UK: Rise of New Partnerships Despite Canada’s Slow Fintech Adoption

Over the last 18 months, fintech adoption in Canada has risen by 10%, according to Ernst & Young’s Fintech Adoption Index. However, in comparison to adoption rates globally, Canada is progressing at a slower pace than other countries.

According to the report, 33% of digitally active consumers (globally?) have used two or more fintech services in the last six months, with China witnessing the highest adoption rate of 69%, followed by India at 52%, and Britain at 42%, whilst Canada stands at 18%. Still, the proportion using fintech services in Canada is likely to rise, with RFi Group data showing that 1 in 4 Canadians find the products and services offered by fintechs appealing (a score of 6+ out of 10, where 10 is extremely appealing).

EY Canada’s fintech leader, Ron Stokes, believes Canada’s slow uptake of fintech services could be due to Canada’s experience in dealing with the 2008 financial crisis compared to other countries, stating that: “Canadian banks weathered the financial crisis without a lack of consumer confidence…in other countries, consumers were not happy with their traditional financial players, and therefore an opportunity opened up for these fintech companies.”

In order to overcome the slower paced adoption, Canadian banks are starting to increase partnerships with fintechs. For example, Royal Bank of Canada has acquired Toronto-based fintech, Wiser Investments, resulting in an in-house innovation lab being set up within RBC’s global asset management division. Similarly, CIBC has recently partnered with Thinking Capital Inc. for online small business loans, while Scotiabank has entered a partnership with Kabbage Inc. for a similar purpose.

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