Hiring a lawyer is critical for business viability in fintech “more than any other innovation vertical.” Somebody has to be paying close attention to the rules, otherwise a great product and team can’t approach the marketplace.
Why Fintech Runs Into the Rules Early
Most software startups can launch first and sort out the fine print later. Fintech companies usually can’t. The moment a product holds customer money, moves payments, lends, gives investment advice or raises capital from the public, it’s doing something that’s licensed and supervised.
In Canada, that oversight is split. Securities are regulated province by province, while banking and much of payments fall under federal bodies. A startup offering an investing app, a lending product and a payment feature can end up dealing with several regulators at once, each with its own rules on registration, disclosure, privacy and anti-money laundering.
That’s why getting legal advice early matters so much in this sector. A product built without those rules in mind can need expensive redesign, or can be blocked from launching at all, no matter how good the team or the technology.
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Adam Nanjee, Head of Financial Technology at MaRS Discovery District, says starting early with legal expertise can help a fintech startup develop locally and then scale internationally.
Fintech at MaRS
Nanjee came to MaRS to build its fintech practice from the start. When the Toronto innovation hub launched its FinTech Cluster in February 2015, it named him to lead it. He had previously been Vice President of Business Development in Emerging Payments at MasterCard Canada.
The cluster was set up to bring startups and the financial services industry together, offering founders access to investment, product feedback, sales opportunities and business advice from industry experts. For a fintech startup, those connections often matter as much as funding: banks and insurers are both potential customers and the companies that know the regulatory terrain best.
Regulators Opened Their Doors
Within months of this interview, Canadian regulators began offering fintech companies a more direct way in. The Ontario Securities Commission created OSC LaunchPad in October 2016, which Investment Executive described as the first dedicated fintech unit at a Canadian regulator. It’s still running today as the OSC’s support program for helping innovative businesses understand securities laws in Ontario.
In February 2017, the Canadian Securities Administrators announced a regulatory sandbox for fintech businesses. A sandbox lets a company test a new business model with real customers under temporary, tailored relief from some rules, while regulators watch closely. It doesn’t remove the need for legal advice. If anything, it rewards companies that arrive knowing which rules apply and why they’re asking for flexibility.
Open Banking Raises the Stakes
The next big change for Canadian fintech is consumer-driven banking, often called open banking. The idea is that customers can choose to share their financial data with approved providers through secure connections, instead of handing over their banking passwords to a third party, a practice known as screen scraping.
Parliament passed the Consumer-Driven Banking Act in 2024. The federal government’s Budget 2025 then moved oversight of the framework from the Financial Consumer Agency of Canada to the Bank of Canada, and committed to adding “write access,” such as switching accounts or starting payments, by mid-2027.
For fintech founders, that means a new set of rules on accreditation, consent, security and liability. Companies that want to plug into the system will need to meet them, and the ones that understood the framework early will be better placed when it goes live.
What It Means for Fintech Founders
Nanjee’s advice from 2016 holds up. Treat legal expertise as part of the product, not an afterthought. Know which activities your product performs, which regulators oversee them, and what each requires, before you build the features that trigger them.
It also pays to use the doors regulators have opened. Programs like OSC LaunchPad exist so companies can ask questions before they launch, and a sandbox application is a chance to show a regulator a product that was designed with its rules in mind. In fintech, a clear legal path is often what turns a good idea into one that can actually reach customers.
Frequently Asked Questions
Why is legal expertise so important for fintech startups?
Fintech products that hold money, move payments, lend, give investment advice or raise capital are regulated activities, so a company needs to understand the rules before it can reach the market. The article quotes the view that hiring a lawyer matters in fintech "more than any other innovation vertical."
Who is Adam Nanjee?
Adam Nanjee was Head of Financial Technology at MaRS Discovery District, where he was named to lead the FinTech Cluster when it launched in February 2015. He had previously been Vice President of Business Development in Emerging Payments at MasterCard Canada.
What is OSC LaunchPad?
OSC LaunchPad is the Ontario Securities Commission's support program for helping innovative businesses understand securities laws in Ontario. It was created in October 2016 and was described as the first dedicated fintech unit at a Canadian regulator.
What is the CSA regulatory sandbox?
Announced by the Canadian Securities Administrators in February 2017, the sandbox lets fintech businesses test new business models under temporary, tailored relief from some rules while regulators watch closely.
What is consumer-driven banking in Canada?
Consumer-driven banking, often called open banking, lets customers share their financial data with approved providers through secure connections instead of handing over banking passwords. Budget 2025 moved oversight of the framework to the Bank of Canada and committed to "write access" by mid-2027.