John Pecman, Commissioner of Competition stated:
“The FinTech market study will provide guidance to the Bureau and regulators, to nurture an environment that allows Canada’s FinTech companies to innovate, grow and compete globally.”
Pecman believes that FinTech has the potential to disrupt the financial services sector, spur innovation and generate benefits for individuals and companies across Canada.
The Bureau intends to focus on innovations that affect the way Canadian consumers and small and medium businesses commonly encounter financial products and services, including:
- peer‑to‑peer banking (e.g., peer‑to‑peer lending and transfers)
- e‑wallets, mobile wallets and payments
- crowdfunding, in particular for small and medium‑sized business capital
- online‑based financial advisory services (also known as “robo‑advisors”)
The study will explore the competitive impact that FinTech is having on the industry, barriers to entry faced by companies, and whether there is a need for regulatory reform to promote greater competition while maintaining consumer confidence in the sector.
Key Questions for the Study
The Competition Bureau is concerned that:
- With the continued and rapid speed of innovation in the digital economy, tools designed for yesterday’s marketplace may not work well tomorrow
- When innovation is unnecessarily stifled—by regulation or otherwise—the result can be a less competitive and less dynamic marketplace
- Similarly, without conscious oversight, when heavily regulated markets become less regulated, consumers can be left exposed without the tools or information to make sound decisions
With these potential risks in mind, the Study will aim to answer the following key questions:
- What has been the impact of technology‑led innovation on the competitive landscape?
- What is happening to competition?
- How will innovation impact competition in the future?
- How will consumers benefit from FinTech?
- What are the barriers to entry, expansion, or adoption for FinTech companies? Are the barriers regulatory or structural?
- What is the current state of the regulatory framework for financial services?
- Does the regulatory framework support or inhibit competition and innovation?
- Are regulatory changes required to encourage greater competition and innovation in the sector?
- Are the consumer protections in place today enough to adapt for the future?
- What additional protections should be put in place for consumers?
- Is there a need for greater transparency in fees?
- What issues should be considered when developing or amending regulations to ensure competition is not unnecessarily restricted?
Interested stakeholders are invited to make a submission to the Bureau.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.