For those unfamiliar with the term, Fintech is the new age combination of two fields – Finance and Technology – to create sustainable products in the finance sector.
One popular example is of Bitcoin, whose market value five years ago was $0.30 per piece, rising to $700 last year, and is currently at approx. $11,000 apiece today.
What is it about such products that is causing a ruckus? Is it a bubble, a fad, or a step towards the future? Since we live in a major financial hub of the world, I would like to use this opportunity to discuss the nature of Toronto’s financial landscape as you will inevitably have a role to play in the future.
The prevalence of Fintech companies in Toronto have only recently emerged within the last five years and branch across various divisions of the financial landscape – real estate, aviation, consumer services and energy being the main sectors.
If you think about it, we’ve come a long way.
Just within the span of 30 years, we’ve gone from dial-up and modems to biometric encryptions and touch screens.
In the early 1990s, the focus on growth stemmed from developments using the Internet (i.e. various software that can be incorporated into business operations).
From 2000 onwards, there was a shift in technology which focused on the sanctity of the capital markets using complex financial systems, new derivative products and efficient banking practises.
However, after the financial crisis of 2008, it is arguably said that the focus on growth shifted toward Big Data and sustainable technology.
So, as people who are at the forefront of new financial education, what is your opinion on the marketplace?
We, at U of T, have a great advantage in that we can use knowledge and theory learned from class and apply it to the prevalent businesses in Toronto. For example, it’s no secret that Toronto’s housing market has hit a dip, that foreign investments are trickling in, and that TSX movements are beginning to slow.
However, even with the several hundreds of start-ups aimed at incorporating new technology, Toronto is still not as innovative as its capacity allows.
Where do you think the focus is going now?
Many scholars believe that developments in technology will inevitably wipe out thousands of jobs and that Fintech is a giant disruptor of financial services.
But how close are we to reaching a “perfectly efficient” (for you Eco-geeks out there) economy? And what is Toronto’s competitive advantage?
I personally believe that digital infrastructure is Toronto’s strength, and that interactivity and innovation are the pillars to kick-starting the next generation movements in Finance.
In order to learn more about our city’s changing financial landscape, check out the links below.
Good luck on exams and Happy Holidays!
- Digital Platforms: Toronto’s Competitive Advantage (TFSA)
- The Changing Landscape for Canadian Financial Services (McKinsey & Co.)
*Aditi will be writing and updating “the First 365” series for 2017-18. These posts will focus on Aditi’s experiences in the work place after graduation.