The Major Trends in Canadian Financial Services

Claire Montrose

Hey folks, welcome back to Clear With Claire. If you’ve been hanging on since last episode—where we talked all about banks, credit unions, pension funds and all those essential but unsung heroes of Canadian finance—today’s a bit of a pivot. We're diving headfirst into the tsunami that is digital transformation and fintech, and honestly, it feels like the ground is still shifting under our feet as we try to keep up with these changes.

Claire Montrose

So, let’s start with what “fintech” actually means. If you haven’t already highlighted this in your CSC textbook, let me make it painfully clear: fintech refers to all those companies and innovations using computer technology to let us bank, borrow, invest, and even just move our money online. Think digital wallets, online lenders, and new, app-based financial planning tools. In other words, the stuff that lets you pay for a coffee before the barista’s even made awkward eye contact with you.

Claire Montrose

The reality in Canada—just like most of the developed world—is a huge shift away from traditional, face-to-face banking, towards a world where, well, there are barely any faces involved at all. You’ve probably used a neobank without even noticing: an online-only bank with no branches. Their edge? Lower fees, apps that actually work, and eye-watering efficiency. Digital wallets and mobile payments are surging, and you’ll see this referenced over and over in the exam questions. So, remember: these players are genuinely challenging brick-and-mortar banks by combining better tech with a better user experience.

Claire Montrose

But, and this is important, traditional banks are not sitting it out. From my consulting days working alongside some of the Big Five, it’s clear that banks are pouring resources into upgrading their digital backend. It’s not just about giving people a slicker app or a rainbow-coloured debit card. We’re talking about AI-driven analytics spotting fraud faster than the human eye, personalized recommendations on your spending habits, even automated compliance checks that make OSFI and CIRO happy. Case in point: both RBC and TD have really ramped up their AI game. RBC’s trading desks, for instance, use AI and co-located servers to shrink trading latency for institutional clients. Not exactly the kind of service Nana’s after, but crucial for Canada’s institutions.

Claire Montrose

And there’s a huge regulatory angle. With more Canadians jumping on digital-only banks, even the regulators are wrestling with how to supervise stuff like peer-to-peer lending, SaaS-based investment platforms, or new RegTech compliance tools. Back at my old regtech startup—yeah, picture a couple desks above a grimy ramen bar in Toronto—we were building systems to automate anti-money-laundering checks for fintech clients. The sheer hunger for that automation is real: nobody wants audit panic at 6pm on a Friday. Compliance has to actually work, even when it’s run by bots.

Claire Montrose

If you’re prepping for the exam, here’s the highlight reel: know the difference between a traditional bank and a fintech; understand digital banks, neobanks, digital wallets, and the role of SaaS and RegTech; and the regulatory headaches that come with automating what used to be paper-based or manual processes.

Claire Montrose

Alright, let’s keep going because fintech is just one piece of this mega-puzzle. There’s a ton to unpack about how all this digital wizardry is actually shaping the ways Canadians invest, save, and even retire, and that is absolutely where we’re headed next.

Claire Montrose

Okay, so I want to dig into robo-advisors and the big social and demographic undercurrents that are shaping financial services. If you’ve been tracking along with the CSC, you might’ve noticed how often these topics pop up—from robo-advisor definitions to how pension plans are evolving for Canadians across generations.

Claire Montrose

Let’s start with robo-advisors. These aren't just cute names for investment apps: they’re algorithm-driven platforms that came to Canada in a big way around 2014. The basic pitch? Cheap, automated, goal-based investment management, built almost entirely from exchange-traded funds. After you fill out an online questionnaire about your risk tolerance and goals, a computer builds your portfolio. Sometimes you get advisor support (on the phone or even via chat), but the big sell is efficiency, transparency, and, usually, much lower fees than traditional advisors. And, because portfolios are automatically rebalanced and tax loss harvesting tools are built in, a lot of Canadians—especially younger folks—find them attractive.

Claire Montrose

But there’s more to it: these platforms also had to adapt to Canadian regulation. Robo-advisors need to verify that the portfolio they generate is actually suitable for you. There’s always an advisor double-checking the computer’s work before hitting “go”—otherwise, you might end up in a retirement income fund at 25 or holding a 98% equity portfolio right before retirement. The compliance angle is big, and for your exam, it's important to know that suitability obligations and the “know your client” (KYC) rules are still crucial, even when the advisor is mostly an algorithm.

Claire Montrose

Here’s where it gets even more interesting—think of how all these shifts intersect with Canada’s aging population, millennials’ approach to investing, and the overall massive generational wealth transfer we’re about to see. Baby boomers—roughly 9.5 million Canadians—are moving into retirement, so there’s huge demand for retirement income and principal-protection type products (think fixed income, GICs, annuities, low-volatility funds), but also for products that blend sustainability and ESG goals.

Claire Montrose

On the flip side, millennials (who make up 27% of the population now) have higher mortgage and student debt loads and lower net worth than boomers at the same age. They’re also more likely to be digitally-native, comfortable with apps, and expecting transparency and immediate access when it comes to investments. Plus, ESG and value-aligned investing are a bigger focus.

Claire Montrose

In my own practice, I watched older retirees, frustrated with their bank’s endless forms, finally open a robo-advisor account for part of their portfolio just to see everything in one place. Meanwhile, younger clients wanted sustainable investing paired with a seamless digital experience—sometimes even using a robo for their RRSPs and a traditional advisor for bigger life events, like when they bought a house or started a pension plan. There’s been real growth in hybrid pension plans in Canada too, which try to blend the stability of defined benefit (DB) pension plans with the flexibility of defined contribution (DC) plans.

Claire Montrose

Your testable must-knows: definitions and features of robo-advisors, the distinction between DB (fixed benefit, risk on the employer) and DC (variable benefit, risk on the employee) pension plans, what a hybrid plan is, and why suitability—making sure a client’s investments are right for them—matters in a robo context. There are classic exam questions that love to ask about which plan puts risk on whom, or what the biggest factors are for suitability with an automated portfolio.

Claire Montrose

What’s changing fast is how all these shifts are driving demand for new investment products: everything from sustainable and ESG funds to digital-and-human hybrid advice models. Canada’s investment landscape is adapting—and so should your approach to studying!

Claire Montrose

Alright, final stretch for today. Let’s roll up our sleeves and wade into one of the trendiest—and, frankly, most exam-bait topics out there: cryptoassets, digital assets, and the regulatory scramble to keep up.

Claire Montrose

Cryptoassets—like bitcoin—are assets that exist only in digital form and run on a peer-to-peer network. The big “innovation” here is the blockchain: an open-source, decentralized public ledger where every transaction is permanently recorded, no editing allowed. The textbook does a nice job splitting “bitcoin the token” (what you buy, own, and maybe panic about at 2am) and “Bitcoin the protocol” (the whole blockchain network). Each user has a public key (kind of their address) and a private key (their secret password), and together, those let you store or send value without a central bank or government middleman.

Claire Montrose

Bitcoin isn’t just a “fiat” currency. There’s no government standing behind it, and it’s programmed to be deflationary—meaning the supply is capped (21 million coins total). That’s part of why prices are, well, bananas. As of early 2025, the market cap was around 2 trillion USD, but that’s after wild ups and downs. Investors get into bitcoin for three main reasons: as a medium of exchange (though nobody’s really buying coffee with bitcoin at your local Timmies), as a speculative store of value, and as a diversification play.

Claire Montrose

Where things get thorny—and where the exam will hit you—is the regulatory response. In Canada, CIRO, the CSA, and the OSC have all worked on frameworks around crypto trading platforms, custody, AML (anti-money laundering) rules, and investor protections. Regulators have been clear: crypto is not the same as fiat. It’s not legal tender, and the volatility risks are huge. Canadian guidance stresses defining terms like blockchain, distinguishing between public and private keys, and pointing out that while the crypto space is full of innovation, it’s also rife with investor risk.

Claire Montrose

I’ll never forget the flood of client emails back in my bank strategy days, when bitcoin first started showing up in Q1 statements, and everyone wanted to know if they should “put 5% in crypto.” My boring compliance answer never changed: don’t ignore it, but don’t lose your shirt either. The regulators’ main concern is protecting investors—making sure platforms have proper custodianship, sound disclosures, and checks against money laundering.

Claire Montrose

So, on your CSC, expect to get grilled on: what is a cryptoasset; what’s the difference between bitcoin and blockchain; how do private/public keys work; and, most importantly, how are regulators responding to this rapidly evolving landscape? Know that crypto’s disruption isn’t just about new payment tech. It’s also about how capital transfer, trading, and portfolio construction might get shaken up. But be ready for the exam to test you less on hype and more on your ability to distinguish risky from prudent—and regulated from not.

Claire Montrose

That wraps our whirlwind tour through the trends upending Canada’s financial services sector. If you made it this far, trust me—this is testable content and absolutely foundational knowledge for anyone walking into the CSC exam. I’ll be back soon with a fresh episode, so keep practicing those flashcards, check your acronyms (the examiners love ‘em), and—if you’re out there panic-cleaning before study group—just know you’re not alone. Talk soon!