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Toronto is a Fintech Testing Ground, says MaRS Innovation Lead

Toronto is a Fintech Testing Ground, says MaRS Innovation Lead

Posted by PanamericanWorld on April 19, 2016

The way we borrow, save and invest money will never be the same thanks to a surge in financial technology (fintech) companies driving a digital revolution in the financial services sector.

It’s not just startups like Canada’s Wealthsimple and Borrowell changing the way consumers interact with their money. Established banks are also seeking ways to stay on top of the shift in consumer behaviour, investing in fintech startups and launching their own digital products. Fintech has also become a profitable place to be for angel and venture capital investors.

Global investment in financial technology (fintech) ventures tripled to about $12.2 billion in 2014, compared to $4.1 billion in 2013, according to a report from management consultancy firm Accenture. This surge in activity prompted the creation of a fintech division at the Toronto-based MaRS Discovery District, an innovation hub that connects startups with investors and corporations. It was created in February 2015 as a place where startups, investors and corporations could come together.

We recently spoke with Adam Nanjee, head of financial technology and innovation at MaRS, about Canada’s fintech industry and its position on the global stage.

What does MaRS look for in a fintech startup?

We focus on later-stage companies: They’re already in market, are commercially ready, have customers and revenue. That’s because we have a lot of partners, large-scale financial institutions that are looking for companies already in market and venture capital firms looking to invest in companies in the later-stage of development. To get there, your business has to solve a problem, and the legs and wherewithal to potentially really build a sustainable business.

What are some of the main challenges in the fintech industry today?

Companies have built some great technology, but they have to confirm and abide by regulatory frameworks [which are constantly changing]. You have to be in compliance.

How does Toronto rank against other fintech centres worldwide?

Canada has a very strong technology community — people who are building great fintech companies with strong intellectual property. Canada also has an advanced market for fintech:  We are almost 90 per cent contactless. Mobile payments have been around in Canada for a long time. We also have a robust financial ecosystem that survived well during the meltdown a few years ago. Toronto is looked at as a global financial hub. Our proximity to London and New York is also an advantage. A lot of companies will test their products here first, prior to going to New York or maybe California.

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