Impressions of the Canadian fintech and emerging technology environment
KPMG Matchi CEO David Milligan has travelled to Canada twice towards the end of last year, and will be returning again in March, to meet with various financial institutions (banks, insurance companies, credit unions), to showcase KPMG’s global fintech capabilities and experience.
Visits to date were to Toronto and Vancouver, where in addition to various client meetings, he also presented KPMG Matchi’s approach at two separate financial accelerator showcase events. David had the opportunity to discuss trends in the financial and tech sector with various clients, as well as presenting Matchi’s latest value propositions in fintech, regtech, mobility, and other emerging technologies. We asked him about his experiences.
What struck you as most interesting about your Canadian travels?
The credit unions (essentially the North American term for building societies) tend to be smaller, regional banks. There are at least 20 in Canada and some of the larger ones we saw are looking to get national licences, allowing them to operate across Canada and thus to compete directly with the bigger financial institutions in Canada.
They are thinking hard about maximising the potential of digital platforms – both online and mobile – and how to use technology to enable their expansion. Interestingly, some of the industry associations are looking into the idea of sharing online banking platforms across different credit unions. They are really embracing the idea of Open Banking, which is a global trend, and are actively seeking technology that allows them to “plug in” various fintech solutions through open APIs.
What other trends did you notice in Canadian financial services?
In Canadian banking, payment modernisation is a key trend, with most of the big financial players working on enabling faster payments, similar to what was seen in the UK a few years ago, and in in Australia more recently.
Regtech is also a growing area of interest. Regulatory and compliance solutions are being developed by both fintechs and the Big Four. These are driven by increasing regulatory compliance burdens, and so we saw quite a lot of interest from financial services firms around our new Regtech Portal. We also heard from regulators that many are in the process of appointing people in positions to help them keep track of fintech and regtech developments, including understanding what solutions are available.
Are there any opportunities for fintech and other emerging tech firms in Canada?
The Canadian market has been growing quickly in terms of fintech firms, as well as for other emerging technologies, for example the mobility sector. Fintech has been growing beyond the original Toronto and Vancouver areas, and some estimates put the number of Canadian fintech firms at over 800. We have seen new opportunities beyond banking as well – for example, we dealt with a large health insurer that had repositioned the company and modernised it, and they are now looking at how they can buy in technologies to improve customer experience more quickly than in-house development. They specifically see the benefit of buying over building tech solutions. I think there are numerous other opportunities like this in Canada.
Canada has always enjoyed a mature financial services market, and a sophisticated consumer base. As these consumers use (and expect) digital and mobile processes in more and more aspects of their lives, demand for fintech solutions will continue to grow.
David will be travelling to Montreal and Toronto in March.