Boyden Executive Search

Our Conversations with Canadian CEOs across Fintech, Paytech, & Ecommerce on crisis impacts and outlook

By Jim Harmon, Ian Collyer, Harangad Singh, Justin Ferrabee

This year – and the next – doesn’t have a playbook. The old rules do not apply. So we set out to develop a framework to not only understand the full extent of COVID-19 impacts across Fintech, Paytech, & E-commerce but also gain insight into what’s next. To do that, we approached CEOs and key executives across 40 of Canada’s leading organizations in the sector, hearing their outlook for the next year amidst unprecedented uncertainty and rapidly changing workplace and market conditions.

The overall feeling across the sector, from the executives we spoke with, is one of positivity – both in how their organizations and employees have responded to the pandemic (and their new work from home environments) and in accelerated market opportunities and demand they are seeing across the e-commerce and digital payments landscape. This positivity is, of course, countered with acknowledged uncertainty about the nature and speed of the post-COVID economic recovery and potentially brewing wellness concerns amongst their employees. 

Below, we share core discussion themes and direct quotes from these conversations to outline what the COVID-19 impact looks like across the Canadian Fintech, Paytech, & Ecommerce business landscape. We will continue these discussions in the post-crisis developments.

We asked about the impact of the pandemic on their business over the last five months and their outlook for the next twelve months.

As expected, given the physical shut down across the retail, restaurant, and hospitality sectors, point of sale (POS) transactions and revenue were significantly down. Though, starting in May, these transactions and revenue have been slowly coming back as the economy reopens.  Since May, we’re seeing a steady increase in transaction volume. ‘Our business is up over 50% Year on year in both April and May.’

When it comes to digital payments, everything they expected to happen over the next 10 years is happening now. There has been a significant increase in demand across online and digital payments: ‘Everything we expected to happen by 2030 with digital payments is happening now’. 

‘We’re seeing an increase in demand – specifically an increased demand in organizations wanting to pilot and test digital payments.’

The adoption and purchases on online and digital payment technologies has sped up. ‘We’re seeing clients expedite their buying decisions and purchases.’

The rapidly increased demand has caused paytech and e-commerce companies to invest in and accelerate new product development. ‘The COVID shutdown has caused us to accelerate our investment and roll-out of new online products. Our strategic roadmap was accelerated, resulting in the much faster release of these products, which are all about helping our customers set up online transactions’ ; ‘The pandemic sped up our shift (in investment) from our legacy products to our payments new products. The demand for our new payment products has accelerated faster due to the pandemic.’

While there is uncertainty around the economic rebound and the US market, these executives say increased demand in their next-generation products and e-commerce growth is ‘here to stay’ for the next year onward. ‘Overall, business has flourished, and we expect that to continue over the next 12 months.’

Beyond marketplace dynamics, we asked the executives about the impact the pandemic had on their organizations.

In almost every instance, the shift to work from home was fast and successful for these organizations: ‘As a technology company, we were well suited to shift our workforce to work from home’. ‘ We took very early action in January to prepare the organization. We had people self-isolate when it was recommended vs. directed. 90% of our company has been working from home since mid-March.’. ‘We had already allowed people to WFH two days a week so it was a fairly seamless process.’. ‘ We learned from SARS and had a good business continuity plan in place. Our entire workforce was working from home two weeks before the lockdown. We made a few workforce reductions, but otherwise, our headcount has remained flat.’

No company will return to 100% in office and many will significantly change their office space. The hybrid WFH model seems most likely to prevail across the sector: ‘Longer term, we see a higher percentage of our workforce working from home.’  ‘ The WFH shift has changed our business. We’ll never return to a 100% office company. Expect it will be a hybrid model with hoteling, more WFH vs the traditional office set up.’.  ‘We expect WFH will continue. We did a survey of our staff and 50% wanted a WFH hybrid situation (work from office and home) and 50% wanted to completely work from home. With what we have seen, we will not be returning to all of our former space. A hybrid WFH/office model will be our path.’. ‘As a company, we have fully shifted to WFH. Going forward we see maintaining a small office with increased numbers of our employees continuing to work from home.’

Maintaining culture, employee wellbeing, and onboarding new employees are cited as challenges seen during the pandemic and WFH situation. ‘While working from home has been productive, we are missing the organic conversations and ideas that come with unplanned office discussions.’.  ‘The onboarding of new employees into our organization and ensuring those cultural connections has been challenge we have been working through’. ‘With everyone WFH, we’ve had to become more thoughtful in our collaboration to keep everyone connected. We still miss in-person connections and that has been especially tough for our extroverted employees.’

What are the biggest challenges these executives are seeing over the next 12 months?

Employee wellbeing/mindfulness during this uncertain and very stressful time. ‘Mindfulness. For the next months, we’ll continue to focus on employee wellness, realizing the stress and anxiety the pandemic has caused -and will continue to cause our employees. We need to stay close with our employees, especially given the extended WFH scenario and uncertainty around how school will work for our employee’s children in September.’

Full economic impact has not yet to be realized/understood. ‘The biggest challenge is that the full economic impact of the pandemic has not yet been fully realized. We’ve only seen the first few months so far. What happens with rising mortgage defaults, businesses going under, consumer debt increasing? There could be a significant economic impact later in the fall.’

The market is moving fast and there is a big short-term and long-term opportunity to shift to new products. ‘The biggest opportunity we have seen is that the pandemic (and some of the slowdown around the pandemic) has caused us to pause and rethink some foundational things, such as product, instead of being in a continued  chase and respond to clients mode.’ ‘Biggest opportunity is the shift to new product areas and clients.’

Uncertainty in the US market. ‘The challenge is the uncertainty with the US COVID situation and the US market – our key market for our new platform.’

With increased e-commerce demand, retaining digital talent is a challenge. ‘Our biggest challenge is retaining digital talent due to increased demand in digital talent across all types of businesses that are shifting to e-commerce. We’ve already lost three people to other opportunities.’

For earlier stage companies, managing cash and employee morale through this time. ‘We’re focused on three areas: 1) capital planning; 2) reorienting the business around VC expectations; 3) being more thoughtful around how people are feeling/thinking.’

Pending Consolidation – as the turbulence in the core economy hits, there will be casualties and a reordering of companies through increased M&A activity.

We asked organizations how likely they are to grow and expand headcount in the next 12 months?

50% of organizations expect to grow and expand their headcount over the next 12 months.  

The past five months of the COVID pandemic have driven unprecedented opportunities and challenges for the Canadian Fintech, Paytech, and E-commerce landscape. While the threat of COVID will eventually dissipate with therapeutics and vaccines, it is clear the pandemic has set in motion lasting changes to consumer behaviour and the broader digital commerce landscape.    

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