Over the last few decades, Silicon Valley has been synonymous with technological innovation. Over its continuous evolution, it has also made some significant strides in the FinTech niche.
This makes a lot of sense as the area has the majority share of venture capital investment and leadership of global technology companies. While Silicon Valley has consistently produced winners, a large part of the driving force behind it has been foreign-born techies.
But recent changes in government policies and uncertainties have now made the future quite unpredictable. While industry giants and tech workers have been quick to protest, it’s still unclear as to how it will play out over the coming months.
As the FinTech by itself goes through a period of acceleration, tech companies in California and all around the United States have to get creative to maintain momentum.
So what are the options available to them?
For one, established FinTech companies and startups can always outsource non-critical operations offshore to Eastern Europe and Asia. Another option is to follow the likes of Amazon and Google by opening offices in countries like Canada where it will be easier to move foreign workers.
But that might not be feasible for FinTech startups just getting off the ground. This situation begs another solution which can be easily achieved and that’s near-shoring in Vancouver.
What makes Vancouver special?
Vancouver is a beautiful city that’s also a thriving tech hub. But for FinTech in particular, Vancouver is also better suited. According to a study conducted by Deloitte in collaboration with All Street Research, FinTech has been gaining considerable momentum recently and is expected to continue to grow rapidly.
This makes the chances of putting together a highly effective dedicated software development team in Canada much higher than other parts of the world. Furthermore, the talent is already located in the city to cater to a prospering FinTech scene.
Some FinTech companies to come out of Vancouver are as follows:
- Bench (online bookkeeping service)
- Canada Drives (helps secure the finances regardless of credit history)
- Grow (Canada’s leading online lending platform)
- InvestX (private equity marketplace for retail investors)
- Koho (aims to change banking in the country and offers a banking card, a web app, and a mobile app)
- MatchSpread (marketplace for Corporate Foreign Exchange)
- ModernAdvisor(next-generation financial advisor)
- Netcoins (Bitcoin ATM)
- nTrust (send or receive money instantly)
- PayByPhone (a division of London’s PayPoint)
- Payfirma (multichannel payment platform for businesses)
- PayHero (a dedicated to the financial empowerment of service industry workers)
- Payso (easy way to pay and collect money from family and friends)
- PayWith (payment solution that hopes to change the way merchants use loyalty and rewards)
- Trippeo (a simple expense management software )
- TIO Networks (a cloud based multi-channel bill payment processor)
- Trulioo(an online identity verification company)
- Trustatom ID (authentication service,)
- Voleo allows(enables the creation of an investment club with family and friends)
- Zafin (a provider of relationship banking software solutions)
Key Benefits of Near-Shoring to Vancouver
The exchange rate currently benefits U.S. companies, so it makes sense to take advantage of it without the risks associated with communication, contract management, travel, and cultural complexities that come with offshoring.
The near-shore model is also the middle ground between a full-scale offshore operation and keeping operations inshore. Vancouver also offers an optimal blend of operational efficiencies and cost savings.
Here are some more advantages that can be added to the list:
- Low travel expenses (Canada is right next-door)
- Lack of significant time zone differences
- Low attrition (as a result of the high standard of living, you won’t have to worry about workers jumping ship for a little bit of money)
- Lower transition costs (much easier to cross-train and keep costs down)
- Better contract management (with similar legal systems and tax regulations, it’s a lot easier to manage employees)
So whether FinTech companies in Silicon Valley want to completely move operations or near-shore some of them, Vancouver is much better suited than leading offshore destinations like India. As the industry is also one that’s highly regulated, keeping operations right next-door is the next best thing to having all employees in-house in California!