As Canada’s financial technology publication of record, Fintech.ca reports on and discusses at length the many entrepreneurs and organizations applying cutting-edge technology and a modern lens to the country’s stodgy financial terrain.
Fintech is often about reducing costs, simplifying processes, and digitizing paperwork. It’s about maximizing efficiency, optimizing returns, and increasing accessibility to products and services across industries and classes. It’s about the status quo—incumbent Finance—learning to play productively with the new big kid on the block: Technology.
But what is it really? What are the fundamental technologies at play?
Let’s take a closer look at some of the most prevalent tech trends at play in finance today.
Blockchain
A blockchain is a system of recording information in a way that is secure, transparent, and unalterable because the data is not centralized in a single location.
Wait, what?
Imagine you and several of your friends decide to start a book club and wanted to keep a reliable record of every book read, who suggested it, and when it was discussed. You might start a ledger.
Every time a book is read, the person who suggested it writes down the title, the date, and signs their name. Each entry, or “block,” is shown to the entire group before being added to the “chain” of entries in the ledger. This way, the entire group validates the new entry. And if someone tries to change an entry, everyone would know, because they all have copies of the ledger.
Canadian fintechs leveraging blockchain technology include Wellfield and Gigamatic as well as the recently combined WonderFi Technologies, Coinsquare, and CoinSmart.
Artificial Intelligence
AI is a technology that empowers machines with the ability to mimic human cognitive functions such as learning, reasoning, and problem-solving.
Let’s break that down a little.
Think of artificial intelligence as an assistant in a restaurant kitchen. You, as the chef, tell it to prepare a certain dish. The assistant will analyze a cookbook (or 100), understand the recipe, and execute it with precision. And if the assistant has made the dish before, it might even suggest improvements based on past results.
Just like this lovely chef’s assistant, AI systems can analyze vast amounts of data, learn from it, make decisions, and improve over time, helping humans solve complex problems more efficiently.
Canadian fintechs tapping into this tech are myriad, including Shopify, Pilot Trading, and APOLLO.
Digital Transformation
Digital transformation refers to the strategic adoption of digital tools and technology to improve business processes, enhance customer experiences, and adapt to a changing business environment.
But what does that look like in the real world?
Picture a restaurant that has only ever accepted walk-in customers. To adapt to an increasingly digital world, the restaurant starts a website where customers can reserve tables and even order food for delivery. It also begins using digital-based tools for managing inventory, scheduling staff, and gathering customer feedback.
This multifaceted shift toward leaning on digital solutions for critical aspects of running the restaurant is one example of digital transformation affecting most industries.
Most of today’s hottest financial technology startups are in some way contributing to the digital transformation of Canada’s traditional financial sector—there are simply too many to name. But to bolster out restaurant example, Canadian fintechs disrupting the food service sector include Tab Commerce, Lightspeed, and Moneris.
Decoded Tech
Looking to better understand even more tech terms and trends in Canadian fintech and beyond? Check out the DECODER Dictionary for a wealth of knowledge.
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