the Fintech industry in Canada is disrupting the traditional baking industry and creating challenges for those banks that don't adopt technology as part of their business strategy. The following is an industry white paper that outlines some of the trends in the industry currently, and questions fintech companies and banks alike should ask themselves while they undertake their strategic planning process.

1. | Jeremie Mariton
1
FinTech market
| Industry report and recommenda2ons

2. | Jeremie Mariton
Executive Summary
Industry Overview………………………………………………………………… 3
Industry defini2on……………………………………………………………………………...
Main ac2vi2es..........................................................................................
Main compe2tors……………………………………………………………………………….
Key figures…………………………………………………………………………… 4
Industry trends…………………………………………………………………….. 5
A growing industry……………………………………………………………………………..
A closer link between banks and FinTech start-ups……………………………..
New disrup2ons………………………………………………………………………………….
More compe22on………………………………………………………………………………
Key success factors………………………………………………………………. 7
Porter’s 5 forces analysis……………………………………………………… 8
Compe22ve forces……………………………………………………………………………..
What does that mean for your business?...............................................
SWOT analysis……………………………………………………………………… 10
Ques2ons to ask yourself…………………………………………………….. 11
Resources…………………………………………………………………………….. 12
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3. | Jeremie Mariton
Industry overview
The FinTech Industry uses
technology to make financial
services more efficient and user-
friendly. FinTech companies are
generally small startups disrup2ng
the tradi2onal financial sector
in such fields as mobile payments,
loans, money transfers,
fundraising and asset
management.
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• Financial Crime detec2on
• Cybersecurity
• Financial data & Analy2cs
• Personal Lending
• Business Lending
• Payment techonologies
• Crypto currency
• Banking and insurance
• Capital Markets
• PFM Tech
• Financial consolidators
Industry
definition
Main activities
In Bri/sh Columbia
• Payso
• Payfirma
• Control
• WealthBar
• Zafin
• Trulioo
• Mogo.ca
In Canada
• Payfirma
• Aimia
• Points Interna2onal
• Wealth Simple
• Zafin
• Berkeley
• Shopify
• Carta Worldwide
• Ethoca
• Grouplend
• Verafin
Main
Competitors

4. | Jeremie Mariton
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Key figures
Industry at a
glance $ 20
billion
global FinTech
Investment in
2015
Other interes2ng figures:
• 43% of consumers adopt fintech
solu2ons because they are easy to use.
• With 16.5%, the US market has the
second highest fintech adop2on rate
ader Hong-Kong.
8.2%
FinTech
Adop2on Rate
in Canada
92%
Year-on-year
rise in FinTech
investment
(2015)
44%
of millennials
would rather
use their
mobile phone
to pay small
items
Money transfers, payments, savings and
investments are most used fintech
services
Main barriers preven2ng
consumer adop2on of fintech

5. | Jeremie Mariton
Industry trends
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Since 2014 the number of players
within the FinTech industry has
grown exponen2ally: Start-ups,
investor teams, Venture Capitals,
and accelerators; They are all
brand new players changing
quickly industry features.
One of the main reasons the
FinTech industry is evolving at
such a fast pace is the tremendous
growth in investment over the
past two years. Global FinTech
investment doubled in 2015
reaching $20 bn.
This investment trend is fostered
by the public market’s appe2te for
FinTech: Technology spending by
Canadian financial sector will rise
by more than $1.5 bn by 2018.
The number of consumers
adop2ng is also expected to rise
drama2cally. Today, only 8.2% of
digitally ac2ve consumers use
FinTech products in Canada. This
year (2016), this percentage should
almost triple, which is for every
industry player a prime opportunity
to grow.
Another trend going on is the new
rapprochement between Fintech
start-ups and financial ins2tu2ons.
As a mamer of fact, banks need
Fintech as much as Fintech need
banks. Financial ins2tu2ons are
challenged on their products by
start-ups who are more effec2vely
matching consumer’s needs for
easy-to-use products/services with
lower management and interest
fees.
Conversely, FinTech companies
need bank’s clients as their
business models require a large
base of customers to make
money.
One of the greatest challenges for
FinTech start-ups will be to earn
the trust of customers and make
their brand known.
FinTech companies are expected
to grow fast as venture capital
model generally provide funds for
only 3 or 4 years.
Weaknesses of banks match the
strengths of Fintech firms and
conversely, the weaknesses of
FinTech firms match the strengths
of banks.
Financial Ins2tu2ons and Fintech
companies have more interest in
working hand in hand than waging
war upon each other.
Vancouver is one of the best
places in Canada for FinTech
investment. A dense network of
start-ups, a great ability to amract
talent, a global lens and a deep
sense of entrepreneurship are all
reasons to think that Vancouver is
uniquely posi2oned for FinTech
success.
A growing
industry
A closer link
between
financial
institutions and
Fintech start-
ups
“Fintech is changing the face of
global payments. Global
investment in fintech ventures
tripled in 2014 “
For many FinTech companies, the key to
success will be partnering well.

6. | Jeremie Mariton
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In 2015, 2 main segments
represented most financial
innova2ons: payments and
lending. In 2016,new categories of
disrup2on such as insurance and
mortgages should be on the way.
Insurance represents a huge
opportunity for FinTech
companies: a big market, a lack of
sa2sfac2on and trust with major
players, high barriers to entry into
means the insurance industry is
begging for disrup2on!
Best innova2on examples in this
Industry are: using crowdsourcing
to reduce costs and claims, and
using technology and data to
gather data and …
calculate premiums. (Using speed
and mileage trackers in your car
for example)
The mortgage Industry is also
primed for disrup2on. Consumers
can now find all they need and
calculate their mortgage online
with the help of robots instead of
humans. Soon, they will also call
on P2P lending plasorms to get
their loan instead of tradi2onal
channels.
New
disruptions
Insurance and Mortgage Industry
are expected to be the next
fron2ers for FinTech.
FinTech market is amrac2ve and
compe22on is hea2ng up quickly.
There are between 100 and 200
companies compe2ng in the
Canadian marketplace currently
with the number of new entrants
expected to increase significantly
FinTech companies will have to
cope with a more compe22ve
environment which creates a few
possibili2es for all players:
1) Increased compe22on will put
greater downward pressure on
prices, further erroding margins for
tradi2onal ins2tu2ons.
2)It will create greater innova2on
within exis2ng and new firms
putng more pressure on
tradi2onal ins2tu2ons to innovate
and adapt technology in order to
stay compe22ve.
More
competition
Industry trends

7. | Jeremie Mariton
Key
success
factors
4) Ability to raise
significant amounts of
money
FinTech start ups require
huge amounts of capital to
reach millions of
customers and gain a
significant market share as
quickly as they can.
For a new venture to be
successful in a compe22ve
market it needs large
amounts of cash.
7
3) Partnerships with Financial Ins/tu/ons
A closer link between banks and Start-ups
is certainly the key success factor in this
industry . Banks have everything to make
a start-up grow: an exis2ng customer
base, a reputa2on for trust, experience
with regulators, effec2ve risk
management programmes not to men2on
a big investment capital.
For example: Banks like BBVA already
understood the opportunity of FinTech
and started to invest massively in
compe22ve start ups like Dwolla.
-Forbes: hmp://buff.ly/1WGGc3t
1) Large customer base
As men2oned earlier, one of
the biggest challenges for
FinTech companies is to get a
large customer base to make
profits.
They can achieve this goal by
either increasing their value
proposi2on on their own or
partnering with banks.
2) Knowledge of the target
customers
Key consumers for FinTech
Industry are millennials.
According to a recent study from
EY, millennials represent more
than 25% of FinTech adopters
and this percentage could reach
50% this year.
They are also considered the
most valuable because of their
propor2onal contribu2on of
income into investments
For these reasons, FinTech
companies should target
millennials and create products
that meet their needs.
5) Abitlity to aHract talent
Innova2on is also a strategic
key to stay compe22ve in
FinTech industry.; to foster
innova2on you need talent.
Canada - and more
specifically Vancouver - is a
hotbed of talent when it
comes to financial
technologies, privacy and
security technologies.
The most successful players
will be those with the best
people and culture around
them.

8. | Jeremie Mariton
Porter’s 5 forces analysis
8
Competitive
forces
Porter’s 5 forces allows you to
determine how profitable your market
is now and how profitable it will be in
the future.
By evalua2ng the power and impact of
customers, compe2tors and the landscape of
the market it helps you plan where you can be
successful and avoid more challenging markets
Threat of new entrants
High - The number of compe2tors
is expected to rise significantly and
banks are also getng into the
game partnering with major
FinTech companies.
Bargaining power of suppliers
Low – Few or no suppliers.
Threat of subs2tute products or
services
Medium/High – Innova2on in the
FinTech industry are spreading
quickly and subs2tutes are being
launched daily.
Bargaining power of clients
Low – and Increasing. As more
op2ons arise, margins will
decrease for all organiza2ons.
Rivalry among exis2ng compe2tors
Medium – FinTech is a brand new
market gaining momentum and
compe22on is increasing

9. | Jeremie Mariton
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We can draw several conclusions
from Porter’s 5 forces analysis:
• There are new opportuni2es of
disrup2on in FinTech which
means the market might turn
out to be highly profitable.
• FinTech market is growing
quickly and there are many new
opportuni2es to innovate and
gain market share.
• None the less FinTech’s
profitability is threatened
because of an increasingly
compe22ve marketplace
• The threat of new compe2tors,
and the likelihood that they
develop similar products or
services are high..
as such a highly defensible
compe22ve posi2on needs to be
adopted as quickly as possible.
• Those who will succeed are those
able to develop in-imitable
solu2ons or those that grow much
faster than their compe2tors.
• To be successful you need to
provide a higher value than
your compe2tors, have a large
customer base, and con2nue to
innovate to maintain your
margins and profitability.
The ques2on is: Do you offer
enough value to win a greater
market share?
What does that
mean for your
business?
The market will grow quickly
driven by innova2on and
consumer demand, and then
contract as compe22on
increases.
Is FinTech a profitable market? Yes, for the
moment, innova2ve start ups have been able
to carve market share from established
ins2tu2ons slow to adapt, innovate and
change.
Porter’s 5 forces analysis

10. | Jeremie Mariton
SWOT analysis
10
Opportuni2es
• Market growth.
• The millennials: early FinTech
adopters, higher-income
customers.
• Partnerships with banks or
other players.
• Big investment in FinTech:
Venture capital, banks…
Threats
• New compe2tors.
• New partnerships between
your compe2tors and banks.
• New regula2ons on FinTech
market (law?).
• Consumers lack of trust in
FinTech.
• A FinTech bubble (unicorns)?
Strengths
____________________________
____________________________
____________________________
Weaknesses
___________________________
___________________________
___________________________
What are you
organiza2on’s strengths
and weaknesses?
What Specific Opportuni2es and
threats exist for your organiza2on
in the near future?

11. | Jeremie Mariton
Questions to ask yourself
11
• What is your strategy and ac2on plan for the future
given these industry trends?
• Do you think your teams and ac2vity are aligned with
this strategy?
• Do you have a plan in place to implement your
strategy?
• What challenges do you see given this trends?
• Does your whole team see the future in the same
way?
• How does your company vision fit within this future?
• What needs to change for you to achieve your
desired future?
• How are you going to react to your compe22on?
• Want help answering these ques2ons?
Contact us :
SME Strategy Consul2ng
778-895-5447 | Info@smestrategy.net
128 Has2ngs Street Vancouver,
Canada. V6B 1G8

12. | Jeremie Mariton
12
Resources
1. hmp://techcrunch.com/2015/08/05/insurance-is-the-next-fron2er-for-fintech/
2. hmp://www.techvibes.com/blog/the-amazing-poten2al-of-financial-technology-in-
vancouver-2015-09-02
3. hmps://info.bbva.com/en/news/general/five-fintech-trends-for-2016/
4. hmp://business.financialpost.com/news/fp-street/canadian-adop2on-of-fintech-products-set-to-
triple-in-a-year-report
5. hmp://www.theglobeandmail.com/report-on-business/small-business/sb-money/next-big-
sector-to-face-disrup2on-financial-services/ar2cle23025801/
6. hmp://business.financialpost.com/news/fp-street/credit-unions-beginning-to-embrace-fintech-
the-way-canadians-use-financial-services-is-rapidly-changing
7. hmp://www.bcic.ca/blog/2015/industry-spotlight-fintech
8. hmp://www.finyear.com/Les-FinTech-en-2015-Infographie_a34928.html
9. hmp://www.adweek.com/news/adver2sing-branding/why-mobile-payments-are-millennial-
must-161163
10. hmp://thefinancialbrand.com/56561/fintech-adop2on-banking-disrup2on-index/
11. hmp://www.pwc.com/ca/en/media/release/2016-03-10-investment-fintech-canadian-
banking.html
12. hmp://www.ey.com/GL/en/Industries/Financial-Services/ey-fintech-adop2on-index
13. PwC report on Investment Fintech Canadian banking 2015
14. McKinsey report on Fintech Industry 2015