Do you know that the Canadian fintech industry is the second largest in the world? Doubt this? Here’s how. Canadians were early adopters of financial technologies, and this adoption rate is expected to grow exponentially. The North American country is also a fertile ground for private fintech companies. As such, Canada has a robust fintech ecosystem which has fostered innovation in the country.
Overview of the Fintech Industry
Fintech refers to financial technology. For this reason, any company that uses technology to offer innovative solutions to businesses or consumers across the financial industry is a Fintech company. What’s more, the Fintech industry cuts across the following subsectors:
- Insurance Tech
- Capital markets
- Mobile payments
- Trading analytics
- Property Technology
- Enterprise Collaboration
The Canadian Fintech Industry
Interestingly, Canadian financial services companies invest more in the IT sector. The latter is evident in the development of risk management and financial IT systems. Also, if you’re looking into the fintech sector, you’ll find several market opportunities and a luxurious pool of young talents. Now, here’s the fintech industry overview in Canada:
1. Adoption of FinTech in Canada:
Payments made without physical cash now account for 90% of the total consumer payments in Canada, which is quite remarkable. Similarly, a significant percentage of consumers are making these payments from their smartphones.
Here’s what it looks like:
- 28% and 18% of Canadians use a smartphone for banking activities and also pay for goods & services.
- About 17 million out of over 22 million mobile subscribers in Canada own a smartphone. Out of these 17 million smartphone users, approximately 8 million use NFC enabled mobile devices that facilitate contactless payments.
2. Percentage of the Canadian Fintech Industry vs the US:
There are about 6,000 FinTechs in the US. However, almost 850 Fintech companies are based in Canada. This value is remarkable, given that the North American country’s GDP is 1/10th of the US. A closer look at fintech companies by provinces show that Ontario (47%), Quebec (24%), British Columbia (18%), and Alberta (7%) are ranked in the top spots.
Toronto, a Financial Hub for Fintech in Canada
Toronto, the capital of Ontario, is the largest city in Canada, and it has the highest number of Fintech companies in the country. It is estimated that over 600 fintechs are headquartered in Toronto. Also, 281,700 people work in 20,000 IT firms in Ontario, and this number accounts for almost half the amount of IT workers in Canada.
Toronto is also reputable for having the following:
- The four largest banks in Canada
- Over 80% of international banks in Canada
- Some of the top 10 banks in the world by market capitalization
- World’s ninth-largest equity exchange, the Toronto Stock Exchange (TSX)
Top Fintech Companies in Canada
The top Canadian fintech companies are also based in Ontario. Some of these companies include:
- Giesecke & Devrient
Other top companies are:
- Lending Loop
- Snap Financial
- Carta Worldwide
- Charitable Impact
Payments-based Firms are Gaining Momentum in Canada
59% of fintechs in Canada fall under these five sectors:
- Blockchain & Crypto
- Lending & Mortgage
That being the case, the payments sub-category accounts for 30% of Fintech companies in these three provinces: Ontario, Quebec, and British Columbia. Also, the highest number (16.5%) of Fintechs in Canada are payments-based firms.
The Canadian fintech industry has recorded a high adoption rate over the years, and it is expected to expand exponentially. This growth will likely be triggered by more collaboration between fintechs and traditional financial institutions.