Notes from the Floor: Digital Finance Toronto 2015

- October 4th, 2015

The Investing News Network attended Digital Finance Toronto to hear about the latest developments in the FinTech market.

Digital finance, or FinTech, is a rapidly expanding industry. In 2014, global investments in the sector hit $12 billion, and that figure is expected to be even higher in 2015. FinTech companies are disrupting traditional financial services at an unprecedented rate, transforming the way people think about banking.
The Digital Finance Institute brought together many thought leaders in this field during its Toronto conference, held on September 30 at St. James Cathedral Centre. The day-long event offered the opportunity to debate, discuss and network with players in the industry.

FinTech and payments

The event opened with a welcome address from Christine Duhaime, co-founder and executive director of the Digital Finance Institute, and Kris Hansen, managing director and CEO of Axxiome and CEO of Digital Payment Partners. Together, they introduced what would turn out to be a dynamic and educational conference.
The opening keynote presentation followed. Titled “The Payment of Everything — Intersection of Payments & The Internet of Everything — Opportunities in FinTech & Growing Business Revenues,” it saw Gino Zucca speak about the intersection between the Internet of Things (IoT), the Internet of Everything (IoE) and FinTech payment systems. Zucca is currently director of IoE/IoT strategy and market development at Cisco (NASDAQ:CSCO).
A panel called “Frontiers in FinTech — Payments, Blockchain, Bitcoin, Banking the Unbanked, Regulation” followed the keynote address. Moderated by Duhaime, this panel brought together Grant Fondo, senior partner at Goodwin Procter; Sarah Gordon, vice president at the Centre for Financial Services Innovation; Carol Caruso, senior vice president of Accion; and Jo Lang, director of research and platform for R3.

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Lunch recap

Discussion over lunch, which was sponsored by Quadriga FinTech Solutions and Thinking Capital, ran a gamut of topics. The morning’s panels were fresh in everyone’s minds, driving participants to think about the many ways that traditional finance is changing due to disruptive technologies. There was brainstorming about the place that brick-and-mortar banks will ultimately occupy in a digitized world, the ways that mobile phones can transform banking in third-world countries and the ways in which blockchain technology is poised to transform conventional financial institutions.

Finance and artificial intelligence

These interesting conversations paved the way for the first afternoon panel, “Artificial Intelligence & Robotics in Banking, Trading & E-Commerce.” Alan Lyse, managing director at Ryerson Solutions, moderated the panel, which included Brady Cassidy, director of growth at Granify; Jimmy Dinh, executive director of the Alternative Solutions Group at CIBC World Markets; and Ken McCord, co-founder, president and portfolio manager at KFL Capital Management.  
For audience members whose expertise was in finance rather than technology, this panel provided insight into how the digital side of FinTech works. McCord spoke about how relying on AI has changed his portfolio management techniques, noting that data analysts typically shy away from examining the stock market because the information is temporally located and easily mutable.
However, KFL has found ways of understanding the stock market using AI that produces a 54-percent success rate over the markets. Although this edge might seem small, it’s actually quite significant. For comparison’s sake, that’s like the house odds on a casino roulette table — normally about 53 percent.
Despite working with this AI for a number of years, McCord has yet to figure out how it “thinks.”
Granify’s Cassidy also had fascinating insights into the ways that AI is shifting consumer experiences. Computers’ ability to track and intelligently analyze consumer data is enormous — indeed, he suggested that the major limiting boundary in his work is not the technology itself, but the fear of coming off as too “creepy” to consumers. He noted that there is a fine line between providing helpful information and discounts to a consumer based upon their habits, and revealing the radical degree of information that companies collect, store and analyze.
Dinh spoke about this “creepiness” factor in a financial context. While consumers are happy to share data to get discounts and enhanced customer service in some contexts (take Amazon (NASDAQ:AMZN), for example), they are more reluctant to do so in a financial context. Banks have to tread this line carefully, lest customers recoil from their attempts to offer more targeted service.
One insightful audience member commented that the difference between these two experiences (online shopping vs. online banking) can be distilled down to a power differential. In one case, the consumer has the ability to walk away if they feel uncomfortable, or wish to seek a better deal elsewhere. In a banking context, however, there is a fear that some users might be punished for their behaviors.

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Closing messages

The last panel of the afternoon offered advice on financing FinTech startups. The Canadian FinTech Awards were then presented, with Payfirma walking away with the FinTech Firm of the Year award.
The conference wrapped up with a presentation from Sam Maule, chief inspirational officer at the Digital Finance Institute and consulting manager at Carlisle and Gallagher Consulting Group. Maule couldn’t be physically present at the conference due to a last-minute conflict. However, over audio he presented a moving reflection on the ways that FinTech can work to transform the world. Drawing from his personal experience of being in Istanbul and seeing a young, motherless girl sitting out in the cold, he drew a connection to the potential of digital finance to help mitigate the global refugee crises. He offered the audience the acronym GOYA, taken from his wife’s advice to him. It stands for “get off your ass” and do something.
His presentation brought home the multitude of ways that digital finance impacts the world, and highlighted that although the industry is nascent, it is quickly becoming important. With the right investment, it has the power to radically transform the ways in which finance works throughout and within the world.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.

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