Regulatory hurdles could hamper Canada’s progress on fintech and “the next generation of advice,” according to a new report from the C.D. Howe Institute.

The next phase of financial advice will be marked by “digital collaboration through technology” that supports the work of human advisors, writes study author Chuck Grace in “Next-Gen Financial Advice: Digital Innovation and Canada’s Policymakers.”

Technology, Grace said, should be “viewed as a savior, rather than a threat,” at a time when fees are being scrutinized and demographic shifts are redefining the industry.

But the widespread adoption of technology is being held back, not by current regulations taken literally, but by “current regulatory practices,” he said. This could set the stage for a “wholesale disruption” of the financial services industry and the inherent economic risk therein.

The report challenges policymakers to act swiftly. “The opportunity to prudently and methodically analyze the implications of brave new worlds is behind us,” it says. “It is time for firms and policymakers to act – before a 25-year-old technologist in parts unknown defines the future for some of our most respected institutions.”

The report recommends policymakers do the following: “take the lead” and address the issue of borderless digital technology head-on; embrace open banking as the EU has; allow data to move more freely across regulatory silos; increase the digital proficiency of advisors; and de-risk innovation “for start-ups and incumbents alike.”

The full report is available here.