Canada at the Forefront of the FinTech Scene
According to Gerald Cotton, CEO of the Canadian Bitcoin exchange, Quadriga, “The FinTech industry has done a great job of positioning Canada high up on the global scale.” Over 100 FinTech start-ups have emerged in the country since 2010, collectively raising over $1billion, and this has served to draw attention to what some have described as one of the world’s hottest FinTech hubs. With financial technology aiming to redefine the financial industry and vastly improve everything from lending to wealth management, those at the forefront look to prosper when the economic revolution gains momentum.
What is FinTech?
FinTech stands for financial technology, which describes how companies use technology to modernise and increase efficiency within their financial services. FinTech start-ups aim to offer alternatives to traditional banking or insurance schemes, and the global investment in these enterprises is a huge indicator as to how rapidly the industry is expanding. In 2014 there was $12 billion invested in FinTech worldwide, up from $930million in 2008.
Bitcoin is possibly the best known example of developments in the digital economic sector. It is a cryptocurrency that aims to become the sole form of payment for things online. World-renowned companies including PayPal and Dell have started accepting Bitcoin as a form of payment, and other businesses have decided to solely embrace the e-currency in an attempt to get ahead of the curve.
Rapidly swelling numbers of online casinos are already operating with Bitcoin as their standard currency in an attempt to offer an original approach to gaming. At Vegas casino, Bitcoin is bringing casino classics like roulette, blackjack, and slots to wider audiences from countries that may not have been able to previously gamble using their national currency.
How is the FinTech scene in Canada growing?
London and New York are already well established FinTech hubs, but greater amounts of wealth are now being funneled into Toronto which is ranked as the 9th largest FinTech market in the world. The reason why more funding is headed in the way of Canada’s largest city is because investors are constantly looking for more innovative, smaller markets which are punching above their weight. It is also due to the fact that Toronto has a vast amount of financial institutions with a market cap over $50 billion, meaning that the infrastructure is already there for FinTech innovators to exploit. Other cities such as Vancouver are following suit, and some are speculating that Ottawa could also become a thriving FinTech force in the near future.
Examples of massive innovations in Canada include the BC Technology Industry Association’s (BCTIA) partnership with PayPal Canada to create the first formalized FinTech cluster in Vancouver. The aim was to provide workshops that teach start-ups how to make money. The BCTIA were also the frontrunners in providing Bitcoin ATMs. Another Vancouver-based company, nTrust, created an app that allowed digital wallet users to load money onto a smartphone to buy products from certain retailers.
These really are exciting times for Canada’s FinTech scene, and not only do Canadian’s stand to benefit from a flourishing economy in years to come, they will also be able to make use of financial modernisms before they hit the mainstream.