The great fintech debate: Will regulating financial upstarts ‘level the playing field,’ or stifle innovation?

, Bitcoin Tips

In Canada, the fintech sector is small relative to other countries, but it is growing rapidly, with one firm opening for business and another expanding in just the past couple of weeks.

In late March, Toronto-Dominion Bank chief executive Bharat Masrani stood in front of his bank’s shareholders and, for the second year in row, called on policymakers to regulate fintechs, the new financial technology firms springing up at breakneck pace and challenging big banks on their traditional turf.

“They are not — generally speaking — subject to the same regulatory rules as traditional banks,” Masrani said, warning, without offering specifics, that security breaches, service interruptions, and solvency issues have “plagued” a number of the upstart firms. 

Some fintech players viewed Masrani’s comments as an unnecessary attack on their businesses, and one that unfairly lumped together all non-bank providers offering financial products and services.

“It’s disappointing to see established incumbents responding to innovative challengers with such knee-jerk and closed-minded comments,” said Kevin Sandhu, chief executive of Vancouverbased consumer lender Grow.

He and other fintech players say they fear a push to regulate will stifle the very innovation through technology and computer-driven data mining that is bringing banking services to Canadians more quickly, and at a lower cost.


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