Technology is driving profound change in every area of society and business, and the financial sector is experiencing a seismic shift.
Innovative financial technology startups (fintechs) are emerging in Toronto, striving to establish themselves in an industry traditionally characterized by large institutions.
Meanwhile, established financial companies are using new technologies to find more effective ways of doing business, and more efficient ways of delivering service.
Both large and small players are focused on meeting consumer demands for more convenient access to a wider range of financial services—without sacrificing security or privacy.
Amidst the disruption, Toronto is poised to become a global fintech leader, thanks to excellence in five key areas:
Today, approximately 140 fintech companies are located in the Toronto Region, and many success stories have helped the region thrive.
But to compete in a shifting global economy, stakeholders must work collectively. Other major cities around the world are building fintech sectors. They’re developing public-private strategies, attracting foreign investment, adopting regulations that enable innovation, and growing their talent pools. Toronto must do the same.
That’s where Toronto Finance International comes in. A public-private partnership between government, the financial services sector and academia, TFI’s mission is to enhance the region’s competitiveness as an international financial centre. It provides thought leadership and promotes Toronto on a global stage.
Helping develop the fintech ecosystem is a key part of TFI’s action plan.
“Toronto is perceived internationally as a stable financial centre,” says Jennifer Reynolds, president and CEO of TFI. To bolster its position in the global marketplace, Toronto must also become known as a leader in fintech innovation.
“The financial industry is changing at a faster pace than many other industries,” says Reynolds. “The strength of the sector is a key driver of the Canadian economy. To remain competitive and drive growth, we need an environment that fosters innovation.”
In their current state, finance regulations can be confusing, onerous, and expensive for fintech employees to comply with. They may even discourage innovation in the financial sector and foreign investment in fintech.
TFI is working on several initiatives to encourage evolution in the regulatory environment and to help fintechs navigate the existing regime. “Other countries are moving ahead with national strategies to drive innovation in the financial sector, and Canada needs to do the same,” says Reynolds.
Toronto boasts strong tech talent, but more is needed to fill the demand from the financial sector. To ensure students have the right skills and experience, TFI works with universities, colleges and financial institutions, helping to expand the pool of “work-ready” university graduates.
For example, in a report earlier this year, TFI identified a gap in the talent pool for people with cybersecurity skills, which are integral to the sector’s success. TFI brought financial industry and academic leaders together to make a plan to develop a talent pool with the skills needed now.
“Schools are already moving quickly to design programs and certificates around the evolving needs of cybersecurity,” says Reynolds. “Some are looking to introduce them within the next 12 months.”
TFI has plans to reach out to high school students in Toronto later this year with a program called Uncovering Opportunities: High School Edition. High school students will attend day-long interactive sessions at several Bay Street financial institutions, hosted by TFI.
Students will learn about innovation in the sector and get a glimpse of how they can play a role in an industry that touches people’s everyday lives, says Reynolds.
“Jobs in the financial sector have changed,” explains Reynolds. “Every part of a financial institution is impacted by technology. As a result, recruiting needs are much more diverse than they were in the past.”
“Innovation in the fintech sector is good for everyone,” says Reynolds. “Canadians will have access to the best financial services out there. That impacts their lives. It impacts how they finance their personal activities and their businesses. And it’s critical to the functioning of all other parts of the economy.”