A Dynamic Fintech Ecosystem
Location, tech talent, and competitive business environment: Toronto has all the ingredients to create a world-class Fintech cluster.
Companies whose technologies support the financial services sector have found an ideal North American location in Toronto. More than 13,000 Tech companies in the Toronto region, from startups to global technology leaders, deliver hardware, software, and communications services to the North American and global financial services industry.
A recent Deloitte report ranked Canada has the 4th largest cybersecurity hub in terms of deal flow with Ontario leading the country.
Ontario is the second largest
IT cluster in North America.
Located just over an hour by road from the U.S. border and by air from New York, Boston and other major centres on the continent, Toronto has unlimited access to the world’s largest economy and to many of the world’s leading financial institutions.
As the capital of Canada’s financial services industry, Toronto is the headquarters for:
- 2 of the world’s largest life insurers;
- 3 of the world’s top 25 banks;
- 123 financial securities firms;
- 3 of the top 60 global pension funds;
- 9 of Canada’s top 10 mutual fund companies;
- 3rd largest equity exchange (TSX) in North America and the 7th in the world.
The Toronto region is the Canadian headquarters for some of the world’s leading wireless and telecom companies, including Cisco, Ericsson and Alcatel, and for world-leading software and data analytics companies such as HP, IBM and Microsoft.
Together, these companies contribute to Ontario’s nation-leading ICT sector, which accounts for 65% of the sector’s R&D and 66% of its exports in Canada.
With 50% of the country’s approximate 60,000 Fintech employees, the Toronto region offers one of the most highly educated workforces in the developed world.
While more than 80% of Toronto’s financial services workers have post-secondary degrees and accreditations, the city’s 61 technology related programs train more than 5,000 graduates a year. These programs foster many start-ups. For example, in 2014/2015, the incubators and accelerators at the University of Toronto worked with 226 student-led start-up teams and produced 79 registered companies, the most in the country.
Toronto’s talent pipeline is continually replenished by Ontario’s 44 colleges and universities that produce approximately 38,000 skilled graduates in science, technology, engineering and mathematics each year. They also offer more than 200 cooperative education programs in ICT fields, including the University of Waterloo’s program, the largest in the world, involving 19,000 students and 6,300 employers.
As a competitive location for conducting business, KPMG ranks Toronto ahead of New York, Chicago, London and Tokyo.
Fintech companies doing business in Toronto benefit from one of the lowest software development costs in the industrialized world. Running a software development centre in Toronto is much more affordable than in London and New York City which is one of the many reasons why the Canadian software industry has grown 23% from 2009 to 2014.
Based on the combined costs of labour, utilities, telecommunications and property, the cost of operating a data centre is also more affordable in Toronto than other jurisdictions.
Toronto’s Fintech sector can also take advantage of a broadly based system of R&D tax credits from the federal and provincial governments. These can reduce the gross cost of C$100 in R&D to C$42 to C$54 depending on the size and type of company.
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This report analyzes the fintech ecosystem that continues to develop within the Toronto region. It also explores emerging trends in the sector and the impact of the existing regulatory and policy environment – and makes recommendations for how the Toronto region can continue to establish itself as a global fintech leader.View report