Episode summary
Fintech Takes x C&R presents: The Business of Lending, Seen From Canada
Fintech Takes
· · 51 min · Hosts: Alex Johnson · Guests: Tal Schwartz
Summary
The conversation argues that Canadian lending looks structurally similar to the U.S., but with a much more concentrated banking system and a meaningful lag in product innovation. Tal Schwartz says the big five or six banks control the vast majority of financial assets, while non-bank lenders concentrate in areas banks avoid, including small business lending, buy now pay later, and non-prime consumer credit. He also says Canada tends to trail the U.S. by 5-8 years in fintech product development, which gives both founders and regulators time to learn from what has already worked elsewhere.
The episode also focuses on policy changes that are reshaping competition. Tal describes open banking as finally moving from promise to reality in Canada, while warning that the new APR cap is a blunt instrument that may push some borrowers toward unregulated channels rather than solve affordability problems. On data access, he says cash flow underwriting is already common among non-bank lenders and is becoming more relevant for banks as open banking infrastructure improves.
Later, the discussion turns to investing in lending businesses and the growing role of AI. Tal says lending is capital-intensive, hard to scale, and easy to misread because weak underwriting can look like product-market fit. He sees AI as a tailwind for underwriting, fraud detection, servicing, and collections, especially in post-origination workflows that lenders have historically underinvested in.
Key takeaways
- Tal Schwartz says Canada’s big five or six banks hold the vast majority of financial assets, leaving non-bank lenders to serve riskier or less attractive credit categories.
- Tal estimates Canada is 5-8 years behind the U.S. in fintech product innovation, but says that delay helps both companies and regulators learn from prior experiments.
- Tal says Canada’s APR cap may reduce access to credit rather than reprice risk, potentially pushing some borrowers into unregulated channels.
- Tal says cash flow underwriting is already standard for many non-bank lenders in Canada and is increasingly being adopted by banks as open banking matures.
- Tal says AI should improve lending economics in underwriting, fraud, servicing, and collections, while making some point solutions obsolete.
Notable quotes
“Canada is somewhere between like five to eight years behind”
“the vast majority like like like 90% plus of financial assets uh go through those institutions”
“it is such a right area for disruption and there are so many you know, human inefficiencies in servicing and collection that can be deeply automated”
“Canada has probably one extra, like, you know, fun, uh, spice in there, which is like French language”
How the episode opens
This episode is brought to you by CNR software. More than just debt collection, CNR sets the global standard for AI native humanized credit management. They simplify the complex with technology built for modern financial services delivering end-to-end credit risk life cycle support powered by automated workflows, AI native intelligence, and real-time data-driven decisioning.
Learn more at crsoftware.com. Hello, and welcome back to our podcast series Collections Conversations, sponsored by our friends at CNR software. Our series continues its world tour, but now we come closer to home, to a country that I have spent quite a bit of time thinking about and writing about recently.
And now I get to podcast about it, Canada. Our friends to the north, similar in many ways, but also different in ways that are both important and underappreciated. To explore those similarities and differences, I was thrilled to be joined for this episode by Tal Schwartz, general partner at North Exit Ventures and author of the absolutely wonderful Canadian Fintech newsletter, which if you haven't subscribed, go do that immediately.
I've known Tal for a while, but I've never podcasted with him, which means I've never had the chance to ask him questions publicly, like how does the Canadian lending ecosystem differ from the US ecosystem? And how do those differences inform the way that Canadian Fintech lenders attack the market? What are the biggest regulatory forces reshaping the Canadian lending ecosystem?
And can I apologize one more time for making fun of Canada's progress on open banking? What does Tal look for when investing in lending companies, and how has AI changed how he evaluates those opportunities? And why is the post-origination side of the lending life cycle such a big and underappreciated opportunity?
Well, now I have asked him those questions and many more, and you are about to hear the answers.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- canadian lending market
- interest rate cap
- open banking
- cash flow underwriting
- ai in servicing and collections
Companies and tickers mentioned
- North Exit Ventures
- C&R Software
Watch the episode
Watch “Fintech Takes x C&R presents: The Business of Lending, Seen From Canada” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Fintech Takes, this episode and its artwork belong to Alex Johnson. Octagon is not affiliated with the show; this page is an independent summary.
