Jessica Vomiero | SmallCapPower | January 28, 2016: Four FinTech specialists sit at the front of a crowded room. Investors from across the country have gathered at the Metro Toronto Convention Centre for the same reason: the Canadian economy has some homework to do, and technology is first on the agenda.
“I think the future is tech in one way or another. I don’t think this is a fad,” said Dean Nicolocakis of PwC on a FinTech panel at the Cantech Investing Conference on Jan. 26th.
The Cantech Investing Conference is in its third year and comprised speakers and investors from across the country. Some of the biggest names in FinTech came out to share their insights on the place of technology in Canada’s financial sector.
Nicolocakis goes on to say that part of the reason FinTech startups are growing so quickly is that “you used to have to pay to play in this space. Those barriers are completely gone.”
He explains that resources like the Internet have made starting a business easier for everyone, meaning more competition for consumer dollars. More importantly, however, starting an Internet business requires close to no funds at all.
According to the panellists, Dean Nicolacakis of PwC, Andrew Graham of Borrowell, Randy Cass of Nest Wealth Asset Management Inc., and Jake Tyler of Payso, there are two kinds of FinTech companies.
These include technology companies who are employing a disruptive model and financial service companies that are modernizing their products. However, they also describe that it’s not just millennials looking to get involved in the building these digital services.
“We also need things like sophisticated risk management. In FinTech, bringing that kind of experience is crucial,” said Mr. Graham.
Jake Tyler agrees, saying that they’re looking for all levels of experience and skill sets. “We get the opportunity to work with bright, enthusiastic people who are focused on getting stuff done.”
The demographic being targeted by FinTech startups is also broadening as customers vary from Baby Boomers to millennials. According to a poll completed by CIBC, 85 per cent of millennials and 51 per cent of Baby Boomers are open to introducing new technology to their banking.
David Feller, the CEO of digital financial brand Mogo, says that overall, consumers are looking for change and are ready to embrace it.
“They’re looking for digitization and the banks are just not set up to do that. At Mogo, that’s exactly what we’re set up to do.”
Mogo’s capital market’s specialist Alex Langer argues that it’s the perception of the banks that keeps them behind.
“We’re engaging people, helping them take control of their banking.” At 350 employees and over 150,000 users, Mogo is going after a greater chunk of the market share. What’s more, they’re planning to do it all by the end of 2016.
Feller announced that Mogo will be releasing a mortgage product, credit cards, savings accounts and wealth management services in the near future. They currently offer consumer loans, credit score and a prepaid visa card.
Randy Cass stated that FinTech is poised to continue growing as more companies break into the space.
“There is a vast opportunity for companies like ours to find partnerships and strategic relationships not only with banks, but with companies that want to get into this space,” he said.
Andrew Graham explained that there’s no slowing the momentum. “There’s clearly strong growth behind FinTech. There’s great momentum that’s gonna carry us through 2016.”
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