Impak Finance

Impak Finance is a Canadian independent financial institution founded by entrepreneurs and banking professionals wishing to positively contribute and address social and environmental issues. It’s mission is to make money work for positive social, innovative and environmental impact through an online collaborative financial ecosystem powered by disruptive financial technologies developed in house and through third party vendors. It connects savers and investors wishing to change the world with entrepreneurs and sustainable companies sharing similar objectives.
Impak Finance will be opening its capital to all Canadian on October 12, 2016 through a Pan-Canadian equity crowd-funding campaign on the FrontFundr online platform.

Over the next years, it intends to obtain status as a Schedule I Bank under the Bank Act to launch its online banking operations. The Corporation plans to launch “Impak Fund” an online impact lending platform within a non-banking regulatory environment by the end of 2017.
Stated Business Objectives
The Corporation intends to offer integrated lending and investment opportunities that are 100% dedicated to the impact economy in Canada within an online collaborative ecosystem. The Corporation intends to support local, innovative and sustainable projects. Its mission is to become a leading player in collaborative finance in North America and its goal is to contribute and develop the impact economy by putting in place a collaborative, participatory, locally rooted, technology driven and transparent online financial ecosystem.
Products Overview
The Corporation plans to offer two online products in the next years:
*Impak Fund; an impact lending fund planned to be launched in its beta version for end of 2017) and
*Impak Bank; 100% impact dedicated online collaborative bank planned to be launched towards end of 2018/early 2019)
Impak Fund
The Corporation intends to develop and launch an online impact investment fund (the “Impak Fund”) with its mobile device application (the “Impak App”) empowering individuals to directly support the impact economy by investing in the fund which is entirely dedicated to providing loans to impact projects in Canada. The Corporation plans to make the Impak Fund RSSP (Registered Retirement Savings Plan) eligible.
Online or through the Impak App, users will be able to:
*create their own Impak investment account and do all the paper work seamlessly online,
*set Impak investment objectives and manage their investment at their rhythm,
*view their positive impact on the economy, and
*create links with impact projects of their interest or in their area.
By investing money to the Impak Fund account, users subscribe to a bond eligible to RSSP (Registered Retirement Savings Plan) labelled debt fund managed by the Corporation. The Impak App will also provide personal finance management features to help users set their goals and to follow their achievements.
Impak Bank
The Corporation will be leveraging its scoring technology, mobile app, loan expertise, risk management expertise, compliancy expertise and online community to launch its online banking service. The services and products offered by Impak Bank will initially focus on a basic essential range of products reflecting the bank’s core values and enabling the Corporation to fulfill its mission: collecting funds in order to support positive-impact projects. Rapidly, Impak Bank will offer the full scale of products and services needed and expected by its customers.
Local Circles of Investments (LCI)
Local Circles of Investments are group of angels investors, incubators, co-working organisations, companies and individuals that support and finance local impact projects. They will be attracted by the free impact investment online tools the Corporation will provide them through the Impak online community such as the Impak investment scoring and analysis tool.
Members of LCI will be able to
*use Impak Finance advanced due diligence framework and detailed credit scores to make your investment decisions, and
*help impact businesses by giving them time, expertise, etc.
*seek assistance from any other Impak community members for support
Market
Market trends
The product offering of the Corporation is at the cornerstone of three major market trends observed worldwide and specifically in Canada.
*The collaborative/sharing economy:
The international sharing economy reached about $15 billion in 2014, reports PricewaterhouseCoopers (PwC), and it is on track to reach $335 billion by 2025. Public opt-in to the collaborative economy almost doubled from 2013 to 2014. An AGC Partners report said that investors committed $4.93 billion to 71 deals related to the sharing economy in 2014, up five times from 2013.
*The Fintech explosion: (Financial Technologies)
According to Accenture recent Study - April 2016, global investment in financial technology (fintech) ventures in the first quarter of 2016 reached $5.3 billion, a 67 percent increase over the same period last year. According to Accenture: “The so-called ‘Fourth Industrial Revolution’ is a global phenomenon that brings new innovation and digital companies that compete and collaborate with traditional financial services. Bank customers stand to gain from this.”
Global fintech investment in 2015 grew 75 percent, or $9.6 billion, to $22.3 billion in 2015. North American fintech investment grew 44 percent to $14.8 billion in 2015 and the U.S. continued to dominate the sector with 667 fintech deals, a 16 percent increase.
Canada’s fintech market is beginning to see major momentum. Global investment grew from $3.0 billion in 2013 to over $6.8 billion in 2014 and an expected $15 billion will be spent in 2018.
The 5 largest Canadian fintech venture capital investment where Shopify $100 million (Ottawa), Verafin $60 million (St-John’s), Lightspeed Retail $35 million (Montreal), Blockstream $75 million (Montreal), Zafin $15 million (Vancouver). Source: marsDD
*Growth of Impact investment:
According to Purpose Capital, a consultancy firm specialized in impact investment, the Canadian impact investment sector was over $60 billion in 2015 and will reach over $500 billion in the next 10 years.
Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.
The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, clean technology, microfinance, and affordable and accessible basic services including housing, healthcare, and education.
Transformation of the Canadian Banking sector
The Canadian banking industry is essentially an oligopoly with the “Big Six” (the six are RBC, NBC, TD, CIBC, Scotia, BM) controlling more than 85% of the sectors total assets. The Big Six consolidated revenue rose to $35.5 billion in 2015, up from $20.5 billion in 2014 and up from $18.9 billion in 2013. The industry’s performance is still being driven by a benign credit environment and the ongoing strength of retail banking in Canada.
Despite the dominance of the Big Six, they are falling short of consumer expectations. Such shortfall creates opportunities for start-up companies to enter into the banking industry. The banking industry is ripe for disruption with consumers wanting businesses to play a much more important and visible role in society in a manner that allows the consumers to participate. Furthermore, the rise of financial technology or “Fintech” has also disrupted how banks used to operate. Financial services once offered exclusively by bricks-and-mortar financial institutions are now being unbundled by emergent start-ups, offering new technologies to deliver innovate financial services products directly to consumers.
Consumers
Consumers are primed for financial institutions to change fundamentally both with respect to their use of technology that will both make it easier for consumers to transact with financial institutions as well as provide customized wealth management advice. Additionally, consumers, specifically the Millennial Generation, want to interact with banks that provide real transparency and demonstrate that they are committed to impacting the community in a positive manner.
The Millennial Generation or Generation Y are the demographic cohort between Generation X and Generation Z. It is the largest generation and fastest growing demographic. Their unique habits and preferences may reshape the banking industry.
Millennials want services that provide access to product but not ownership. They aren’t influenced by advertising. They review blogs before making a purchase. They value authenticity over content. Their future inheritances won’t change their buying behavior. They want to engage with brands on social networks. They want to co-create products with companies. They are using multiple technology devices. They expect brands to give back to society and to the community. Source: Viacom Media Research 2015
Financial technology
Fintech - information and communications technology to better deliver financial services - has undergone explosive growth in recent years. Technology spending by the Canadian financial sector is estimated to reach $14.8 billion by 2018. While Fintech itself is nothing new, from ATMs to online banking, financial institutions have been using technology to deliver services to end users for over 30 years, there is market opportunity for new entrants that promise to deliver a new user experience, especially to the Millennials that grew up on smartphones and tablets.

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