Fintech companies utilize mobile technologies, specialized software, and cryptocurrencies to enhance the delivery and access to financial services. They consist of both established and growing companies engaged across a variety of sectors and verticals, including investment management, non-for-profit/fundraising, retail banking, and even education. In Canada, there are about 700 fintech companies, some of which have been recently included in the CB Insights’ global 2020 Fintech 250 list.
Fintech Companies by Area
Calgary is known as being a fintech hub and an attractive market for businesses that specialize in software and tech, personal finance, investments, capital markets, insurtech, cryptocurrency, and blockchain. Some of the home-grown businesses that are worth mentioning include Benevity, Flahmingo, Chroma Property Technologies, and OneVest. Established in 2008, Benevity offers grant and donation management software for corporate giving. Among their customers are giants such as Apple, Google, Coca-Cola, and Nike, among others. Chroma Property Technologies offers property solutions and financial tools to help improve the rental experience. Their proprietary app allows tenants to personalize their rent payments while building credit. OneVest specializes in investment and wealth management, connecting investors and startups via their Wealth-as-a-Service platform. A growing Calgary-based fintech, Flahmingo offers retail investors a proprietary app for commission-free fractional investing.
Calgary has also been a pioneer in deploying robotics in customer service, using blockchain to make international real-time payments, and making gas and oil royalty transactions using blockchain. It is also the first Canadian city to engineer a digital currency.
Vancouver, British Columbia
With British Columbia being the home to more than 120 fintech companies, Vancouver has grown fast to become a finance and technology hub for fintechs like Mogo, FISPAN, Koho, Trulioo, and Hyperwallet. Two companies, in particular, Instant Financial and Trulioo appeared on CB Insights’ Fintech 250, along with Ontario-based firms such as Q4, NorthOne, League, TouchBistro, and Clearbanc. Instant Financial offers employees access to their earned pay commission-free after each shift. Employees can use their card to make fund transfers, get cash, or make purchases. Founded in 2011, Trulioo is a fintech firm providing address and identity verification to businesses and individuals. The company offers access to 400 data sources globally to prevent fraud and ensure that customers and businesses transact safely.
Quebec is the home to about 15 percent of Canada’s fintech firms, with Montreal fast becoming a major technology hub. The Holt Accelerator, Ferst Capital Partners, Real Ventures, and Diagram Ventures are among the most active players here. A private investment firm founded in 2012, Ferst Capital Partners offers support and capital to startup businesses. FCP invests in a portfolio of crypto assets, sector-focused funds, private equity, venture capital, and public markets. The Holt Accelerator connects startups with corporate partners, investors, and advisors, assisting companies with product enhancement, market expansion, building teams, and funding. The Holt Accelerator is targeting companies across industries, including digital lending and insurance, banking and accounting, wealth management, computer security, and alternative investments. Headquartered in Montreal, Real Ventures helps entrepreneurs build successful businesses by offering access to resources, mentorship, and guidance. Diagram Ventures is engaged in launching and funding companies in the health, insurance, and financial services sectors. Diagram offers incubator-style guidance, capital investment, and access to an ecosystem of investors to build game-changing businesses.
While the Atlantic Provinces collectively make up a small fintech hub, they are the home to a bilingual, highly trained workforce. Some of the leading fintech companies here include CasheFlo, Pocket Finance, and ClearRisk. Headquartered in Halifax, Nova Scotia, CasheFlo provides cash flow planning training and behavior-based education for advisors, non-profits, and credit unions. The company seeks to empower financial institutions to improve their lending practices, build financial capacity, and attract competing banks’ customers. Also based in Halifax, Pocket Finance features a digital fintech platform for individual consumers and finance professionals, helping consumers to access advice and finance professionals to improve engagement. Lastly, ClearRisk, which is based in St. John’s, Newfoundland and Labrador, offers risk, incident, and claims management software to help businesses minimize insurance claims costs and enhance their risk management processes.
New developments that are positioned for growth in the next couple of years include personal financial management, WealthTech, and RegTech. The main factors behind growing RegTech adoption are ever evolving regulations, high practitioner workloads, and growing technical debt loads and compliance costs. Offering reporting, regulatory monitoring, and compliance services, RegTech is a community of technology firms that address the challenges associated with the growth of digital products. Such challenges include money laundering, cyber hacks, data breaches, and other fraudulent practices. RegTech companies operate across an array of sectors such as adult trail, fraud prevention, compliance data management, and employee surveillance, among others.
WealthTech comprises tools and capabilities that enable financial advisors and investors to set goals, manage their portfolios, and plan investments. WealthTech companies also offer social trading platforms that allow users to share opinions and cases as well as trading platforms for real-time trading, regardless of qualification, background, and skill level. Customers are also offered a wealth of advanced financial capabilities such as compliance tools, digital wallets, roboadvisors, and algorithmic trading. A digital wallet, for example, is a type of software that helps users manage and analyze their spending and sources of income. Roboadvisors gather client information and make trades on behalf of users based on algorithms and survey responses. There are also robo-retirement solutions that are designed to manage retirement savings and investments with lower fees.
The third vertical, personal financial management has also seen a significant growth recently, especially in response to the Covid-19 pandemic. Examples of fintech firms that specialize in PFM are saving and investing app Moka and financial app KOHO, offering users the chance to simplify their finances while earning cash back.
Fintechs by Service Area
By operation, most Canadian fintechs specialize in payments (21 percent), followed by lending (14 percent), digital currencies (12 percent), back office (12 percent), personal financial management (9 percent), and wealth management (9 percent). There are also fintech companies in the fields of insurance (9 percent), capital markets (7 percent), and risk (4 percent). At the same time, firms specializing in personal finance management, WealthTech, and RegTech may be among the best positioned for growth if recent developments continue to accelerate.