OCE teams with Toronto's financial services firms to boost sector's size and influence

Toronto's financial services sector is tapping into Ontario's high-tech expertise to address growing challenges and gain competitive advantage. The Ontario Centres of Excellence (OCE) and Toronto Financial Services Alliance (TFSA) have entered a collaborative agreement that will see financial firms partner with academic-based researchers and tech companies to develop common intellectual property (IP) and new spin-offs.

Toronto's financial sector is second in size only to New York in North America and is ranked sixth largest globally. It has grown by 34% since 2002 and supports more than 350,000 jobs directly or indirectly in the Greater Toronto Area. Firms hope that technology-based products and services could enhance their growth and increase the number of companies in the region, expanding the sector's influence. The sector includes banks, insurance firms and mutual and pension funds.

Some of the key areas where the sector is seeking technological solutions are cyber security, fraud protection, managing big data and data analytics.

"It's a marriage made in technological heaven … Our companies are tough competitors but they recognize that collaboration is in their best interests," says Janet Ecker, TFSA's president and CEO. "Financial institutions are facing significant, often disruptive challenges in the technology field ... We need the best solutions to be able to build a bigger and better global financial centre in Toronto and technology solutions are definitely part of this."

In addition to collaboration, the agreement includes a provision to encourage networking, with an initial partnering forum slated for next month to focus on the areas where financial institutions require technological assistance and come up with a handful actionable focus areas. The forum will also link financial institutions with researchers and small- and medium-sized enterprises (SMEs).

"SMEs can use banks as their first customers. The whole point is to help banks and other financial institutions grow and build a high-tech sector around financial services with outcomes for SMEs and university and college spin-offs," says Dr Tom Corr, OCE's president and CEO. "A key focus of the collaboration will be common IP which typically applies to larger banks that will come together with a common need.

Corr describes the OCE's role as an honest broker, helping to match needs with technology solutions through common IP or directing supplier firms to its suite of programs designed to assist in company creation and commercialization.

One firm cited by both Corr and Ecker is Nymi, which has developed sensor-based devices that use biometric authentication technology for user authentication instead of PIN numbers. The Toronto-based firm already counts RBC and MasterCard as clients and is looking to expand throughout the financial services sector.

Another Toronto-based company — Prism Valuation — has developed sophisticated algorithms and modelling techniques to be used for product evaluations and risk analysis.

"Financial services is a pretty broad area. Computer sciences will be a major focus (but) larger projects may also have a social sciences component, especially in the medical area," says Corr, adding that common IP development is OCE's preferred mode of collaboration. "Common IP is up to the companies and academic institutions., developed by an SME with research support from universities. The SMEs could own it and exploit it."

Toronto's financial services sector accounts for 13.8% of the city's economy, second only to manufacturing and its concentration of employment is higher than both New York and London. Nearly 80% of employees hold post-secondary degrees.

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