The financial services sector is among Canada's key industries. Banks and insurance companies represent around 7% of the gross domestic product. However, the Canadian financial sector has not historically been one to embrace innovation. Despite the fact that Canada has one of the highest levels of Internet usage, users have lagged far behind other comparable countries when it comes to fintech products. According to a study, in 2015 only 8% of digitally active consumers used more than two fintech applications. In comparison: it was 13% of consumers in Australia, 14% in the United Kingdom and 17% in the USA. According the the study results, however, the number of Canadians who use fintech products tripled to 24% in 2016.
Security concerns play only a minor role. Canadians have a high level of trust in their banking system: only one in ten Canadians see banking transactions or payments via smartphone as a security risk. The acceptance level for fintech is highest among young, high-income consumers.
Vibrant start-up scene
Due to the positive growth prospects, a vibrant start-up scene has emerged in recent years. According to a market research study, technology investments in the Canadian financial sector are set to increase from 12 billion Canadian dollars in 2013 to 15 billion in 2018. Most of the companies are active in the area of electronic payment systems and commerce.
In Toronto, Canada's financial center, the country's first fintech cluster has begun to establish itself. Banks, insurance companies and payment-solution providers are working together there.