Last week’s National Post featured an article, written by financial columnist Barbara Schecter, that included Merchant Advance Capital in an insightful discussion on the merits of regulatory change in the fintech industry. Prompted by comments made by TD Bank CEO Bharat Masrani at a shareholders’ meeting – in which he warned, without offering specifics, that security breaches, service interruptions, and solvency issues have “plagued” a number of fintech firms – members of the fintech community have rallied to defend their practices. We at Merchant have refrained from comment on this issue until now, but are pleased to have been included in Schecter’s commentary on the vital question of regulation in the emergent fintech space. Schecter’s article is linked below:
Schecter notes that it would be “extremely unlikely” for fintech firms to move past the initial growth phase of the startup lifecycle if subject to the regulatory strictures currently in place around traditional lending and banking institutions.
The future of banking may depend on merging cultures of innovation with large-scale customer bases and the availability of major bank capital to drive business forward. Fintech startups will mature and begin to require greater resources, while major banks will need the injection of new processes and systems to handle an increasingly agile marketplace. Fittingly, Schecter writes, “fintech players acknowledge the differences in regulation, and some say they’re open to talks with policymakers and regulators about what type of oversight might make sense in the future.”