Parna Sabet-Stephenson
Partner
Pamela Draper
President, Digital Commerce Payments
Jason Young
Chief Legal Officer
Saud Aziz
Co-Founder
Partnership Behind the Product
Abstract: In this panel on fintech partnerships, embedded infrastructure, and the operating models behind financial innovation, Parna Sabet-Stephenson (Partner, Gowlings) moderated a discussion with Pamela Draper (President, Digital Commerce Bank), Jason Young (Chief Legal Officer, Peoples Group), and Saud Aziz (Co-Founder, Venn) on what really sits behind the products customers see. The panel explored what fintechs should build versus borrow, when going direct to payment rails or regulatory infrastructure makes sense, and why bank and trust company partnerships remain critical even as Canada moves toward real-time payments, open banking, PSP registration, and new network access models. Across bank, trust company, legal, and fintech founder perspectives, the message was clear: fintech innovation is rarely a solo act, and the companies that scale best are often the ones that know which layers to own, which partners to trust, and how to navigate the regulatory, technical, and network complexity behind the scenes.
👉 Check out the full VIDEO here.
Parna Sabet-Stephenson: We have a very exciting session today about partnerships and what sits behind the product.
I am delighted to be joined by two leaders from institutions that are enabling fintech innovation in Canada: Pamela Draper, President of Digital Commerce Bank, and Jason Young, Chief Legal Officer of Peoples Group. We are also joined by Saud Aziz, a fintech founder who is experiencing these partnerships firsthand.
When people think about fintech innovation or fintech products, they often focus on the customer-facing product: the app, the card, the lending experience, or the payment solution. But behind every successful fintech offering, there is an intricate set of partnerships.
That is what we are here to talk about.
What is the fintech really building, and what is it borrowing?
Pamela Draper: When you think about the fintech landscape, it is so broad that it is hard to say exactly what fintechs are building and what they are borrowing, because it depends on the fintech.
They may be building the entire thing, or they may be building a portion of what their product is and borrowing the rest.
We work with a lot of fintechs, and there are many exciting products coming into Canada, such as the Real-Time Rail and the open banking network. We have been talking to our fintechs and saying: with our institution, you can build as much as you want and borrow as much as you want.
What I mean is that whatever you do not build from a payments perspective, we have. We also operate it like a menu. You can select all or part of that menu and work it into what you want to build.
The key point is: what is your core competency as the fintech? What is the user experience you are trying to generate? Do you want to focus on that, or do you want to focus on the banking and payments infrastructure behind it?
Jason Young: I have been at Peoples Group for five months, so it is a new experience for me being on the bank side. Prior to that, I was at PayPal for 12 years, so I saw things from the fintech side as well. PayPal is probably the original fintech.
I think fintechs are trying to build a better mousetrap. They are trying to move fast and break things, and there is a natural tension between that DNA and regulated financial institutions, which tend to be risk-averse for very good reasons, often because they are required to be.
Our role as a regulated financial institution, and we are both a trust company and a bank, is to navigate that natural tension between what fintechs want to do and our obligations and requirements as part of the payments ecosystem or broader financial services ecosystem.
Saud Aziz: The big thing fintechs are trying to do is identify a problem that exists in the current market.
We already have payment rails that exist, like SWIFT, EFT, e-transfers, and the Real-Time Rail coming up. But what we are really trying to build is whatever our customers need.
Customers do not really care about the underlying functionality or what is happening on the back end. They just want a good experience, and they want their problem solved. They want to be able to pay their vendor. They want it to be seamless, quick, cheap, reliable, and able to grow with them.
We focus exclusively on businesses. We offer business banking to Canadians. They need a platform that works for them at whatever stage they are in. If they are a small business, they want it to be seamless, easy to use, and cost-effective. As they grow into a mid-market company or more established business, they expect user roles, permissions, and additional functionality to help manage their finances.
What happens on the back end is much less interesting to them. We focus on the user experience and the value we provide on the front end that they can see, feel, and appreciate.
Parna Sabet-Stephenson: What is the line between smart focus and dangerous dependency?
Saud Aziz: For us, it is about focusing on the things where we have a competitive advantage.
As a fintech, our competitive advantage is around the user experience. How seamless can we make the offering? How can we make it functionally unique and specific?
Ultimately, what we try to do is create a product that is bespoke and feels like it was designed for that one unique business. That is what we focus on.
The line is around the things that are essential to providing that experience. Those are the things we should own in-house. That might include how quickly we can onboard a customer, what the user experience looks like when they send a transfer, create a card, or make a purchase.
Those things are really important for us to own.
But which settlement agent is working on the back end to move money through the system is much less important. That is the type of thing we are more comfortable working with a partner on.
Those are also things that are not mission-critical to the business but require a large amount of overhead. As an earlier-stage fintech, that can become a burden on our main focus.
Parna Sabet-Stephenson: Lately, we have heard so much discussion about going direct: going direct to payment rails, going direct to Interac, going direct to the payments network.
When you hear this, are we talking ambition, maturity, or naivety?
Pamela Draper: I think we are talking about all three.
Some companies have done a lot of thought and research into the total commitment required to be a direct connector to some of the rails, including compliance staffing, technology, technology staffing, and the broader global picture beyond just the per-transaction cost.
For those fintechs, it may be ambition or maturity.
But there are many companies that have not done the full scope of that work. They look at a headline that says if they are a direct member, the cost to be on the network is this per transaction, versus connecting through a provider at another per-transaction cost.
If they are looking only at that per-transaction savings, that is extreme naivety.
They do not understand the investment in the team and technology infrastructure required to get to that level of participation. When you aggregate that investment and convert it into a per-transaction cost, the cost may be much higher than what a provider charges.
We aggregate that investment, infrastructure, and compliance investment across our entire customer base, versus one fintech doing it only for itself.
Parna Sabet-Stephenson: Jason, you have previously said that becoming a bank or trust company is not really for amateurs. Let’s unpack that.
Jason Young: Being a bank is not just about having a banking licence. Being a trust company is not just about having a trust licence.
There is a lot of regulatory overhead: assets, technology, fraud controls, compliance functions, and more.
If you go back to what fintechs are trying to do, the successful ones are trying to innovate and constantly reinvent themselves until they find their market. Then they need to continue innovating in order to scale.
That culture of moving fast and breaking things will be impaired as soon as you start thinking like, or having to act like, a regulated financial institution. That is true in Canada and in other markets.
In my previous life, we operated in 203 markets around the world, and I saw this happen time and again. Even a fintech as large as PayPal made calculated choices about how it wanted to be regulated in specific markets. In some cases, we withdrew from markets or changed our business model to avoid regulation because being regulated in those markets did not make sense from a business standpoint.
That is the kind of calculus fintechs need to go through when confronting questions about whether to go direct or partner.
Parna Sabet-Stephenson: Pam, both Digital Commerce Bank and Peoples operate in ways that perhaps the big banks are not operating. What makes that difference?
Pamela Draper: For us, we operate differently because that truly is our business.
We have a banking licence within our corporate structure, but we use it very differently. We use it purely to facilitate online payments through our APIs.
We do not have retail customers, meaning individuals. We have purely corporate customers, and those corporate customers use us to move high-velocity payments across every major Canadian payments rail, including Interac, EFT, and bill pay.
We are also the only financial institution in Canada that does card issuing and card processing under one roof.
From our perspective, we are much more of a fintech than an actual bank, despite having that licence.
Parna Sabet-Stephenson: We have talked about the wonderful things partnerships bring, but there must be challenges as well. What makes partnerships get messy?
Saud Aziz: The fintech’s job is to innovate, push boundaries, and do things that have never been done before. A partner’s job is to empower that, while also maintaining guardrails because of its licensing structure.
That is where the healthy push and pull happens.
We might come up with a specific product construct that we think is extremely innovative and important to the market, but it has not been done before. Then the question is: how do we launch it with the same innovative approach we want while still meeting the regulatory requirements that may not apply directly to us, but do apply to our partners?
That is where a lot of the friction comes from. You need a good partner and you need to work with them on it. But you cannot always get those things across the line, and that is the most challenging part.
Pamela Draper: From the partner bank’s perspective, friction can come from fintechs not necessarily grasping the severity of network relationships.
Those networks include Interac, Mastercard, Visa, and other banking relationships. Even though we are a partner bank, we are beholden to all of the rest of the banks in Canada that sit on the other side of our transactions.
Sometimes fintechs run fast and break things. It is our job to say no: Interac will hate this, the other banks will hate this, and we need to stop because it could jeopardize our relationships with major networks.
That will be interesting when fintechs start going direct. They may have a softer view of how those networks will view certain transactions, certain customers, or certain velocity without constraint.
The guardrails we put in place come from having a banking licence since 2007 and knowing how Canadian networks operate, what will irritate them, and what will not.
If you remove some of those partner bank relationships and allow fintechs to go direct, you may see more direct-facing friction.
Parna Sabet-Stephenson: What are some early signs that something may be going wrong in a partnership?
Jason Young: Our role as the partner financial institution, as the expert in the regulatory landscape and compliance obligations, is to help the fintech navigate and get to the end goal of whatever they are trying to build.
There is a lot of work we have to do internally to figure out how to help the partner do what they want to do in a compliant and safe way that minimizes or mitigates risk.
That does not mean you cannot take risk. It means you have to go in eyes wide open about the quantum of risk and whether you are prepared to take it on. Does the risk-reward make sense?
A lot of my role and my team’s role at Peoples is about trying to solve the natural tension between what fintechs want to do as innovators and what we need to do as guardians and experts on the regulatory front.
A big part of that is acting as a connector between other members of the financial services ecosystem, including networks and regulators. They have expectations of us, and those expectations flow down through downstream participants.
Often, what fintechs are trying to do is something that has not been done before, so there is no playbook. You have to help create or write that playbook. You do not do that in a vacuum. You do it in consultation with the other members of the ecosystem.
Parna Sabet-Stephenson: The ecosystem is evolving, with fintechs becoming regulated depending on the activity, including as PSPs, and soon through open banking. Hopefully that contributes to a sounder system for partnerships.
At the same time, what do all these changes mean for the future of partnerships: open banking, Real-Time Rail, direct membership, Interac, and the networks?
Pamela Draper: We are really excited.
We think these changes will allow fintech in Canada to build better, more exciting, more robust, and more varied financial products.
If you look at the Canadian landscape compared with what is available in the UK, Europe, South America, Australia, and the United States, those markets are further advanced in the breadth of product offerings they can build because they have real-time payment systems and regulations or guidance around open banking.
As we look at Real-Time Rail, open banking, and stablecoin regulation all coming in at once, I do not think there has been a time in recent Canadian payments history with so many potential positive changes that could allow more building because of added clarity.
We are very excited. Having always been focused on the technology side of payments, we see much more opportunity.
In the Real-Time Rail space, we are building to Wave 1, and we are the only bank building to Wave 1 that will allow fintechs to connect directly to the Real-Time Rail.
When I think about what potential customers could do when open banking regulation comes in, there is huge momentum in the space right now. There has never been more to talk about at one point in my career.
Saud Aziz: For us, all of these regulatory changes are amazing, especially as we are registered under the Bank of Canada as a PSP.
When you think about fintechs, it is essentially an economies-of-scale business. Early on, your cost is higher, but you compete on user experience. You grow and grow, and traditionally, you needed to reach a certain level of scale where it made sense to take on some of those obligations and requirements.
That is a long, difficult journey.
Being able to do more on our own helps us innovate faster. It will create more fintechs that are able to go further without having to go through the major hurdle of becoming a licensed institution.
Anything that is good for fintechs ultimately flows back to consumers and individual businesses. These changes will help more fintechs thrive and go further, and they will help create more fintechs as well.
Jason Young: I am excited as a Canadian and as a consumer of these services. I want to see what fintechs do. I want to participate in it and take advantage of it.
The reason I came to Peoples from PayPal five months ago was because I saw that Peoples would play an important role in facilitating and enabling that type of innovation.
Think back to 2018. I was doing government relations work for PayPal, and there was no real conversation taking place in this country on open banking, even though it had already been adopted in many other markets.
We set up a policy day with the Canada 2020 Foundation to bring government, regulators, competitors, fintechs, and others to the table to talk about open banking in Canada. That was around 2017 or 2018.
Here we are eight or nine years later, and it is just happening now. It is still a graduated process.
Canada is behind in a lot of the regulatory innovation that we need in order to provide Canadians and Canadian businesses with choice and remain competitive with other countries.
I am excited for the role Peoples can play and the role I can play within Peoples to provide fertile ground for our partners to innovate.
I would also say that regulatory changes making it easier for fintechs to go direct do not kill the partnership model. It changes the model and makes it more complex.
What we do in managing risk, understanding the regulatory environment, and helping fintech partners build within the ecosystem does not change. It becomes more complicated in some cases, which just makes our job more interesting.
Parna Sabet-Stephenson: Saud, how do you see the evolution of the partnership model affecting your business in terms of opportunities?
Saud Aziz: It definitely changes, but it does not change to the extent that partnerships no longer exist.
The more flexibility we have to control our own destiny and innovate and build products how we see fit, the better. But there will also be work on the other side once we start to work with some partners directly.
Right now, there is a layer guarding fintechs and acting as a middle layer, translating some of these requirements for us.
Taking Interac as an example, if we wanted to go direct, we could, but we would still need to work with an institution for settlement. That relationship does not end. It continues in a different fashion.
I think it will be very good for us.
Parna Sabet-Stephenson: Why do you think the big banks are not necessarily embracing these partnerships in the same fashion?
Saud Aziz: I think they view it more as cannibalizing their business, whereas for partners like the two up here, this is a big part of their business.
Pamela Draper: I also think the big banks have inherently been a lower-tech model in the payments space.
This is our entire business. A large bank has mortgages, retail banking, investment banking, and many other businesses. Payments are a smaller piece of the pie and historically have been less technically enabled.
They would have a long way to go to catch up and build the technology to the point we have. When they look at all their strategic priorities, building that specific technology for a smaller part of the overall pie may not make sense to them.
There is a risk element for sure, but there is also a big technology element.
Saud Aziz: Technology is difficult. That is why companies like ours exist.
Parna Sabet-Stephenson: I think we have established that fintech innovation is rarely a solo act.
Perhaps the most successful fintech companies are not the ones that own every layer of their stack, but the ones that know how to establish strong partnerships and partnerships that can scale.
Thank you so much for sharing your wisdom with us, and thank you all for joining us.
Here are 10 key insights from the panel:
1. Fintech products are built on invisible partnerships
The customer sees the app, card, lending experience, or payment solution, but behind that experience is a network of banking, payments, compliance, and infrastructure partners.
2. Fintechs need to know what to build and what to borrow
Panelists emphasized that fintechs should focus on their core competency and borrow the infrastructure layers that do not differentiate the customer experience.
3. User experience is often the fintech’s real competitive advantage
For Venn, the priority is creating a seamless, bespoke business banking experience, while relying on partners for back-end infrastructure that customers do not see.
4. Going direct is not just a per-transaction cost decision
Direct access to rails may look cheaper on paper, but the true cost includes compliance teams, technology infrastructure, staffing, operational resilience, and network obligations.
5. Becoming regulated changes how a fintech operates
A bank or trust company licence brings significant regulatory overhead, and fintechs need to understand how that can affect their ability to move quickly and innovate.
6. Partner institutions help fintechs navigate regulatory tension
Banks and trust companies act as connectors, translators, and guardrail-setters between fintech ambition and the expectations of regulators, networks, and the broader ecosystem.
7. Partnerships can get messy when innovation meets network rules
Fintechs may want to move quickly, but partner banks must protect relationships with Interac, card networks, other banks, and regulators.
8. Canada’s payments ecosystem is entering a major period of change
Real-Time Rail, open banking, PSP registration, stablecoin regulation, and direct access models could significantly expand what fintechs can build in Canada.
9. Going direct will change partnerships, not eliminate them
Even with more direct access, fintechs will still need relationships for settlement, compliance, risk management, and ecosystem navigation.
10. The best fintechs will scale through strong partnerships
The panel closed with the view that successful fintechs are not necessarily those that own every layer, but those that know how to build trusted, scalable partnerships behind the product.
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