in Big Ideas

Bay Street & Natural Resources – FinTech in Toronto

TL;DR

Toronto is a center of gravity for financial services. There aren’t a lot of financial technology startups in Toronto. There is a new Toronto FinTech Meetup. FIrst meeting is Wednesday, April 10, 2013 at the MaRS Commons (Suite 230, 101 College St.) hosted by Blair Livingston of Quantify Labs.

Bay Street and Natural Resources

[Editor's Note: This is a guest post by Blair Livingston LinkedIn , founder of Quantify Labs. Full disclosure: I'm an investor in Quantify Labs. Blair and I share a view that given the technology and talent available on Bay Street there should be a strong financial tech and startup community in Toronto. It is sad that my typing "toronto fintech" into Google results in a Montreal conference as the first result. ]

Google Search for Toronto FinTech

Great cities prosper and thrive, in part, because of their proximity to valuable resources. Arguably, the nearby resources were likely the main reason the city or village was situated in that location to begin with. However, it’s not enough to simply be near resources – gold still has to be mined – and we need to put those resources to work. Indeed, Canada is a country rich in resources; we have diamonds, gold, lumber, oil, gas and everything in-between. Canada’s strong economy is fuelled in part by this abundance of resources.

However, over the last hundred years (or so) new types of resources have emerged – communities, technologies, groups, industries and people. Many of these resources don’t take the familiar form of something tangible and malleable, and for that reason can go unnoticed for a long time.

One Hub to Rule Them All

When we talk about finance, we invariably talk about New York City. We talk about Wall Street, the 1%, and a concentration of capital, services, people and technology that makes NYC one of the financial industry capitals (if not THE capital). It is the density of entrepreneurs, emerging companies and people that are one of NYC’s greatest resources. Consider the effects on start-ups built to service financial companies – this industry has supported, nurtured and allowed some of the biggest financial technology companies in the world to grow and flourish in its ecosystem.

Bloomberg LP, with estimated yearly top line revenues of $10 billion, was started in New York. The city is host to a number of trading venues, back office technology providers, data aggregators and other interesting and innovative companies built on the resource of this community concentration. They even have an accelerator dedicated solely to financial services technology (appropriately named the FinTech Innovation Lab).

In New York, FinTech flourishes by connecting the community and building an ecosystem that leverage existing resources. Financial institutions play a role in supporting the new ecosystem by acting as customers, acquirers of startups and hiring talent that develops in each of the early stage companies. Demonstrated by the support, both financial and at very high management levels, that FinTech Innovation Lab receives. It’s no wonder a large portion of all leading financial technology, especially institutional tech, is coming out of New York.

Where is FinTech in Toronto?

Toronto has a booming financial industry. Our banks are in excellent shape. The combined market capitalization of Canada’s six leading banks is more than $323 billion. And with that kind of market capitalization comes new problems, new opportunities and potentially new tech. The difficulty lies in the regulation, legislation, risk standards and software/hardware requirements. This poses challenges for developers and entrepreneurs in selling to financial services firms. It doesn’t matter if the solution is aimed at the retail (bank branches or individuals), corporate (the mother ship) or institutional (sales & trading, investment banking). Selling to financial institutions is not an easy process. It requires assistance in process, guidance (legal, technical, financial), support, experience and a depth of knowledge that is greater than just hustling.

It is because of the complexity in the go-to-market and technical requirements, why very little innovation happens in financial services technology (aka fintech). It’s like the shadow cast on a wall – it looks menacing, like a panther or some dangerous beast – but in reality it’s only a little kitten. If you understand how to deal with the issues, and properly approach them, they aren’t all that scary (and a little help never hurts).

But, with little innovation comes massive opportunity – there is so much opportunity in financial technology that it’s hard to decide where to begin.
What Toronto needs is to start taking advantage of these resources – a thriving financial services industry. It’s already happening in pockets around the city, but it’s about time we started getting aligned to make a consolidated push together. I have had the opportunity of meeting with/hearing about/noticing some interesting financial tech companies in the city, who include:

  • D+H (payment/lending solutions)
  • Market IQ (data/social sentiment analysis)
  • FINMAVEN (data/social sentiment analysis)
  • eDYNAMICS (salesforce integration and consulting/cloud computing)
  • OANDA (FX trading platform)
  • Quantify Labs (institutional content/CRM platform)

Who else should be on this list? Who are the startups, developers, investors and entrepreneurs that are interested in FinTech in Toronto? If the community is the framework, let’s get the community going. Let’s share stories and guidance on selling, building and launching financial technology. Let’s offer insight and experience into usage and problems. Let’s discuss. Let’s take advantage of one of this city’s most abundant resources. That’s what we want to do, and if you have any interest in financial technology, I would encourage you to sign up for the Toronto Fintech Meetup. We’re having our first ever meeting next Wednesday, April 10th, at the MaRS Commons, just a ‘get to know you’ – no speakers, no schedule, just an introduction to the financial tech community in Toronto.

When I started in finance ask a desk analyst, I was repeatedly told – “it’s too bad, the low hanging fruit is gone” – well I took a walk out of that orchard, down the lane, and stumbled into another called Financial Technology. The fruit just isn’t low hanging, it’s on the ground – we just need a few more people to come help us pick it up.

 

  • Guest

    I’ve always wondered why there weren’t more Fiserve startups in Toronto. I always assumed it was because people were just pretty happy at the banks.

    It wasn’t that long ago that most comp. sci grads from UofT just wanted to go work at a bank., that seems to be changing.

  • http://twitter.com/JohnPhilipGreen John Philip Green

    Should add CommunityLend to your list of Toronto FinTech companies… they do purchase financing at point of sale with their FinanceIt product: https://www.financeit.ca

  • http://www.facebook.com/michael.garrity.9066 Michael Garrity

    Hey Blair – welcome to the world of FinTech in Canada. You’ll likely find it is one of the most active areas of innovation in this country with the most cumulative investment activity. Likely the reason you hadn’t seen that with your Google search was that FinTech isn’t really a search term any of us in the business care all that much about. Here is a shortlist of better search words for you and some great Cnd companies off the top of my head I can think of to help you refine your article.

    Payment Tech
    - Paymentus
    - Payfirma
    - Pivotal Payments
    - CUETS
    Lending Tech
    - Financeit
    - Crelogix
    - Snap Financial
    - D+H
    - Dealer Access (now DealerTrack)
    - Curomax (now DealerTrack)
    - FiLogix (now D+H)
    - Kanetix
    PFM Tech
    - Carta
    Banking tech
    - SIT (Portfolio Plus)
    - CUETS
    Processing tech
    - Symcor
    - Intria Items
    - CGI
    Encryption/Security tech
    - SecureKeY
    Brokerage tech
    - Markit
    LeadGen tech
    - BankRate.ca

    This is just a starter list between meetings. You might also want to connect with Alex Baker or Rob Antonaides who spent most of the last 10 years watching and investing in this space.

    Good luck.

    - Michael

  • http://www.facebook.com/michael.garrity.9066 Michael Garrity

    Thanks JPG.

  • http://twitter.com/blairlivingston Blair Livingston

    Thanks for the list Michael, this is a great addition! I didn’t even realize some of these companies were Canadian – really appreciate the feedback, and will definitely reach out to the individuals you mentioned

  • AGORACOM – George

    Hey, guys. Let me know if AGORACOM can be a fit.