TORONTO, March 31, 2021 /CNW/ - As the Canadian fintech sector looks to rebound from challenges brought on by the pandemic, its future global strength will depend, in part, on the willingness and ability of all ecosystem players to foster innovation, collaborate and expand internationally, finds a new report from Accenture (NYSE: ACN).
The global report, Collaborating to Win in Canada's Fintech Ecosystem, benchmarks four Canadian technology hubs against 16 other leading and emerging fintech hubs around the world. Overall, Toronto ranked 8th, Vancouver 12th, Montreal 14th and Calgary 16th out of 20. The report also examines global investment growth trends across all hubs, noting that that Canada punches above its weight in terms of number of deals closed while total deal value is more subdued compared to leading global hubs.
The analysis found that Canadian cities are already benefitting from strong foundations provided by government support and high-quality talent, but they are behind tech hubs such as Hong Kong, London and Singapore when it comes to overall fintech adoption.
"We are optimistic about the future potential of the Canadian fintech ecosystem and the role of startups and other institutions in how they embrace change that will benefit the overall financial services industry in Canada," said Robert Vokes, senior managing director and financial services lead at Accenture in Canada. "Canada has much to learn and much to contribute to our global peers, including those who are developing open banking, digital identity and data portability solutions. Our ecosystem of Canadian fintechs, major financial institutions and policymakers are coming together to transform and reinvent business models that address the changing digital habits of Canadians – they are shaping and developing future standards that will support the industry while preserving the strength of our financial system."
The report used a proprietary benchmarking model to identify how Calgary, Montreal, Toronto and Vancouver performed in comparison to global peers, distilled into five key metrics:
- Government Support: All four Canadian hubs performed relatively well due to high-quality national regulation and the ease of starting a business in Canada.
- Business Ecosystem Maturity: Canadian hubs trail others in attracting a greater degree of foreign direct investment. A renewed focus on encouraging and retaining cross-border investment may also benefit Canadian hubs given the negative impact of COVID-19 on 2020 fintech deals.
- Fintech Activity and Financing: Canadian hubs scored lowest in this area while Silicon Valley took the top spot. Canadian cities and governments should consider continued promotion of regional fintech investment and the attraction of VCs to increase competitiveness in this area.
- Talent Pool and Innovation: Toronto is a close second after Berlin. Canadian hubs could improve their overall score in talent pool and innovation with more focus on the commercialization of homegrown technology through greater collaboration between academia and industry.
- Technology Availability and Adoption: Canada lags many of its U.S. and Asian peers due to high speed internet connectivity challenges for remote populations. Canadian hubs could improve by looking at how leaders such as Hong Kong, Silicon Valley and Tel Aviv encourage businesses to embrace disruption and develop products and services based on the latest technologies, e.g., fintech-friendly policies and incentives.
"As we look beyond the pandemic, the Canadian financial services ecosystem remains poised to grow. Canadian fintechs are adopting a borderless mentality, raising international investor interest, while financial institutions are taking on the mindset of technology companies now more than ever," said Vikas Shreedhar, managing director and cloud leader at Accenture in Canada. "With both market and regulatory forces pushing Canadian fintechs into the spotlight, the financial services ecosystem will have the potential to deliver the most personalized and seamless digital experiences Canadians have ever seen thanks to advances in cloud, artificial intelligence and application programming interface capabilities."
Closing the gap between Canada and leading global fintech hubs will take a patient, coordinated effort across the ecosystem. To ensure Canadian fintechs and financial institutions learn from 2020 and use their momentum to emerge from the downturn even stronger than before, the report identified three thematic areas that will be key:
- Advance the Innovation Agenda: Despite world-class institutions and substantial public investments in research and training, Canada continues to struggle with scaling these startups into high-tech, homegrown multinationals. Further development of regulatory sandboxes could be one approach that benefits innovative companies while balancing the public interests of financial stability and security.
- Strive for Global Ambitions: Further accelerating the growth of Canada's financial services ecosystem will require not only cross-border talent but doubling down on international expertise and capital as well. Canadian fintechs are increasingly looking to grow beyond Canada with a "borderless" mentality, raising international investor interest in the Canadian ecosystem. Foreign participation in Canadian fintech deals has also been a significant contributing factor to maintaining Canadian hubs' position among the fastest growing in the world.
- Come Together to Win: Canadians' digital behaviour and fintech adoption accelerated significantly during the pandemic, raising concerns about digital privacy and security. To address changing consumer habits, fintechs and financial institutions are increasingly identifying novel opportunities to work together. Leveraging banking-as-a-service platforms means that non-bank brands may also find themselves reaching into the industry using new models in collaboration with banks. As industry boundaries blur, leaders will offer more products and experiences by working together at the intersection of their respective strengths.
About Accenture
Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services — all powered by the world's largest network of Advanced Technology and Intelligent Operations centers. Our 537,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at www.accenture.com.
Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.
SOURCE Accenture
Susan Kirwin, Accenture, +1 416-641-5148, [email protected]
Share this article