Media Releases

Toronto region’s Fintech sector poised for growth but “siloed” resources and players preventing formation of a true ecosystem

November 5, 2015

TORONTO, ON – Today The Inno­va­tion Pol­i­cy Lab at the Uni­ver­si­ty of Toronto’s Munk School of Glob­al Affairs, released a report on the region’s finan­cial ser­vices tech­nol­o­gy (“Fin­tech”) sec­tor and its impact on the region’s future eco­nom­ic suc­cess. The report, which was com­mis­sioned by the Toron­to Finan­cial Ser­vices Alliance (TFSA), states that although there is great poten­tial in the region, there is no true Fin­tech ecosys­tem and var­i­ous fac­tors are inhibit­ing its devel­op­ment – this comes at a cost to the region’s over­all eco­nom­ic growth.

Pro­fes­sors Dan Breznitz and David A. Wolfe, Co-Direc­tors of the Inno­va­tion Pol­i­cy Lab at the Uni­ver­si­ty of Toronto’s Munk School of Glob­al Affairs, with sup­port from Assis­tant Pro­fes­sor Shiri Breznitz, under­took a strate­gic map­ping study of the key Fin­tech play­ers, resources and inno­va­tion assets in the Toron­to region. The report’s find­ings led the authors to make rec­om­men­da­tions on how to sup­port Toronto’s finan­cial ser­vices indus­try and the Fin­tech sec­tor, and to estab­lish the Toron­to region as a glob­al Fin­tech hub.

“We have most of the right ingre­di­ents, but we are oper­at­ing far below our real poten­tial,” said Pro­fes­sor Dan 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.”

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. The key find­ings from the report include: 

  • 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.
  • While progress is being made, Cana­di­an finan­cial insti­tu­tions do not act as true part­ners to Fin­tech start-ups 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.


  • 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.
  • 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 the Fin­tech start-ups than in oth­er glob­al cen­tres.
  • Also, cur­rent reg­u­la­tions make it very dif­fi­cult to under­take the low-lev­el-rapid-exper­i­men­ta­tion that is 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.
  • A crit­i­cal ele­ment that is miss­ing in Toron­to is the pres­ence of large, inex­pen­sive incu­ba­tor cen­tres with­in the finan­cial dis­trict, offer­ing basic ser­vices with high con­nec­tiv­i­ty at high­ly dis­count­ed rates.  While a num­ber of incu­ba­tors exist, they are either more expen­sive than their coun­ter­parts in Lon­don and New York, are locat­ed far away from the finan­cial indus­try or are not yet work­ing col­lab­o­ra­tive­ly as they need to.
  • Although the fed­er­al and provin­cial gov­ern­ments have made efforts to increase the sup­ply of seed and ear­ly ven­ture cap­i­tal to start-ups, there is still a short­age – a more direct approach through grants or con­di­tion­al­ly repayable loans should be con­sid­ered as pol­i­cy reform by gov­ern­ment.

“Both Fin­tech inno­va­tors and what we have defined as the ‘tra­di­tion­al’ finan­cial com­pa­nies are both essen­tial to our growth and pros­per­i­ty,” said Janet Eck­er, Pres­i­dent and CEO of the Toron­to Finan­cial Ser­vices Alliance. “The ben­e­fit of col­lab­o­ra­tion between these two groups is that finan­cial com­pa­nies have large exist­ing cus­tomer bases that the Fin­tech com­mu­ni­ty can lever­age and cross-sell to, and the Fin­tech start-ups tend to have effec­tive and sig­nif­i­cant­ly low­er cus­tomer acqui­si­tion costs that can help finan­cial com­pa­nies. Part­ner­ship could be a solu­tion to the issues each group is fac­ing.”

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.

Added Pro­fes­sor David A. Wolfe: “The find­ings of this report are an impor­tant call-to-action for the TFSA and its part­ners, like the Ontario Cen­tres of Excel­lence, to address the cur­rent silos between Fin­tech firms and the large finan­cial insti­tu­tions, if we’re going to dri­ve future growth. 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.”

A copy of the report is avail­able for down­load­ing at:


The MUNK SCHOOL OF GLOBAL AFFAIRS at the Uni­ver­si­ty of Toron­to is home to more than 35 pro­grams of advanced research and edu­ca­tion on the chal­lenges, orga­ni­za­tions, and ideas that are reshap­ing the glob­al land­scape. Munk School schol­ars and prac­ti­tion­ers tack­le glob­al prob­lems in research labs on the geopol­i­tics of cyber­space, dig­i­tal diplo­ma­cy, inno­va­tion pol­i­cy, envi­ron­men­tal gov­er­nance, and glob­al jus­tice, and through a flag­ship pro­fes­sion­al Mas­ter of Glob­al Affairs.

The Inno­va­tion Pol­i­cy Lab (IPL) is the excit­ing new hub with­in the Munk School of Glob­al Affairs whose mis­sion is to study, teach, and apply nov­el meth­ods and dis­ci­plines to the study of inno­va­tion and its impact on growth and soci­ety.

Bring­ing togeth­er teams of researchers from mul­ti­ple schools and depart­ments at the Uni­ver­si­ty of Toron­to, as well as from oth­er insti­tu­tions in coun­tries across the globe, the IPL focus­es on core ques­tions in a num­ber of areas includ­ing inno­va­tion and growth, inno­va­tion and inequal­i­ty, glob­al­iza­tion and inno­va­tion, social inno­va­tion, new tech­nolo­gies and their impact on soci­ety, inno­va­tion in tra­di­tion­al indus­tries, and arts and inno­va­tion. Since our aim is not only to advance basic research but also to effect change, we pay par­tic­u­lar atten­tion to the role of pub­lic pol­i­cy in nur­tur­ing inno­va­tion, while at the same time enhanc­ing its pos­i­tive impacts on soci­ety and lim­it­ing its neg­a­tive con­se­quences.

 About the TFSA:

The Toron­to Finan­cial Ser­vices Alliance (TFSA) is a unique, public–private part­ner­ship ded­i­cat­ed to grow­ing Toron­to region’s finan­cial ser­vices clus­ter and build­ing it as a “top ten” glob­al finan­cial ser­vices cen­tre. Estab­lished in 2001, TFSA is a col­lab­o­ra­tion involv­ing three lev­els of gov­ern­ment, the finan­cial ser­vices indus­try and acad­e­mia. Work­ing col­lab­o­ra­tive­ly with indus­try and gov­ern­ment, it builds inter­na­tion­al aware­ness of the advan­tages offered by the Toron­to region and works with finan­cial ser­vices com­pa­nies from around the world that are explor­ing busi­ness oppor­tu­ni­ties in Toron­to. To lever­age the finan­cial industry’s glob­al rep­u­ta­tion for sta­bil­i­ty, TFSA estab­lished the Glob­al Risk Insti­tute in Finan­cial Ser­vices. To cap­i­tal­ize on Toron­to region’s tal­ent advan­tages, it also estab­lished the Cen­tre of Excel­lence in Finan­cial Ser­vices Edu­ca­tion. For more infor­ma­tion, please check the web­site at



To request an inter­view with Janet Eck­er of the TFSA and the authors of the report, Pro­fes­sors Dan Breznitz and David A. Wolfe, please con­tact:

Andrea Elli­son
Mans­field Inc.

Addi­tion­al media con­tacts:


Adri­enne Har­ry
Dig­i­tal Com­mu­ni­ca­tions Spe­cial­ist
Munk School of Glob­al Affairs | Uni­ver­si­ty of Toron­to


Mar­ta Andradz­ka
Mar­ket­ing Man­ag­er