Emerging FinTech Booming in Canada

January 12, 2017


Seismic shift in banking service, active investors and technology infrastructure driving FinTech growth

By Howard Oliver, Manager, Marketing Communications, I.C.E Datacenters – Metro Optic

Reuters starts the new year reporting that venture capital-backed investment in Canadian financial technology (FinTech) companies hit its highest level in almost 20 years in 2016.  In the report on global FinTech hubs[1], the Global FinTech Hubs Federation notes that the FinTech industry in Canada has been gaining considerable momentum in recent years.

FinTechs use technology to innovate everything from banking to fraud security, globally draw billions in annual investment. In Canada, FinTech is energizing and challenging the traditional financial services sector. According to US-based PitchBook, venture capital financing in Canadian fintech companies was $137.7 million in 2016, up more than 35 percent from 2015. Five years ago, it was $21.8 million and in 2000 it was $7.3 million.[2] Over 100 Canadian FinTech startups have raised over $1 billion since 2010. By 2018, technology spending by Canadian financial sector is expected to hit almost $15 billion[3].

A progressive traditional sector, supportive federal, provincial and municipal governments and international interest serve as the foundation for the strong performance of Canada’s FinTech industry. The six most powerful banks in Canada recognize that innovations are inevitable, so they have an incentive to be active participants, rather than facing challenges from powerful outsiders. Naturally, FinTech companies are growing up within the large financial services sector particularly in Toronto and Montreal:

FinTech is also reliant on the global interconnected network of data centers. The explosive growth of FinTech, Big Data, Cloud Computing and other factors have driven the expansion of data centers and high-speed connectivity. The global colocation market predicted to reach $36 billion by the end of 2017[5]. Annual global IP traffic will pass the zettabyte ([ZB]; 1000 exabytes [EB]) threshold by the end of 2016, and will reach 2.3 ZB per year by 2020[6]. Closer to home, new data centers have opened in Markham, Ontario to provide an alternative to existing facilities in the city’s core. There is a strong FinTech community in York Region[7]. Leading the way, I.C.E Datacenters has recently opened data centers in Markham with an independent fiber optic network to its sister data center in Montreal’s core.

At a high level, FinTech companies require a data center and data center services that meet their IT Infrastructure requirements, such as airtight security, compliance, and efficiency:

The key lessons to be learned are about flexibility capabilities for the future and solutions which are scalable and future-proof. A subsequent post will explore the FinTech infrastructure in greater detail.

About I.C.E Datacenters: I.C.E Datacenters (Interconnection & Colocation for the Enterprise) operates multiple datacenter sites in Canada. These include a leading interconnection site at 875 Saint-Antoine O. in Montreal and another flagship facility for Colocation and Interconnection recently opened in Toronto (Markham). I.C.E combines deep datacenter expertise serving enterprises in the U.S. and Canada with know-how in operating high-speed fiber networks. I.C.E serves 100+ clients including global network providers, Fortune 500 companies in industry, e-commerce, financial services and healthcare, the government, cloud providers, ISPs, content providers and CDNs across its datacenter and fiber network in Canada.;