The road ahead for the Canadian fintech industry is paved with good impressions, as the sector has grown tremendously in the past 10 years and the future looks optimistic.

By focusing on customer-centred product design via strong automation tools, and bringing backing to the devices people use, Canadian fintech startups are meeting the needs of customers who want digital solutions for problems that used to be solved with age-old tools.

Alberta is also poised to become a hotbed of fintech action, due to the province’s artificial intelligence (AI) investments and its own home-grown solutions. It’s clear Albertans, home to some of the youngest consumers in Canada, want to conduct financial transactions seamlessly and smoothly.

Consumers are seeking more from their everyday banking

The acceptance of open banking, the need for customization and to build better financial habits, and just seeking change and a new way of banking all help to drive the financial-tech momentum forward in the country.

“Canada is becoming very much aligned with the pace of adoption and deployment of fintech solutions we’re seeing across the world,” as a report from PriceWaterhouseCoopers states.

The investment in fintech has reached astounding numbers: KPMG found that global investment in fintech companies reached $135.7 billion US across 2,693 deals.

In Canada, fintech use leapt to 50 per cent in 2019, up from 18 per cent in 2017, the Financial Post writes.

Fintech and the generational shift

As the financial landscape is changing faster than ever, ATB saw an opportunity to build a new banking experience for Albertans. From this opportunity Brightside was built, a digital banking app to help Albertans spend and save for what they love, without giving up what they love.

“No one has just one primary bank anymore. Most consumers have at least two financial institutions,” says Caitlin Meachin, Senior Research Manager at Brightside. “And as people are diversifying banking services across institutions and apps they’re diversifying their expectations.”

Younger Canadians are looking for support to become more proactive with their money. They don’t want to go into branches to set up accounts or apply for loans. It’s much simpler for them to go online via their smartphone or computer. And oftentimes budgeting is so reactionary for them, there hasn’t been a tool with a proactive stance to manage funds the way people want.

“This younger generation is showing us how informed the customer is. The notion of just using their bank isn’t enough,” adds Caitlin. “They are seeking change and ‘a better way’ to make their money work for them and at Brightside, we’re constantly asking ourselves ‘how are we solving this group’s problems’?”

Also, customers expect more control over their money; the immediate right now money in and out kind of control, but also control over habit building that sets their future self up for success. Brightside is giving people control of managing their money with buckets. You can control how many buckets you have, how your money moves between them, and what you name them, giving them purpose.

Another type of control Brightside has built to help their customers through fintech solutions is ‘card controls’ which is when someone can freeze a card through an app if she thinks it might be lost or stolen, or even to keep away temptation from spending themselves.

Alberta and fintech for the win

On Canadian fintech and Alberta, the market appetite for fintech and its accompanying changes is growing. Every year the population of Canada shifts towards being more and more digitally savvy, roughly correlated to age, and Alberta has one of the youngest populations in Canada.

ATB has also developed next-gen banking tools fitting securely into the fintech groove. ATB's four directions branch is an amazing initiative and uses biometric technology to help work with the ‘underbanked' and 'unbanked'. Also, ATB’s migration to the Google Cloud suite, for internal operations, was considered a very innovative and successful move.

It helps that Alberta is also home to machine-learning hubs such as AltaML, because machine-learning and automation is quickly becoming a major value proposition to the banking industry.

The province’s relationship to another well-known industry could also be giving it a fintech booster shot. Mary Moran, president and CEO of Calgary Economic Development, told the Calgary Herald: “I think it’s even easier for people in Alberta to make investments in fintech than in high-tech, because it’s closer to their main industry of oil and gas. Financial services is quite closely related to the energy industry.”

Apple and Amazon could change everything

What’s hanging over the heads of both major banks and upstart fintech trailblazers is how swiftly this industry could transform if a tech titan stepped into the ring. One of the things rarely talked about is what happens when a company like Amazon wants to build a fintech solution in a very real way. If customers are already used to having their money flow through Amazon for purchases, they might think it makes sense to bank with Amazon too, if that comes to pass.

Apple could also shift the tectonic plates within fintech, especially if it delves into payment technology. What it did to the music industry with iTunes and how it upended the mobile handset market could also be replicated in a segment such as credit cards. “If there’s an Apple credit card, why would customers choose one from their bank? Few companies have as untouchable reputations as Apple and Amazon do,” adds Brightside.

Even if these Silicon Valley giants start to crowd the market, there are two ways a fintech startup can differentiate itself: brand and personality, and innovative products and nuances within fintech. Do one thing really well, make it frictionless, and customers will take notice.

Canada’s banks may be investing billions on technology to upgrade their systems and attract more forward-thinking consumers, but the energy and innovation behind Canadian fintech and Alberta startups can’t be ignored. Legacy banks are finding themselves playing catch-up to a fintech revolution rippling from Prince Edward Island to British Columbia, as Canadians demand to see their financial institutions respond to their increasingly online-only and mobile-friendly lifestyles.