Paris FinTech Forum: diving into an in-demand market

During the 2018 Paris FinTech Forum, a delegation of about twenty Montréal businesses related to the FinTech sector flew to the French capital as part of a trade mission led by our team of Acclr international trade experts, in collaboration with Finance Montréal. Here is an overview of this mission with two SMEs, Exagens and Squares Union, and one institution, the Autorité des marchés financiers (AMF).

FinTech, a growing market

Finance Montréal defines FinTech as a sector of the financial industry that uses new technologies and artificial intelligence to improve the delivery of financial services. These solutions are typically developed by start-up businesses as well as more mature businesses.

A market on a roll

• It is a dynamic, booming sector: the financing of FinTech is estimated at more than CAD 26.4 billion worldwide for 2015, a 66% increase from 2014.
• According to the AMF, investments in this sector tripled in Canada between 2014 and 2015, going from $225 million to $695 million;^[1]and doubled in Quebec, going from $46 million in 2014 to $106 million in 2015.^[1]

Business needs and an unprecedented mission

“This first international collaboration with Finance Montréal strengthened Montréal as a FinTech hub and helped the participating businesses find interesting networking and business opportunities.” – Erandi Motte Cortés, Director of Market and Entrepreneurship Development at the Chamber of Commerce of Metropolitan Montreal

This mission was born from businesses’ need to tackle the European market and from Finance Montréal’s desire to promote Quebec FinTech. For the organization, the city has the potential to become the Canadian and global FinTech capital by using its growing financial ecosystem, its universities that offer a highly skilled finance and technology labour force, and its incubators, accelerators and other programs to maximize investments and develop the ecosystem.

The 2018 Paris FinTech Forum proved to be a top event with rich panel discussions. More than 150 industry leaders travelled from around the world to share their expertise. Its activities promoted discussions with key figures in the industry, and the event was a springboard to the European market, whose investments exploded, with $2 billion invested in 2017’s second quarter compared to the $880 million in the first quarter. “It was the ideal occasion to put Quebec businesses on the map,” says Erandi.

What participants took away from the 2018 Paris FinTech Forum

Two SMEs, Exagens and Squares Union, and one organization, the Autorité des marchés financiers (AMF), share their experiences..

Exagens: banks looking to connect with their clients

“We felt that our product has a place where it belongs.”

This is the opinion of the Executive Director of Financial Service Markets at Exagens, a start-up that offers a white label solution (products that banks can integrate on their platform and market under their own brand). This solution allows financial organizations to refocus their client relations through their digital channels. “The French market’s defining feature is that banks each have a digital entity and some are even completely digital, without a point of service. These institutions are concerned with recreating a link to their clients and distinguishing themselves thanks to a close relationship. That is precisely what we are working on since our product allows us to get to know people and adapt our offer to what is happening in their lives,” explains Éric. The trade mission enabled the start-up to perform a quick market study, meet three potential clients, experts and future partners as well as Swave, an accelerator. The company even returned to France recently to continue the discussions and make new contacts.

Squares Union: a springboard for testing your offer

Squares Union offers a different experience, a service for transferring money online to Western and Central Africa. From a growth perspective, the business wanted to expand its horizon by preparing for a potential entry into the European market, as explained by its president, Stephan Dowouo: “For us, the best way to achieve this goal is to attend this international forum with all of the sector’s major players and the potential partners we need to carry out our project.” The result? “We were able to meet three renowned banks, two payment processing companies and three potential partners to expand our services to about 100 countries. Right now, we are in discussion with an investment fund and another venture capital business that we met in Paris for the fundraiser… I would say we’ve exceeded our expectations!” says Stephan.

Squares Union and Exagens could both have the opportunity to participate in the 2019 Paris FinTech Forum as exhibitors instead of visitors. This participation will be confirmed according to the results of the next few months following the trade mission.

The AMF: open banking and the API economy

“FinTech is a booming sector and the AMF, a leader of the Quebec financial industry, thinks it essential to stay up-to-date with trends while being close to international businesses and industry partners,” explains Moad Fahmi, FinTech director and innovator. By participating in this mission, the organization discussed the stakes and trends of digital transformation with Montréal and French FinTech businesses and also noticed how important open data is on that side of the Atlantic. Open banking (allowing third parties to connect to a bank’s services in a simple, standardized way to develop their own applications) and the API economy that results from it (since this is the system that makes open banking work) are the primary concerns of financial institutions. Europe is the precursor of this trend, strengthened by the directive on the subject that was voted in 2015. “It’s like a laboratory for the rest of the world,” says Moad.

Photo credit : Paris FinTech Forum 2018, © Olivier Prudhomme.

^[1] Rapport annuel sur les institutions financières 2016, Autorité des marchés financiers, p.14.