Why Frank McKenna And Alicia Ismach Say Contact Centre Industry Laid Groundwork For Region’s Fintech Sector
MONCTON – When Frank McKenna was premier of New Brunswick 30 years ago, he helped establish the contact centre industry here. Decades later, and now the deputy chair of TD Bank, McKenna was part of the team representing Nasdaq in its $2.75-billion (U.S.) acquisition of Newfoundland-based fintech company Verafin.
The growth of both sectors in Atlantic Canada are connected, says McKenna and Alicia Ismach, the entrepreneur-in-residence at Venn Innovation in Moncton.
In a recent interview on the Huddle “Home Office” podcast, Ismach said the region is now home to more than 100 fintech companies, and the Verafin deal puts Atlantic Canada’s financial technology (fintech) sector on the map globally.
Some of them may not subscribe to the fintech label, she said. But they have active “fintech plays,” and together they create a critical mass that would allow for a sectoral approach to growth that “can change completely how our region looks in the global map.”
Fintech today, she says, covers any technology that digitalize any aspect of financial services, not just banking and payments.
“You may not know it, but you have an amazing fintech sector here,” Alicia told Home Office host Mark Leger. “And it seems to happen because of a very specific advantage that you have in the region.”
PODCAST: Alicia Ismach On A $2.75-Billion Unicorn And Making Atlantic Canada A Fintech Powerhouse
That’s thanks to the presence of many back-end operations, as well as the contact centres of banks and insurance companies.
“It seems a lot of people exposed to this backend operations for the financial industry have started developing solutions that are relevant to improving or solving problems they saw on those operations,” she said. “So we have a really good number of fintech companies here in our region, coming from all aspects of the industry.”
Ismach said she realized the connection between the two industries when senior executives at large financial institutions in Toronto brought up that they saw the proliferation of back-end operations in Atlantic Canada as an advantage.
“Because many places where people are developing financial technologies, they come from the front end of the middleware. They understand better UX/UI, and they understand better consumer needs,” she said.
“But they have a lack of understanding of the back end of the operations, of the part that … didn’t have enough innovation yet, and they’re expecting more to come from that end and to come with solutions. Our region is doing that. Most of the companies I meet are actually improving or working on back-end systems for the financial industry.”
While places like Silicon Valley are great at innovating consumer-facing solutions, she says the B2B solutions focused on improving back-end operations “is exactly where we have a unique advantage that we can compete better on a global [scale].”
PODCAST: A Conversation With Frank McKenna From His Home Office In Cap-Pelé
Building an evolving financial services industry and digital economy in the region was what McKenna and others who helped build the contact centre industry here envisioned.
McKenna spoke to Huddle recently about the new client advice centre TD Insurance is opening in Dieppe, with 100 people set to be hired by January next year and “hundreds” more to be hired remotely over time.
He was premier when TD opened its first contact centre in New Brunswick in 1994.
He indicates that it’s not surprising the fintech industry has been growing alongside the contact centre industry in New Brunswick and Atlantic Canada.
“What we set out to create 25 years ago was a digital economy, and there are various pieces to the digital economy,” he said. “It could be the work that’s being done at the [TD] insurance centre in Saint John or the Financial Operations centre [in Dieppe]. It can also be highly sophisticated computer science jobs.”
“We’ve got literally thousands of those in New Brunswick, and companies like IBM, CGI and Siemens – companies that are using digital technology to do their work from here,” he said, adding that there are also tech companies that started and grew in Atlantic Canada like Verafin, Radian6 and Q1 Labs.
Building A Strong Fintech Industry
Ismach’s entrepreneurial journey has taken her from Tel Aviv, Israel to Moncton. In Tel Aviv, Ismach was part of the fintech sector at a time when it was just emerging. It would later become a powerhouse, and she’s been making the case for the industry’s potential in Atlantic Canada, too.
“Tel Aviv is the [centre] of the technology industry in Israel. Now what’s interesting for our region is that the city is the size, in terms of population, of Halifax,” says Alicia. “When I see Tel Aviv as an epicentre of technology…Atlantic Canada has no less potential in terms of becoming a power centre in technology.”
In Atlantic Canada, she says immigration will be a critical engine to the sector’s growth here as it has been in the U.S., Israel and other places.
Today, some of the region’s most promising fintech companies are already founded by immigrants. One of them is Oliver POS in Newfoundland, which raised a more than $3-million round from European investors during a pandemic. Its platform, which helps small businesses sync their online and physical stores, including the payment systems, is already being sold globally.
“But one of the things we still lack is companies recruiting more newcomers for jobs in their companies in the tech sector,” she said.
She says immigrants might not just have the technical know-how, but they also have knowledge and familiarity with foreign markets. So companies should make the effort to involve more of them in their work.
Ismach adds that it’s equally important that the fintech companies work together as a sector.
She says companies like Four Eyes Financial in Saint John or SnapAP in Moncton are also showing success and growth. There are many more promising companies in the region, but they’re not yet working as a sector. Being more closely connected would allow them to exchange knowledge, networks, and grow more significantly and efficiently, she added.
“Looking at the companies here, I know that many of them have the ability to help others around them without competing with each other. So that ability is lost when they don’t really know that the others around them are in the relevant sector or targeting the same industry,” she said.
“Companies here tend to be smaller and earlier stage, not because they lack the ability to grow farther or to be more significant in a global stage, it’s more because they have a longer learning curve, they need to discover everything on their own one by one…While that knowledge is actually in the region somewhere else.”
It’s important that the whole region collaborates, she added, because dividing the fintech sector up by province “will not do a good service to the companies.”
She says if the sector comes together regionally the way the Atlantic Canadian provinces teamed up on a travel bubble during the Covid-19 pandemic, “no one can stop us. Atlantic Canada can be one of the top fintech sectors in the world.”
Inda Intiar is a reporter for Huddle. Send her story suggestions: [email protected]