Artificial intelligence and digital assets were the two most active verticals for Canadian fintech investments in the first half of 2026, according to the “H1’26 Pulse of Fintech” report published by KPMG International.
Nineteen investments were made in AI and machine learning-oriented Canadian fintechs, while eight were made in Canadian fintechs centered on digital assets and cryptoassets. Dubie Cunningham, KPMG Canada’s banking and capital markets partner, noted that investment in AI has been shifting from wide experimentation to focused applications.
“Fintech investors aren’t investing in AI for AI’s sake – they’re being strategic. Capital is flowing to fintechs that are using AI to solve a specific problem. The fintechs that are leveraging AI to make deposit-taking, lending and payment processing faster and more efficient are creating significant value; those are the types of fintechs where we see investment dollars going over the next year to 18 months,” Cunningham said in a statement.
With regard to digital asset-based fintechs, regulated platforms with scale are expected to attract both local and overseas investors with the evolution of financial innovation in Canada’s financial services sector due to the Consumer-Driven Banking Act and the Real-Time Rail’s implementation. Consumer-driven banking enables consumers to disclose financial information with accredited fintechs securely, and the Real-Time Rail facilitates real-time money movement and improves payment data in an upgrade to the country’s payments system.
“Consumer-driven banking and the Real-Time Rail are opening up the infrastructure that fintechs need to compete, and these regulatory reforms could materially alter fintech economics and create conditions for a new period of competition in financial services,” said Andrew Mathias, KPMG deal advisory partner. “While regulation is often seen as a constraint, it might finally become a catalyst for fintech investment. Access to secure data-sharing systems and modern payment infrastructure will lower the cost of new services, enable new payment and account-aggregation products, reduce fintech dependence on incumbent institutions, increase partnership and acquisition opportunities and put pressure on established banks and larger software providers to differentiate.”
In the first half of 2026, Robinhood Markets Inc.’s acquisition of Toronto-based WonderFi Technologies for US$168.4 million was Canada’s second-biggest fintech deal; the transaction represented Robinhood’s Canadian debut via WonderFi’s regulated cryptoasset platforms Bitbuy and Coinsquare. Mathias predicted that consumer-driven banking and the Real-Time Rail would bolster competition and consolidation for Canadian fintechs over the next year to 18 months.
Overall, investors injected US$996.7 million into Canadian fintechs across 47 deals. These figures dropped compared to the second half of 2025, which recorded a total investment of US$1 billion in 56 deals per Pitchbook data. Deal activity in the first half of 2026 fell by 40 percent compared to the first half of 2025; however, Cunningham said this did not mean investors were backing away.
“Canadian fintech has entered a selective maturation phase, with investors going after fewer deals but applying more scrutiny to their investments. They are being more discerning and going after fintechs that have scale, specialized AI capabilities and that are competitively positioned to take advantage of upcoming reforms to Canada’s financial services industry,” Cunningham said.