A new report forecasts that financial services from non-financial companies will see annual growth of more than 42% in 2022 and steady growth through to 2029
FinTechs and ecommerce firms are among those set to pose a greater challenge to Canada’s traditional financial services sector throughout this decade.
A new report forecasts that the ‘embedded finance’ industry will see growth of 42.5% on an annual basis to reach US$4.7 billion (around C$6 billion) in 2021, followed by steady growth - CAGR of 25.2% - to almost US$16 billion (C$20.5 billion) by 2029.
The Research and Markets report highlights that FinTech lenders and the InsurTech industry are raising funds to boost their growth and distribution networks in Canada.
This includes partnering with businesses across industry verticals and mergers and acquisitions among market players to gain a competitive advantage, particularly for the embedded insurance industry.
For embedded lenders, the focus is on introducing innovative offerings and the latest technologies to drive further market growth.
Ecommerce lenders
SMEs who may depend on informal sources of financing and loans and FinTechs have an opportunity to fill the gap.
For example, Shopify is offering its Canadian merchants funding through its Shopify Capital solution. The report expects that more ecommerce platforms will follow.
Embedded payments solutions are also projected to see growth with global market players expected to partner with Canadian firms.
