‘We’re seeing fintech innovation throughout most of the provinces’


Paytech, a subcategory of fintech, has grown significantly over the previous a number of years (Getty Pictures / Thomas Barwick)

For a number of years now, fintech has been driving appreciable progress each globally and right here in Canada. To realize an understanding of the place the trade at present stands, we spoke with Rajeev Shankar, accomplice, finance transformation & monetary companies, with KPMG Canada. Shankar has a wealth of expertise in implementing large-scale transformation initiatives and has consulted with shoppers throughout industries starting from retail and monetary companies to grease and fuel and telecommunications.

Right here, Shankar outlines a few of the main fintech developments in Canada and elsewhere, and the way they have an effect on CPAs.

CPA CANADA: Because the fintech trade grows, we’ve seen quite a few subsectors spring up—from wealthtech (digital options that facilitate the processes of wealth administration) to insurtech (insurance coverage know-how). Do you count on this to proceed?
RAJEEV SHANKAR (RS): Sure, positively. However should you return to the origins of the trade, it’s fascinating to see that monetary companies had been the primary to foster—and I’d even say incubate—the innovation that arose inside this house.

A variety of digitally savvy gamers began taking part in with know-how and taking a look at the way it might function an enabler within the monetary companies ecosystem. That was successfully how fintech was born. Then, through the years, completely different segments corresponding to insurance coverage and funds and even agriculture started to leverage the identical know-how. That’s after we started to see the emergence of classes corresponding to insurtech, paytech and even agritech.

I believe we are going to proceed to see new sorts of corporations develop as time goes on. That’s the great thing about the innovation that comes with the entire fintech house.

CPA CANADA: At one level, fee know-how (paytech) constituted 25 per cent of all fintech gamers in Canada. Is that this nonetheless true?
RS: Sure, paytech has grown significantly over the previous a number of years, and names corresponding to Klarna and Revolut have develop into fairly well-known. And once more, this has been pushed by market developments.

Once you have a look at monetary companies as an trade and what occurs proper from the time when clients select a monetary establishment to the sorts of services and products they select (accounts, loans, mortgages, and many others.), to the way in which they really transact, you see that many elements of the method are cumbersome and outdated. There’s usually a lag time with conventional monetary companies establishments in contrast with the quicker and extra seamless choices out there with fintechs. For instance, it’s cheaper and simpler to open an account with Revolut than it’s to copy the identical expertise with a standard monetary establishment.

CPA CANADA: The Toronto-Waterloo area is named a fintech hub. Is the world persevering with to develop?
RS: Sure, completely. On the identical time, we have seen fintech innovation throughout most of the provinces. For instance, quite a few profitable fintechs have grown up in Calgary, Edmonton, Atlantic Canada, Vancouver, Montreal and Quebec Metropolis – these are all fintech ecosystems in Canada.

And that’s thrilling as a result of anytime you’re speaking about fostering innovation, it is an thrilling proposition.

CPA CANADA: Are you seeing many CPAs transferring into fintech?
RS: Sure. Many individuals I’ve labored with—particularly Gen Z—are drawn to organizations corresponding to fintechs, as a result of they really feel this can give them the chance to use their information in a direct and sensible method. They like the concept of being nimble and artistic and progressive in serving to drive the expansion of those organizations. And I believe that pattern is barely going to extend.

Fintech can also be for these which are captivated with know-how and CPAs have gotten increasingly more engaged in new applied sciences. Fintech simplifies monetary transactions for shoppers and enterprise. CPAs with their skillset are in a position to simply adapt.

CPA CANADA: What are a few of the areas the place CPAs can greatest apply their expertise?
RS: Right now, CPAs have a wealth of choices. With the excessive degree of adoption of digital companies in lots of organizations, they can use these applied sciences to assist drive greater value-added work than might need been related to conventional controller positions, which had been usually sure by the confines of handbook processing.

In different phrases, CPAs can use their skillsets to essentially assist drive operational effectiveness and progress throughout a company. I believe it’s an enchanting time.

CPA CANADA: Some say that although Canada has amply demonstrated its functionality in fintech, many gamers are purchased out or transfer to the U.S. as soon as they attain a sure measurement. What’s your take?
RS: It relies on what issues these gamers try to unravel. I’ve seen Canadian fintechs which have reached a sure measurement and determined to broaden into bigger markets such because the U.S. and even Europe or Asia.

On the identical time, I’ve additionally seen fintechs which have grown fairly efficiently in Canada and have determined to stay inside the nation.

CPA CANADA: With sustainability on everybody’s thoughts today, Canada has develop into a frontrunner in cleantech. How do you see that space evolving?
RS: Canada has an amazing alternative to take the lead and drive adoption of cleantech. And given the emphasis we’re putting on ESG, a particular want for this type of know-how is being established. And that drives a wholesome degree of innovation and competitors.

Equally, relating to fintech basically, Canada has given beginning to numerous nice innovation and exhibits nice potential. However I believe we’re usually underplayed by way of the worldwide fintech ecosystem—and that has to do with our conservative nature as a nation. Nonetheless, I’d prefer to see Canada being positioned amongst a few of the world gamers. It definitely deserves to be there.

FOCUS ON FINTECH

Learn the way finance leaders throughout the nation are viewing digital transformation. Learn the way open banking might have an effect on the accounting trade, and why it’s time to get forward of the curve. Plus, find out how Competency Map 2.0 is getting ready CPAs for a digital-first world.



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