Financial Services / en How Toronto is falling behind in the financial services technology sector /news/how-toronto-falling-behind-financial-services-technology-sector <span class="field field--name-title field--type-string field--label-hidden">How Toronto is falling behind in the financial services technology sector </span> <span class="field field--name-uid field--type-entity-reference field--label-hidden"><span>sgupta</span></span> <span class="field field--name-created field--type-created field--label-hidden"><time datetime="2015-11-05T10:02:15-05:00" title="Thursday, November 5, 2015 - 10:02" class="datetime">Thu, 11/05/2015 - 10:02</time> </span> <div class="clearfix text-formatted field field--name-field-cutline-long field--type-text-long field--label-above"> <div class="field__label">Cutline</div> <div class="field__item">(photo of Bay Street towers by Adrian Berg via flickr)</div> </div> <div class="field field--name-field-author-reporters field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/news/authors-reporters/adrienne-harry" hreflang="en">Adrienne Harry</a></div> </div> <div class="field field--name-field-author-legacy field--type-string field--label-above"> <div class="field__label">Author legacy</div> <div class="field__item">Adrienne Harry</div> </div> <div class="field field--name-field-topic field--type-entity-reference field--label-above"> <div class="field__label">Topic</div> <div class="field__item"><a href="/news/topics/breaking-research" hreflang="en">Breaking Research</a></div> </div> <div class="field field--name-field-story-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/news/tags/more-news" hreflang="en">More News</a></div> <div class="field__item"><a href="/news/tags/munk-school-global-affairs-public-policy" hreflang="en">Munk School of Global Affairs &amp; Public Policy</a></div> <div class="field__item"><a href="/news/tags/financial-services" hreflang="en">Financial Services</a></div> <div class="field__item"><a href="/news/tags/business" hreflang="en">Business</a></div> <div class="field__item"><a href="/news/tags/research" hreflang="en">Research</a></div> </div> <div class="field field--name-field-subheadline field--type-string-long field--label-above"> <div class="field__label">Subheadline</div> <div class="field__item">New report from ֱ's Munk School of Global Affairs</div> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>The Toronto region’s financial services technology&nbsp;sector is operating “far below” its potential, says a&nbsp;new report from The Innovation Policy Lab at the University of Toronto’s Munk School of Global Affairs.</p> <p>And researchers say that will have an impact on the region’s future economic success.</p> <p>Commissioned by the Toronto Financial Services Alliance (TFSA), the report found great potential in the region but&nbsp;no true ecosystem of financial services technology – or fintech. Although Toronto is poised for growth, “siloed” resources and players are hampering development.&nbsp;</p> <p>Professors <strong>Dan Breznitz</strong> and <strong>David Wolfe</strong>, co-directors of the Innovation Policy Lab at the Munk School of Global Affairs, and Assistant Professor <strong>Shiri Breznitz</strong>, undertook a strategic mapping study of the key players, resources and innovation assets in the Toronto region. Their report includes recommendations on how to support Toronto’s financial services industry and establish the region as a global fintech hub.</p> <p>“We have most of the right ingredients, but we are operating far below our real potential,” said Breznitz. “Our study revealed that on a global basis, Toronto’s fintech growth is falling behind in comparison to other cities that have established hubs, such as New York and London.”</p> <p>Between June and August of this year, researchers interviewed a number of key decision makers from banks, insurance companies, professional services firms, industry associations, fintech firms, government incubators and venture capital firms in preparation of the report. Among&nbsp;the report's findings:<br> &nbsp;</p> <ul> <li>Despite having the necessary components, the lack of strong connections between fintech firms and financial institutions is undermining our ability to create an effective ecosystem to drive economic growth.</li> <li>While progress is being made, Canadian financial institutions do not act as true partners to fintech startups to the same extent that other leading global centres do – where relationships do exist they tend to be located at the margins of the financial institutions’ main operations, in incubators or accelerators.</li> <li>The consequence of this disconnect is that the successful fintech firms in the region become disruptors: they create products and strategies that do not require the banks as partners and customers, and instead become competitors of the banks.</li> <li>Canadian banks may be more vulnerable to unbundling and disintermediation than has been assumed; Canada’s regulatory environment provided an effective ‘moat’ around the banks to weather the financial storm in 2007-08, but this protection has made the banks slower to react to the emerging challenges posed by fintech startups than in other global centres.</li> <li>Regulations make it difficult to undertake the low-level-rapid-experimentation necessary to develop safe, useful fintech products – even what are considered the most basic fintech offerings such as crowd-sourcing and loans cannot be developed and offered in Canada without the participation of a licensed bank.</li> </ul> <p>“We're 11 years late to the party,” Breznitz told <em>The Globe and Mail</em>.</p> <h2><a href="http://www.theglobeandmail.com/report-on-business/toronto-falling-behind-in-fintech-industry-report-argues/article27108871/">Read the Globe coverage of the report</a></h2> <p>Janet Ecker, president and CEO of the Toronto Financial Services Alliance said collaboration is key. “Fintech innovators and what we have defined as the ‘traditional’ financial companies are both essential to our growth and prosperity.”</p> <p>This approach is supported by the report’s authors who also argue that a vision is critical – one that determines what the best policy interventions are to increase connections and opportunities that will lead to the development of a successful Fintech sector as a regional and global advantage.</p> <p>“The findings of this report are an important call&nbsp;to&nbsp;action for the TFSA and its partners, like the Ontario Centres of Excellence,” Wolfe said,&nbsp;“to address the current silos between Fintech firms and the large financial institutions, if we’re going to drive future growth.</p> <p>“The impact of not seeing and grasping the opportunity could result in a slow decline in relevance and importance of both the financial services and the Fintech sector in the Toronto region.”</p> <h2><strong>Watch the CBC coverage of the report below:</strong></h2> <p>&nbsp;</p> <p><iframe allowfullscreen frameborder="0" height="315" src="https://www.youtube.com/embed/rzYd1bSb8Hw?rel=0" width="560"></iframe></p> </div> <div class="field field--name-field-news-home-page-banner field--type-boolean field--label-above"> <div class="field__label">News home page banner</div> <div class="field__item">Off</div> </div> <div class="field field--name-field-picpath field--type-string field--label-above"> <div class="field__label">picpath</div> <div class="field__item">sites/default/files/2015-11-05-bay-street-towers.jpg</div> </div> Thu, 05 Nov 2015 15:02:15 +0000 sgupta 7416 at