Recently, a KPMG report was released indicating that Canada’s FinTech industry is still quickly accelerating, particularly in Artificial Intelligence.
Of all the aspects of traditional FinTech (as opposed to cryptocurrency and blockchain) that remain cutting edge, research into Artificial Intelligence is at the top. Already, financial technology has revolutionized the way people interact with their money and their bank. But Artificial Intelligence stands poised to take it one step further.
According to the KPMG report:
“Canada continues to make strides to become a global player in AI, driven by Canadian government support and the presence of strong AI innovators at several Canadian universities.”
It’s not just FinTech companies themselves driving the innovation, but the education facilities that have identified it as a priority for innovation. If Artificial Intelligence is truly going to become the major factor it is hailed to become, Canada stands poised to be a global leader.
Here’s why that’s important:
Why is Artificial Intelligence Important to FinTech?
The hype around machine learning and artificial intelligence is impacting many industries, but few have as much potential for its implementation than Finance. As consumers demand more flexible and dynamic responses to their needs, banks can struggle to keep up.
But with the predictive power of machine learning products and services can be tailored and offered to customers before they’re even aware of needing them. This provides an extremely important advantage for banks looking to differentiate themselves in a hyper-competitive market that is increasingly going head to head with tech giants like Amazon and Google.
Machine learning has the ability to analyze data at far greater volume and with far more detail than would be possible with conventional methods. Using advanced algorithms, it can give banks deeper insights into the needs of their customers than was ever possible before.
This can help nurture relationships, reduce churn, and increase customer satisfaction. Plus, due to the implementation of deep learning elsewhere (Netflix is getting pretty good at predicting your next favourite movie, right?) people are beginning to demand a level highly-tailored interaction. They will naturally gravitate towards institutions able to offer them what they’re comfortable with.
It’s pretty clear why FinTech is interested in adopting artificial intelligence. But why is Canada at the forefront of innovation?
Canada as a Leader in Artificial Intelligence FinTech
While Canada has lagged a little behind the United States and Europe in its adoption of FinTech, it’s acceleration continues even as other countries taper off. And nowhere is this more evident than it’s pursuit of artificial intelligence FinTech solutions.
As mentioned above, this is partly due to academic interest in the field at Canadian universities. That, coupled with Canada’s stable economy and low exchange rate are making it quite tempting for American VCs and investors to look Northward.
“Canada is a hotbed for FinTech innovation, with increasingly solid FinTech hubs, a number of world-class FinTech innovators and strong governmental support,” said John Armstrong, KPMG’s national industry leader of financial services in Canada, to BetaKit. “Canadian banks are also deeply engaged with FinTech players and constantly thinking about how they can deploy FinTech within their organizations. It’s no surprise PE and VC firms south of the border are looking to Canada for deal opportunities.”
Government support of Canadian FinTech is also quite high, although most of that support has been for blockchain-based companies, according to the KPMG report.
Between university research and education, engaged banks, a supportive government and a lucrative space for investment, it looks like Canadian FinTech will continue its ascendancy in the artificial intelligence space.
Zafin (@zafin) is a leading financial technology provider that enables banks to form richer, more personalized client relationships. Built from the ground up for financial services, its platform empowers banks to enhance revenue and operational efficiency. Founded in 2002, Zafin sits among North America’s top FinTech companies, and is trusted by retail and corporate units at some of the largest banks worldwide. Headquartered in Toronto with global offices, Zafin has a proven track record with a 100 percent client retention rate as validation.
Cam is the Digital Communications and Marketing Coordinator at Zafin. With a background in journalism and a passion for blogging, Cam strives to tell compelling digital stories. At Zafin he will share the latest trends and news in the FinTech world, and share Zafin’s role as leader in the industry. Follow him on Twitter @CamSmoth