Fintech Overview MaRS May2017-Zurich MPG€¦ · Financeitin 2015 & nanoPayin 2016 Japan’s NTT Data Corp ($14.6B revenue FY 2016) partnered with MaRSin Nov 2016 to obtain access

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FINTECH OVERVIEW2017

Salim TejaExecutive Vice President,Venture ServicesMaRS Discovery District

Michelle Peng GreenbergPartnerships,Finance & CommerceMaRS Discovery District

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Source: KPMG

CANADA: AN ENABLING BUSINESS ENVIRONMENT

One of the best countries for business in the G20Canada is 2nd largest recipient of foreign direct investment inflows per capita, 2011-2015

AAA rating from S&P, Moody’s and FitchCanada leads the G20 in terms of its fiscal strength

Lowest corporate tax rate in the G7Combined corporate income tax rates of 26.3% is 12.8% lower than the US

World leading cost-effective R&D environmentR&D-intensive sectors in Canada have the lowest costs in the G7 (27.7% lower than the US)

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Source: Invest Canada

CANADA: STRENGTH IN EDUCATION, SKILLS AND RESEARCH

Most highly educated talent pool in the OECDMore than half of population aged 24-64 have a post-secondary level of education

Best availability of skilled labour in the G20More than 40,000 graduates/year from Science, Technology, Engineering, Math & Computer Science (STEM) programs

Strength in diversity1 in 5 Canadians speak one of 200 languages in addition to English or French.

Two women entrepreneurs for every three men (Global Entrepreneurship Monitor)

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WELL CAPITALIZED, WELL MANAGED AND WELL REGULATED

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• Canada’s five largest banks are among the world’s largest 55 banks by market capitalization (2016)

• Three of them – Royal Bank of Canada, Toronto-Dominion Bank and Scotiabank – are in the top 25.

CANADA’S FINANCIAL SERVICES SECTOR

Source: TFSA

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NORTH AMERICA’S LARGEST URBAN INNOVATION HUB

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CANADA’S FINTECH LANDSCAPE: A 5-YEAR ANALYSIS

Source: MaRS Discovery District

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MAP OF GLOBAL REGULATORY SANDBOXES

Source: Deloitte

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NORTH AMERICA’S LARGEST URBAN INNOVATION HUB

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Source: MaRS Discovery District

FINTECH INVESTMENTS BY PROVINCE (2015-16)

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Toronto is #2 in North America and #8 worldwide among

international financial centresThe Banker magazine, 2016

Toronto is head office to 5 of Canada’s largest banks (3 of 5 rank among the world’s largest by market capitalization)

Toronto is HQs for the vast majority of foreign banks operating in Canada, including four of the world’s largest banks

Foreign players are taking note

Goldman Sachsinvested in Toronto-based Financeit in 2015 & nanoPay in 2016

Japan’s NTT Data Corp ($14.6B revenue FY 2016) partnered with MaRS in Nov 2016 to obtain access to tech developed by Cdnstartups

80% OF FINTECH STARTUPS IN CANADA ARE BASED IN TORONTO

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1.5 million sq ft

200+ Tenants

100+ Startups

~6,000 people

Convening innovators with financial, academic & business communities

Collaboration with local & global networks

NORTH AMERICA’S LARGEST URBAN INNOVATION HUB

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BRIDGING THE GAP BETWEEN INVENTION AND ADOPTION

Work & Learning

Health Systems Innovations

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Health

Energy &Environment

Finance & Commerce

Fintech Regulatory Sandbox

Corporate Engagement Programs

Advanced EnergyCentre

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C$150 MILLION COMMITTED BY GOVERNMENT & CORPORATE PARTNERS

GEOFFREY HINTON,CHIEF SCIENTIFIC ADVISOR

UNIVERSITY OF TORONTO

GLOBAL PARTNERS INCLUDE:

GOOGLENVIDIATHOMSON REUTERSUBERDELOITTECHAN ZUCKERBERG INTIATIVE

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KEY THEMES:FINTECH DISRUPTION

PAYMENTS

HOW WILL CUSTOMER NEEDS AND BEHAVIOURS CHANGE IN AN INCREASINGLY CASHLESS PAYMENTS LANDSCAPE?

KEY DISRUPTIVE TRENDS: Mobile payments, streamlined payments, integrated billing and next generation security

HOW WILL THE EVOLUTION OF DECENTRALIZED OR NON-TRADITIONAL PAYMENT SCHEMES CHANGE THE ROLE OF FINANCIAL INSTITUTIONS?

KEY DISRUPTIVE TRENDS: Cryptographic protocols/emerging payment rails, P2P transfers and mobile money

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CANADIAN PAYMENT COMPANIES

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KEY THEMES:FINTECH DISRUPTION

INSURANCE

HOW WILL SEPARATING FORCES ACROSS THE VALUE CHAIN TRANSFORM THE INSURANCE INDUSTRY?

KEY DISRUPTIVE TRENDS: Disaggregated distribution, sharing economy, self-driving cars and third-party capital

HOW WILL THE CONNECTED WORLD IMPACT THE VALUE DELIVERED BY INSURANCE PROVIDERS?

KEY DISRUPTIVE TRENDS: Smarter & cheaper sensors, wearables, Internet-of-Things (IoT) and standardized platforms

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CANADIAN INSURANCE COMPANIES

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KEY THEMES:FINTECH DISRUPTION

DEPOSITS& LENDING

HOW WILL EMERGING ALTERNATIVE MODELS OF LENDING CHANGE THE MARKET DYNAMICS OF TRADITIONAL LENDERS?

KEY DISRUPTIVE TRENDS: P2P, lean/automated processes and alternative adjudication

WHAT WILL THE FUTURE ROLE OF FINANCIAL INSTITUTIONS BE IN RESPONSE TO CONTINUALLY SHIFTING CUSTOMER PREFERENCES?

KEY DISRUPTIVE TRENDS: Virtual banking 2.0+, banking as a platform and the evolution of mobile banking

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CANADIAN DEPOSITS & LENDING COMPANIES

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KEY THEMES:FINTECH DISRUPTION

CAPITAL RAISING

HOW WILL THE EVOLUTION OF DISTRIBUTED CAPITAL RAISING IMPACT THE ROLE OF TRADITIONAL INTERMEDIARIES?

KEY DISRUPTIVE TRENDS: Crowdfunding, empowered Angel investors and alternative adjudication

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CANADIAN CAPITAL RAISING COMPANIES

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KEY THEMES:FINTECH DISRUPTION

INVESTMENT MANAGEMENT

HOW WILL THE EMPOWERMENT OF INDIVIDUALS THROUGH AUTOMATED SYSTEMS AND SOCIAL NETWORKS TRANSFORM THE BUSINESS OF INVESTMENT MANAGEMENT?

KEY DISRUPTIVE TRENDS: Social trading, automated advice & wealth management and retail algorithmic trading

HOW WILL THE EXTERNALIZATION OF KEY PROCESSES TRANSFORM THE FINANCIAL ECOSYSTEM?

KEY DISRUPTIVE TRENDS: Advanced analytics, natural language, process-as-a-service and capability sharing

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CANADIAN INVESTMENT MANAGEMENT COMPANIES

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KEY THEMES:FINTECH DISRUPTION

MARKET PROVISIONING

HOW WILL SMARTER AND FASTER MACHINES TRANSFORM CAPITAL MARKETS?

KEY DISRUPTIVE TRENDS: Machine-accessible data, artificial intelligence/machine learning and big data

WHAT IMPACT WILL BETTER CONNECTED BUYERS AND SELLERS HAVE ON CAPITAL MARKETS?

KEY DISRUPTIVE TRENDS: Fixed income, funds, private equity, private company shares and commodities/derivative contracts

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CANADIAN MARKET PROVISIONING COMPANIES

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CANADA’S FINTECH PARTNERSHIPS PROGRESS

• Goldman Sachs invests in Financeit and Hubba• Power Financial invests in League, Wealthsimple and Borrowell• RBC partners with League to underwrite its new suite of insurance products• National Bank takes minority stake in robo-advisor Nest Wealth• CIBC partners with Borrowell to offer one-on-one lending to its customers• RBC opens AI-focused RBC Research Lab at MaRS• Sensibill partners with Scotiabank to launch its mobile receipt management solution• Mastercard makes strategic investment in Nymi• Thinking Capital partners with CIBC• Nanopay partners with Ingenico• Scotiabank partners and invests in Kabbage• CIBC opens digital innovation lab at MaRS• BMO, CIBC, National Bank of Canada, Sunlife Financial and TD Securities invests in $300M OMERS

Ventures Fund

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THANK YOU