Michael Gokturk admits offering a “very shoddy, crappy product” in 2011 when Payfirma became the first in Canada to offer mobile payment services, similar to San Francisco’s Square hardware.

But there was a “very small sliver” in the marketplace that wasn’t being filled by other financial institutions like Moneris, the CEO recalled at a September 27 panel during Vancouver Startup Week.

“We ended up landing CIBC as a major distribution partner, so all of the business we get nowadays is referred to us from CIBC.”

Despite the name of Gokturk’s panel – Disrupting Giants: Lessons from Vancouver Fintech – he said “disruption” isn’t the right strategy financial tech firms should be adopting.

“There’s also a way to collaborate with the giants to disrupt the incumbents,” he said, adding startups like his can innovate faster than large competitors like Moneris.“If you can help [banks] get to that endpoint solution faster and with less brain damage … they are quick to move, they are quick to partner with you and more importantly, they are quick to promote you.”

Last year, investments in collaborative fintechs totaled US$8 billion versus the US$10 billion raked in by competitive fintechs, according to an April Accenture report.

But year-over-year, investments in startups looking to collaborate with the industry increased 138% compared with the 23% gain made by startups looking to compete.

“This is the age of collaboration rather than disruption,” Brandon Lee, Canada’s consul general in San Francisco, told Business in Vancouver.

Lee, who was in town for Vancouver Startup Week, said Ottawa is now focusing on opportunities that would allow fintechs to either operate “underneath the regulation” or partner with major players.

“The days of three people and a laptop having a big idea and disrupting their economies or the major players in their sector … are fast ending,” he said. “There are a few fintechs that have the potential to really disrupt the financial services industry and big banks. But the majority would do much better to partner.

”Vancouver-based BTL, which specializes in the same sort of blockchain technology that verifies Bitcoin transactions, partnered with Visa Europe in September.

BTL is running experiments to test the features of its blockchain platform to help Visa process transactions faster.

“We’re now in an era where we have very small startups working with very large companies like banks,” BTL CEO Guy Halford-Thompson told Business in Vancouver. “And there’s a huge amount of challenges with working with those large institutions, especially at the speed at which the industry is moving.”

But the slow speed at which large financial institutions can innovate and adapt is exactly why they want to partner with startups that can pivot with more agility, he added.

Startups, meanwhile, benefit from the scale and resources available to those slow-moving monoliths.

“For us, it’s generally less about competition and more about collaboration,” said Alexander Peh, PayPal Canada’s head of mobile.

PayPal’s online money transfer service has 188 million consumers operating in 203 markets across the globe.

It partnered with the BC Tech Association in October 2015 to create a formalized fintech cluster in Vancouver to help fintech startups innovate and generate revenue.

“We’ve got things that scale that very few financial players regardless can do,” Peh said. “Why would they compete with us or, let’s say, fight us when they could be partnering with a brand like PayPal?”

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