September 28, 2017 by Paul
Toronto Emerges as Global FinTech Leader
As the former Head of North America’s largest innovations hub at MaRS Discovery District and currently as Senior Vice President at tech firm Zafin, Adam Nanjee has experience in the technology sector like few others. His areas of expertise include financial technology, cybersecurity, and artificial intelligence. He brings his considerable background and expertise to all his talks, speaking on the future of financial technology, innovation, and entrepreneurship, and infusing his presentations with the forward-looking approach he’s known for.
Below is a fresh post of his on how Toronto has gone from digital banking underdog to a global leader:
The goal of any innovative technology is to make our lives easier. But, truly disruptive technology evolves to meet the growing demand of users, becoming routine in our everyday lives. Financial technology is a prime example of such progression. It’s estimated that in 2017 alone, nearly $60 billion worth of payments will be made on mobile platforms. Comparing these figures to just two years ago, only $8.71 billion worth of transactions were made digitally in 2015. Despite this immense growth, there is still progress left to be made within the financial services industry.
In line with other frontrunners in the industry, such as London, Silicon Valley and New York City, Toronto, Canada, my hometown, stands apart as an emerging FinTech ecosystem, and it’s become a well-recognized leader amongst the largest and most stable financial centers in the world.
If you look at the number of financial institutions with a market cap over $50 billion, you might be surprised to find how Toronto stacks up, and in some cases, surpasses other global centers. This is largely due to the city’s strong and talented workforce and a legacy of success in the sector. Ontario – Toronto’s home province – has long been the hub for a variety of pension funds and other similar financial vehicles. Our emerging FinTech industry has a robust and thriving ecosystem with particular specialization in B2B, along with other associated sectors like cybersecurity to service the growing needs of these large financial institutions. Ontario entrepreneurs and businesses are also making advancements in other aspects of the financial services sector, such as developing the most sophisticated automated investing products for consumers.
Businesses are able to thrive in this environment, more so than cities like San Francisco and New York City, due to Toronto’s affordable cost of living and the caliber of the vast local talent pool. Our FinTech sector feeds off the talent of 360,000 financial services experts, as well as our top-rated university system that produces thousands of entrepreneurial and STEM graduates each year. Local banks and innovation hubs – including MaRS Discovery District, where I was a founding member for Canada’s first FinTech vertical – work together to connect top talent with financial institutions. Ontario also prides itself on its welcoming environment for a diversity of ideas and perspectives from around the world. More than half of Torontonians, for example, were born outside of Canada. The government is also committed to ensuring top talent is welcome; Work permits and temporary visas can be obtained in as little as two weeks.
Ontario has been a global leader in digital payments for more than a decade, with Toronto leading in a high concentration of cryptocurrencies, blockchain, alternative lending and e-commerce growth verticals. Our international perspective is due in large part to the fact that we think global first when it comes to FinTech, especially since the majority of the region’s clients are global banks. To scale, we must go above and beyond, which sets us apart from other major markets. This international outlook provides Ontario-based FinTech startups with a competitive advantage compared to others because the requirements to scale across borders can be hard, and many startups based in large consumer markets stumble when they seek to grow globally.
A key differentiator for Ontario – regulators are willing to engage and collaborate to ensure that regulations stay in step with innovation so that it happens here. For instance, the Ontario Securities Commission’s Launchpad program is a two-way communication between securities regulators and digital platforms.
In September 2017, Ontario was named Canada’s Most Competitive Location for business investment, and venture-capital (VC) funding for FinTech companies was up 74% from 2015 to 2016 – its highest level since 2000. Toronto’s growth in VC funding continues to attract global banks, investors and startups that are looking to set-up shop and expand their FinTech innovations.
I believe FinTech’s future lies in banks partnering with tech companies and entrepreneurs to establish themselves as digital hubs of innovation. These collaborative partnerships will be the key to developing digital banking platforms that rely on advanced artificial intelligence and cybersecurity technologies. I believe that Toronto will, no doubt, continue to take the lead in this sector as we create products and tools that have growing relevance, capability and usefulness throughout the course of people’s lives. The “stickiness” of what’s kept me in this sector for more than 15 years is its scalability. And scalability is the key to its success and continued evolution.