Earlier this month DPL and IJWD managing director, Drew Dorweiler, co-authored an article about Quebec’s FinTech industry. We’ve decided to publish it here on this blog. The piece was written in collaboration with digital marketing and anti-fraud professional, Maranda Moses, who is a consultant with DPL. In a nutshell, the article highlights why Quebec’s FinTech success is really dependent on the aggressive pursuit of cross-border opportunities, particularly the US, the EU and Asia markets. The article gives several strategies on how to make it happen.
This article originally appeared on Tuesday, February 14, 2017 via the website Quotidien Économique Web.
Here’s our bold prediction: If Quebec FinTech firms are strategically savvy, they could be headed for record success in 2017 and beyond. The following three influential factors support our statement.
The first factor is Prime Minister Justin Trudeau and his appetite to promote Canada as a welcoming trade partner. The Trudeau government is shortly expected to ease the path for more inbound foreign investment to Canada. Notably, the Prime Minister was on a travelling blitz during late 2016 meeting with global leaders and spreading the message that Canada is “wide open” for business. Where former Prime Minister Stephen Harper’s government blocked some Asian foreign investors from acquiring control of certain Canadian corporations, the current Canadian government is poised to welcome investment from foreign venture capitalists, private equity firms and corporations who perceive Canada as a lucrative target for deal-flow opportunities.
Second, there are myriad international high net-worth institutions and investment groups who are eager to work with new entrepreneurs and diverse talent, and back innovative products developed in knowledge-based industries such as FinTech. Numerous wealth funds, private equity groups and financial institutions in the United States, the United Kingdom, Germany and France, the Middle East, as well as China, Hong Kong and Singapore possess significant “dry powder” and an appetite to invest in Canadian technology.
The third factor involves politics. Currently, the US is in global-trade limbo with several countries. While January 2017 has already demonstrated that relations between China and the new American political administration are off to a rocky start, this does not mean that Canadian entrepreneurs must wait for the two largest economies in the world to resolve their differences in order to embark on projects of their own. This is the perfect time for Canadian, and more specifically Quebec, FinTech firms to extend their reach into the Asia-Pacific market and establish mutually-beneficial agreements within this regional economy.
Whether one agrees or disagrees with the current US administration’s approach is not the point. The opportunity is that Canada is perceived as a stable and trusted market by other nations, which is why Asia-Pacific countries have focused their expansion strategies on Canada as an ideal market for investing in and acquiring new businesses. Quebec FinTech firms should be positioning themselves to take advantage of Canada’s international reputation and feature our province as a hub for new investment opportunities.
This past January, we attended the 10th Annual Asian Financial Forum (AFF) in Hong Kong (as part of a 60-plus member Canadian delegation). This two-day conference featured over 3,000 financial experts, business leaders and government representatives who converged to listen to internationally prominent thought-leaders and generate deal flow. We were also invited to attend the FinTech O2O International FinTech Pitch Evening at Cyberport, a respected Hong Kong-based creative digital community. Aside from being prominently featured at the Cyberport event, FinTech was certainly on the minds of people attending the AFF.
Canada is well-represented and highly respected in the Hong Kong business community, furthering our country’s reputation as a major participant in the FinTech market.
While all of this exposure is valuable promotion for the Canadian FinTech sector, it highlights the strong need for Quebec FinTech firms to further heighten their national and global presence. Critically, Quebec FinTech leaders cannot afford to fall behind their competition from other regions.
It’s no secret that Quebec’s economic status has been quite sluggish for too long; our province has suffered from poor job growth and a brain drain that significantly affects our talent pool.
A large number of businesses have either left Quebec or shut down entirely. This has left the business opportunities within Quebec anemic. Moreover, the number of service providers in varying industries is saturated as they are competing for a shrinking pool of clients. In order for FinTech firms (or firms in similar knowledge-based businesses) in Quebec to succeed, their strategy must include cross-border expansion to global markets; the boundaries between Canada and Asia are rapidly growing closer.
Fundamentally, Quebec FinTech companies will need to do three key things to distinguish themselves: 1) think globally, 2) stay ahead of the curve, and 3) adopt a dynamic strategy.
To read the rest of this article, go directly to the publication Quotidien Économique Web. Also, don’t forget to leave your comments below and/or on the Quotidien Économique Web site.