian fintechs are adopting a borderless mentality, raising international investor interest, while financial institutions are taking on the mindset of technology companies now more than ever,” said Vikas Shreedhar, managing director and cloud leader at Accenture in Canada. “With both market and regulatory forces pushing Canadian fintechs into the spotlight, the financial services ecosystem will have the potential to deliver the most personalized and seamless digital experiences Canadians have ever seen thanks to advances in cloud, artificial intelligence and application programming interface capabilities.”

Closing the gap between Canada and leading global fintech hubs will take a patient, coordinated effort across the ecosystem. To ensure Canadian fintechs and financial institutions learn from 2020 and use their momentum to emerge from the downturn even stronger than before, the report identified three thematic areas that will be key:

Advance the Innovation Agenda: Despite world-class institutions and substantial public investments in research and training, Canada continues to struggle with scaling these startups into high-tech, homegrown multinationals. Further development of regulatory sandboxes could be one approach that benefits innovative companies while balancing the public interests of financial stability and security.

Strive for Global Ambitions: Further accelerating the growth of Canada’s financial services ecosystem will require not only cross-border talent but doubling down on international expertise and capital as well. Canadian fintechs are increasingly looking to grow beyond Canada with a “borderless” mentality, raising international investor interest in the Canadian ecosystem. Foreign participation in Canadian fintech deals has also been a significant contributing factor to maintaining Canadian hubs’ position among the fastest growing in the world.