A high-level startup event in Canada wouldn’t be complete without a panel on FinTech, an industry that has been making waves both for the consumer industry and for the banks trying to keep up with innovation. Rohit Mahna, GM of financial services at Salesforce, sat down with three FinTech heavyweights — including Wealthsimple founder Mike Katchen; Lendified founder Troy Wright, and Financeit CEO Michael Garrity — to find out what it takes to survive as a FinTech in Canada.
Garrity said that Canada has done “exceptionally well” in FinTech, with many financial technology companies being active over the last 20-30 years. “One of the things that’s driving a lot more success and innovation is the advent of cloud, mobile computing, and the adoption curve of individuals associated with the types of services that they want to receive,” he said. “We talk about the Uberization of different industries, and what Uber has done in the transportation industry is that it’s said, ‘this industry is archaic and isn’t meeting the needs of its customers, and is only protected by regulation.'”
Katchen also said that, despite the fact that startups have a reputation for being the disruptors, startups would have to keep up with the growing trend of messaging apps. “For us, we have an app today, and a third of our clients check their performance and add funds through the app. It’s a great channel for us, but wouldn’t it be easier if they could text a number on their phone and not go through an entirely independent process?”
Wright said that the slower adoption rates for FinTech startups could be attributed to the fact the Canadian banking system stayed strong during the financial crisis of 2008 and 2009, a point Grow Financial founder Kevin Sandhu alluded to when the company announced its partnership with First West Credit Union.
“We have surveys that show the adoption index in Canada is definitely behind G7 countries for different reasons. Probably because Canadians haven’t had a real reason to go to FinTech companies because when the financial crisis occurred, the Canadian banking system was relatively unscathed,” Wright said. “In a lot of countries, people were pushed into it, because they needed to get an alternative because the incumbents shut down.”
Watch the whole panel below: