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Fintech is getting frothy.

Companies and startups that use technology to disrupt or at least prod the financial services industry – so-called financial technology or "fintech" companies – are attracting a lot of money and attention, but they look prone to a similar level of hyperbole that inflated the dot-com bubble, and the likes of Pets.com, in the 1990s.

Indeed, the excesses of that decade ("You're a dot-com? Take my money!") echoed during a panel discussion about financial innovation last week, at the MaRS Discovery District in Toronto. Alexander Peh, head of market development and mobile at PayPal Canada, dryly recommended that even dubious startups can attract some interest if they simply label themselves as fintechs.

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The audience chuckled, but he had a point: With few barriers to entry, just about anyone can apply the label and potentially attract attention – and money – for their efforts. This explains why there are an estimated 8,000 fintech startups in the United States alone, driving, at the very least, what looks like a spinoff industry in fintech panel discussions.

"I guess many companies have branded themselves as fintech," said Jim Orlando, managing director of OMERS Ventures, the venture-capital arm of the Ontario Municipal Employees Retirement System.

But he said that a distinction must be made between true fintech companies, which develop technology that is typically sold to institutions, versus technology-enabled financial services companies, which offer a consumer service.

This latter group has to attract consumers to become lenders and borrowers, or open a savings account.

"That's a very difficult proposition because you have to get a single consumer, one at a time, with high marketing costs," Mr. Orlando said. "And typically consumers don't want to trust new companies with their money."

"So I don't have a good feeling for a lot of these consumer-oriented financial services companies that are sort of waving the fintech flag," he said.

But the money flowing into fintech, as a whole, is huge. According to Accenture and CB Insights, investments tripled last year to more than $12-billion (U.S.) – an "explosion," according to some reports. That may be just the start: One estimate suggests that these investments will rise to about $30-billion this year.

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Canada is a player too. According to OMERS, 89 fintech startups here have attracted a collective $1-billion (Canadian) since 2010.

The upside is that some of these startups will drive better, simpler and easier financial services for consumers. A few will thrive: LendingClub Corp., a peer-to-peer lender, raised $1-billion in an initial public offering in December.

Yet, the vast majority will likely fail, which is why bank executives are watching the sector closely but not losing much sleep over the number of emerging players nipping at their heels.

Dave McKay, chief executive officer of Royal Bank of Canada, suggested at the recent Scotiabank Financials Summit that incumbent banks are only fearful of fintech innovation that they can't deliver themselves.

"We don't have to be there on day one," Mr. McKay said. "So all we have to be really cognizant of is someone building a capability that we can't replicate for some reason."

He hasn't seen anything yet. "There is a lot of good innovation out there; there is a lot of capital going in to Silicon Valley, [but] they're working on almost all the same stuff. And all of it is replicable so far."

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