Crypto License in Canada – Money Services Business (MSB) License
Assistance in getting the Money Service Business license in Canada for crypto activities. More information on the crypto license in Canada and our full inclusive service packages.
Quick facts: Canada Crypto License
| License Type | Money Service Business (MSB) |
|---|---|
| Regulator | FINTRAC |
| Timeframe | 3-5 months |
| Government fees | No |
| Minimal capital | None |
| Corporate tax | 15% + provincial CIT |
| Key advantages | One of the fastest and least expensive Western license, multiple possible activities, relatively fast set-up |
The Canadian crypto regulation, officially known as Money Service Business (or MSB for short) is one of the most exciting crypto legislation in the world. Any self-conscious crypto startup should look into Canada to register their activities, as it is a comprehensive and cost effective way to legally operate your crypto business.
- Includes multiple money services businesses: as the framework says, dealing in virtual assets is one of various activities allowed by the Money Services Business regulation.
- Very reputable jurisdiction: located in North America, bordering the United States of America, which a very high GDP, English-native speaking country and access to the global market.
- Possibility to register an “offshore” entity: as a Foreign Money Services Business, a crypto company isn’t required to physically establish itself in Canada to operate under the Canadian regulations. The Foreign Money Service Business registration is granted to foreign entities targeting Canadian customers. This includes providing direct services to individuals or entities located in Canada, even if the business is registered or licensed elsewhere.
- Simple and straightforward requirements: proper risk management and communication to the reports analysis centre, as well as proper implementation of Anti Money Laundering regulations are basically what a Canadian MSB must comply with.
Which activities are allowed with a Canada MSB license? The following services are permitted:
- Dealing in virtual currencies
- Foreign exchange dealing
- Money transferring
- Issuing or redeeming money orders, traveller’s cheques or other similar negotiable instruments
Our complete guide to the Money Service Business crypto license in Canada includes all the recent changes. Find out more about how to start a Canadian crypto exchange in the shortest delays.
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Regulatory Overview: Money Services Business license in Canada for crypto
The crypto license in Canada is called the Money Service Business registration (MSB).
The crypto license in Canada can be described as both comprehensive and enabling. The requirements are set high in regard with the lawful conduct of the activity (meaning consumers are protected, financial crime is prevented and good conducts are adopted). There is no minimum share capital or high entry fees barring the way of startups to get a license.
In the same spirit, foreign companies can apply for an equivalent of the MSB crypto license dedicated to foreign entities operating in the Canadian market, under the name Foreign Money Service Business (FMSB). The requirements are about the same as the domestic MSB license, with an emphasis on disclosing information about the non-Canadian structure.
Certain crypto platforms must register as ‘Restricted Dealers’ with provincial regulators if they offer tokens considered securities.
It is granted by the Financial Transactions and Reports Analysis Center of Canada, better known as FINTRAC.
The authority of FINTRAC and the Money Service Business framework is set in law by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of 2000, last amended in 2025. This text is regularly updated, about every year, sometimes thrice in a single year. This underlines two things:
- Canada is keeping its AML-CFT laws in line with the Financial Action Task Force (FATF), the international body responsible for setting global standards on anti-money laundering and combating the financing of terrorism;
- Canada is incrementally improving its framework, either on business capacity or consumer protection.
The MSB license is not restricted to crypto activities. FINTRAC defines a certain amount of possible money services, among which:
- Dealing in virtual currency;
- Currency exchange (USD/CAD, for example);
- Remitting or transmitting funds;
- Issuing or redeeming money orders, traveler’s cheques or anything similar (monetary coupons, vouchers, etc);
- Crowdfunding platform services;
- Cheque cashers;
- Armoured cars for transportation of fiat currency;
- Acquirer services in relation to private automated banking machines.
A company can register for as many of these services as is required by its activity.
It is important to note that Canadian MSB crypto businesses are not allowed to operate with stablecoins in any manner, unless they receive additional authorization from the Canadian Securities Administration (CSA). Security tokens are subject to security laws in Canada, additionally.
It is possible to obtain a Canadian crypto license for a foreign entity, provided that it has a business relationship with Canada:
- the Money Service Business registration is granted to Canadian entities;
- the Foreign Money Service Business registration is granted to foreign entities targeting Canadian customers.
What are the key advantages of obtaining a crypto business license in Canada
The Canada MSB registration is undoubtedly considered as one of the best virtual asset service provider framework, for multiple good reasons:
- Encompasses multiple financial services: the Canadian framework doesn’t limit your business to just dealing with virtual currencies. It allows for other financial activities such as foreign exchange dealing or money transfer services;
- Very reputable jurisdiction: as a North American powerhouse, being registered in Canada is an instant boost of trustworthiness among financial institutions and users of your services;
- Comprehensive AML-CFT framework: Unlike heavier regulations such as MiCA in Europe, the Canadian MSB framework’s regulatory requirements are solely focused to ensure compliance on Anti Money Laundering and Countering Terrorist Financing. While allowing to provide financial services of multiple sorts, the Canadian regulations are lighter than a full fledged financial regulation;
- High flexibility: while acting as a virtual asset service provider license, the MSB framework also open doors to more sophisticated activities including electronic funds transfer, facilitate transactions, foreign exchange transactions, raise funds, virtual currency exchange, virtual currency transfers and the likes;
- Relatively simple process: as for any virtual asset service provider framework focused on enabling business through regulations not too heavy, Canada provides a virtual currency license regulation that is relatively simple. The requirements are accessible and make sense for the rightful conduct of business.
Ready to provide services in cryptocurrency? Canada may be one of the very best regulations for companies engaged in crypto currency exchange, international electronic funds transfer and the likes. Start a conversation with one of our expert today and gain clarity to make the right decision!
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What are the application requirements for a Canada Crypto License
Your first step to registering a crypto business in Canada is to acknowledge what has to be done and fulfilled first.
| Duration | 3-5 months |
| Local office | Yes (MSB, not for FMSB) |
| Local director | Recommended |
| Accounting and auditing | Yes |
| Economic substance | Yes (MSB, not for FMSB) |
| Government fee | No |
| Corporate income tax (CIT) | 15% + provincial tax |
| Withholding tax (WHT) | 25% |
The crypto MSB license in Canada is granted under the condition that the applicant fulfills the requirements described in the FINTRAC’s guidelines, in addition to complying with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Before the application can even be prepared, a crypto project must choose between the two licensing regime of the Money Service Business framework:
- The Money Service Business (MSB) framework is targeted to companies implemented in Canada;
- The Foreign Money Service Business (FMSB) framework is directed at companies not registered in Canada but willing to offer their services in Canada.
This means that a foreign team does not have to register a company in Canada and to domiciliate their operations in the country, to get the MSB license. Unlike many crypto licenses, the Canadian VASP authorization does not require local establishment in the country. The FMSB license however sets the condition that the entity must offer its services in Canada (among other places).
Meeting one of three conditions is enough for FINTRAC to assess that a FMSB company is serving the Canadian market:
- The business’s marketing or advertising is directed at persons or entities located in Canada;
- The business operates a “.ca” domain name;
- The business is listed in a Canadian business directory.
MSB and FMSB are then confronted to meet the same requirements pertaining to their operations and their compliance with the rules and regulations. FINTRAC breaks down its expectations into 7 categories of programs and documents to prepare:
- Registration with FINTRAC;
- Preparing a Compliance Program;
- Enforcing the rules pertaining to “Know Your Customers” regulations;
- Setting transaction reporting mechanisms;
- Properly keeping records of the client activity on the service;
- Enforcement of the Travel rule;
- The following of Ministerial directives (for example, sanctions against a country).
All of these subitems have their own requirements in terms of documentation to produce and provide to FINTRAC during the application process.
The Compliance Program, for example, requires the appointment of a Compliance Officer. This officer must be a senior officer or a member of the administrative board of the company. This person should have a clear view on the company’s operations and a clear understanding of the AML-CFT practices.
- Having a legal entity in Canada (for MSB) or out of Canada (for FMSB);
- Serving Canadian clients or planning to (with concrete actions);
- Appointment of a competent Compliance Officer;
- Registration of the business to FINTRAC;
- Strong Compliance Program (AML-CFT policies, KYC rules, etc);
- Setting proper records keeping mechanisms;
- Transaction reporting system set to flag different sorts of suspicious activity;
- Detailed business plan;
- Register for the relevant activities to be conducted during the application process.
What is the step-by-step crypto licensing process in Canada?
Starting a crypto business in Canada can be dubbed as simple but not easy. The process is comprehensive and clear, still, it requires conscious legal work and a high level of compliance. The MSB license does not necessarily require a lot of financial means, but does require a very serious project management.
The processing time for obtaining an MSB license can take from a few weeks to several months depending on the completeness of the application.
(OPTIONAL) SET UP A COMPANY IN CANADA
There are two alternatives to get licensed in Canada. The Money Service Business framework, per opposition to the Foreign Money Service Business framework, requires an actual establishment within Canada.
- Registration of a Limited Liability Company in Canada
- Advising on choosing the right province for registration
- Opening of an office space
- Relocation of the team to make Canada the actual place of business
- Accounting and administrative requirements
- Tax registration
Canadian companies must have a local office and staff in Canada to apply for the MSB license.
PREPARATION OF THE FINTRAC REQUIREMENTS FOR GETTING THE LICENSE
The Financial Transactions and Reports Analysis Center of Canada (FINTRAC for short) is the appointed institution for regulating Money Service Businesses, through the Act. The same law, along with FINTRAC guidelines, describes the requirements to successfully apply for the MSB/FMSB license.
- Appointment of a Compliance Officer (it is mandatory for applicants to appoint a Compliance Officer who must possess appropriate professional qualifications)
- Preparation of a Compliance Program with AML-CFT policies and KYC procedures
- Monitoring and reporting system in line with the FINTRAC guidelines
- Enforcement of the Act rules in the internal systems
- Documents required for the licensing process include compliance reporting information, bank account details, registration form and employee numbers.
Canadian companies must have a local office and staff in Canada to apply for the MSB license. The application preparation for a Canadian crypto license generally takes about 3 to 4 weeks.
APPLICATION FOR THE MSB LICENSE DIRECTLY TO FINTRAC
Once the Canadian or foreign company is compliant with all the requirements laid out in the Act and in the FINTRAC guidelines, the application is carried out online within the FINTRAC’s MSB Registration System.
- Submit information pertaining to the corporate structure
- Present the compliance officer
- Disclose information about owners and directors of the company
- Financial projections (estimates)
- Duly filled forms
- Upload all the required documents (Compliance Program, etc)
Once the application is submitted, FINTRAC provides a response within 2 weeks after all documentation is complete. This is also the stage where it is advised to start negotiation with financial institutions for opening a corporate account, if required.
Costs and fees for a Canada MSB License
Canada’s crypto regulation is notorious for not having either registration fees, annual fees nor a minimum authorized capital.
- No fees to get the license
- No fees to maintain the license
- No minimum capital requirement
What matters to FINTRAC, the Canadian regulator, is how compliant your business is with preventing financial crimes and properly implementing risk management.
Due compliance against money laundering and terrorist financing obviously has a cost, but an experience legal partner such as LegalBison can significantly relieve the workload and cost.
Taxes
The taxation of companies in Canada depends on the company’s province of registration and its activity. The base rate at the national level is 38% of the taxable income. This rate is then diminished by a 10% federal rate abatement. An additional 13% reduction further applies.
On the provincial level, another income tax will apply to companies, depending on the province. Each province applies its own corporate taxation. The range varies between 8% (in Alberta) and 16% (Prince Edward Islands), with major provinces such as Quebec, Ontario or British Columbia applying rates of 11.5% or 12% in the case of the latter.
The effective tax rate for a Canadian crypto company will then be 15% + the rate applicable at the provincial level. For tax and regulatory purposes, all cryptocurrency transactions must be valued and reported in Canadian dollars, as cryptocurrencies are treated as commodities rather than legal tender in Canada.
Foreign Money Service Businesses are not subject to Canadian taxes.
Compliance and maintenance requirements after securing a Canada MSB crypto license
The VASP license is required for companies providing financial services using virtual assets, such as cryptocurrency exchanges and wallet services.
Crypto companies in Canada whose application is successful will receive a MSB or FMSB license for a duration of 2 years. Every 2 years, the license must be renewed. This process is currently free of charge.
The process of obtaining a VASP license includes preparing necessary documents, implementing AML/KYC measures, and submitting an application to the regulatory authority.
To renew the license, a Money Service Business must proceed to a review of its compliance documents. This review will assess that the company is compliant with the regulation, given that the Act is amended frequently and the regulation is evolving.
Proper preparation of financial statements and documentation of all audits and correspondence with clients is a mandatory requirement for VASPs and money transfer services companies under the MSB framework.
Anti Money Laundering and compliance program
This assessment checks all the AML and KYC policies and procedures in place and their good enforcement. The complexity of the assessment depends on the business and the risks associated with its activities.
In its day to day basis, a Money Service Business is obligated to enforce its AML-KYC policies and procedures. For example, identifying customers at the beginning of the business relationship, monitoring transactions in the case of an exchange and flagging the suspicious activity for review by FINTRAC, with a maximum of details.
Under Canadian regulations, VASPs must conduct regular reporting to financial and supervisory authorities to ensure ongoing compliance.
Canada enforces the Travel Rule for transactions exceeding CAD 1,000, requiring VASPs to collect and share sender and receiver information.
Common misconceptions about the Canada MSB license
No, the MSB framework doesn’t equate a Forex license. The regulated MSB activity is “Foreign exchange dealing” (e.g., exchanging CAD for USD). “Forex trading” (as in offering leveraged contracts for difference on currency pairs) is a derivatives or securities activity that falls under provincial securities regulators, not FINTRAC.
No, an external audit of the compliance program every two year is not what is required by the law. The regulation requires a compliance program that includes an effectiveness review every two years, but it does not mandate that this review be “external.” FINTRAC guidance allows this review to be conducted by either an internal or external auditor, as long as they are independent of the compliance program itself.
No, “wallet services” or “storage services” aren’t specific activities with a defined registration to FINTRAC. The law defines the regulated activity as “dealing in virtual currency,” which includes “virtual currency exchange” and “virtual currency transfer services”. The provided sources do not list “wallet services” or “storage” as a standalone MSB activity. A company that only provides storage (a non-custodial wallet, for example) would not be required to register as an MSB.
No, cryptocurrency is not legal tender in Canada. The Canadian dollar is the one fiat currency officially in use for Canadian citizens, persons or entities.
No, offering custody of crypto assets on behalf of clients doesn’t require additional registration. FINTRAC (the MSB regulator) absolutely does regulate custodial crypto exchanges, as they are clearly “dealing in virtual currency”. The requirement to also register with provincial securities regulators is a separate, parallel obligation because those regulators often consider the custodial arrangement to be a “crypto contract” and therefore a security.
What are the texts composing the legal framework of the Canadian crypto license
The cryptocurrency regulation in Canada for businesses is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of 2000, last amended in 2025. This law, published by the Minister of Justice of Canada, establishes the legal foundation of the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC. This agency is the Canadian national institution for prevention of financial crime and enforcement of AML-CFT measures.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act describes different cases of offenses by persons or entities acting with a Money Service Business license.
Pertaining to financial activities subject to the supervision of FINTRAC, the Act of 2000 details the rules and obligations of entities authorized by the Canadian regulator, with an explicit emphasis on anti money laundering and countering the financing of terrorism (AML-CFT).
The law provides a clear overview of the requirements and obligations of a money or crypto business registered in Canada. It explicitly states the obligation to register for an authorization, in order to provide money services (including crypto). The Act describes who is eligible to register as a MSB and how the licensing process goes with FINTRAC.
The Act is frequently revised and updated, hence the importance of relying on transparent and up to date information before starting the process to obtain a crypto license in Canada.
The Act also does not dive deeply into the details of the requirements. More accurate and complete resources can be found on the website of FINTRAC. Numerous guidance directives are available directly online, which explain all the obligations of the MSB license, such as KYC rules, transaction reporting procedures, application of the travel rule, etc.
Costs and fees for a Canada MSB License
Canada’s crypto regulation is notorious for not having either registration fees, annual fees nor a minimum authorized capital.
- No fees to get the license
- No fees to maintain the license
- No minimum capital requirement
What matters to FINTRAC, the Canadian regulator, is how compliant your business is with preventing financial crimes and properly implementing risk management.
Due compliance against money laundering and terrorist financing obviously has a cost, but an experience legal partner such as LegalBison can significantly relieve the workload and cost.
Taxes
The taxation of companies in Canada depends on the company’s province of registration and its activity. The base rate at the national level is 38% of the taxable income. This rate is then diminished by a 10% federal rate abatement. An additional 13% reduction further applies.
On the provincial level, another income tax will apply to companies, depending on the province. Each province applies its own corporate taxation. The range varies between 8% (in Alberta) and 16% (Prince Edward Islands), with major provinces such as Quebec, Ontario or British Columbia applying rates of 11.5% or 12% in the case of the latter.
The effective tax rate for a Canadian crypto company will then be 15% + the rate applicable at the provincial level. For tax and regulatory purposes, all cryptocurrency transactions must be valued and reported in Canadian dollars, as cryptocurrencies are treated as commodities rather than legal tender in Canada.
Foreign Money Service Businesses are not subject to Canadian taxes.
Compliance and maintenance requirements after securing a Canada MSB crypto license
The VASP license is required for companies providing financial services using virtual assets, such as cryptocurrency exchanges and wallet services.
Crypto companies in Canada whose application is successful will receive a MSB or FMSB license for a duration of 2 years. Every 2 years, the license must be renewed. This process is currently free of charge.
The process of obtaining a VASP license includes preparing necessary documents, implementing AML/KYC measures, and submitting an application to the regulatory authority.
To renew the license, a Money Service Business must proceed to a review of its compliance documents. This review will assess that the company is compliant with the regulation, given that the Act is amended frequently and the regulation is evolving.
Proper preparation of financial statements and documentation of all audits and correspondence with clients is a mandatory requirement for VASPs and money transfer services companies under the MSB framework.
Anti Money Laundering and compliance program
This assessment checks all the AML and KYC policies and procedures in place and their good enforcement. The complexity of the assessment depends on the business and the risks associated with its activities.
In its day to day basis, a Money Service Business is obligated to enforce its AML-KYC policies and procedures. For example, identifying customers at the beginning of the business relationship, monitoring transactions in the case of an exchange and flagging the suspicious activity for review by FINTRAC, with a maximum of details.
Under Canadian regulations, VASPs must conduct regular reporting to financial and supervisory authorities to ensure ongoing compliance.
Canada enforces the Travel Rule for transactions exceeding CAD 1,000, requiring VASPs to collect and share sender and receiver information.
Common misconceptions about the Canada MSB license
No, the MSB framework doesn’t equate a Forex license. The regulated MSB activity is “Foreign exchange dealing” (e.g., exchanging CAD for USD). “Forex trading” (as in offering leveraged contracts for difference on currency pairs) is a derivatives or securities activity that falls under provincial securities regulators, not FINTRAC.
No, an external audit of the compliance program every two year is not what is required by the law. The regulation requires a compliance program that includes an effectiveness review every two years, but it does not mandate that this review be “external.” FINTRAC guidance allows this review to be conducted by either an internal or external auditor, as long as they are independent of the compliance program itself.
No, “wallet services” or “storage services” aren’t specific activities with a defined registration to FINTRAC. The law defines the regulated activity as “dealing in virtual currency,” which includes “virtual currency exchange” and “virtual currency transfer services”. The provided sources do not list “wallet services” or “storage” as a standalone MSB activity. A company that only provides storage (a non-custodial wallet, for example) would not be required to register as an MSB.
No, cryptocurrency is not legal tender in Canada. The Canadian dollar is the one fiat currency officially in use for Canadian citizens, persons or entities.
No, offering custody of crypto assets on behalf of clients doesn’t require additional registration. FINTRAC (the MSB regulator) absolutely does regulate custodial crypto exchanges, as they are clearly “dealing in virtual currency”. The requirement to also register with provincial securities regulators is a separate, parallel obligation because those regulators often consider the custodial arrangement to be a “crypto contract” and therefore a security.
What are the texts composing the legal framework of the Canadian crypto license
The cryptocurrency regulation in Canada for businesses is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of 2000, last amended in 2025. This law, published by the Minister of Justice of Canada, establishes the legal foundation of the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC. This agency is the Canadian national institution for prevention of financial crime and enforcement of AML-CFT measures.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act describes different cases of offenses by persons or entities acting with a Money Service Business license.
Pertaining to financial activities subject to the supervision of FINTRAC, the Act of 2000 details the rules and obligations of entities authorized by the Canadian regulator, with an explicit emphasis on anti money laundering and countering the financing of terrorism (AML-CFT).
The law provides a clear overview of the requirements and obligations of a money or crypto business registered in Canada. It explicitly states the obligation to register for an authorization, in order to provide money services (including crypto). The Act describes who is eligible to register as a MSB and how the licensing process goes with FINTRAC.
The Act is frequently revised and updated, hence the importance of relying on transparent and up to date information before starting the process to obtain a crypto license in Canada.
The Act also does not dive deeply into the details of the requirements. More accurate and complete resources can be found on the website of FINTRAC. Numerous guidance directives are available directly online, which explain all the obligations of the MSB license, such as KYC rules, transaction reporting procedures, application of the travel rule, etc.
FAQ - Crypto license in Canada
To start a crypto business in Canada, there are two mandatory steps. The first is the registration of a company in Canada (the Province matters for tax reasons). Then, once the company is set-up, the project should carry on a proper application to get the Money Services Business license, ticking the box saying the company will undertake crypto-related activities.
It depends on the chosen license type. But the domestic one with residency requirements is a lot better and its obtainment is far more likely. We offer and advise to register a company in Canada, but actually, any foreign company can apply for the license if they comply with all the administrations. This is rendered very difficult by the provincial nature of these administrations.
Yes! We are able to design a business plan for any kind of business venture. We have experience dealing the granting authority and we know their expectations from applicants.
Yes, this is possible, but in any ways you will have to present a certificate of no criminal record (also of a legal entity). We recommend to stick to individuals.
Yes, cryptocurrency activity is legal in Canada, under the umbrella of the Money Service Business (MSB) license. Registering as a MSB allows the provision of services related to dealing in virtual currency, which means exchanging crypto against crypto or fiat.
Dealing in virtual currency is one of different possible activities that a Money Service Business can register for. Therefore, the Canadian crypto license can legally allow for diverse business models, provided that the crypto company has registered for other activities.
If a Canadian crypto company is dealing with, or issuing, security tokens, it could potentially require compliance with the existing securities law in Canada.
Issuing an opinion from a qualified law firm can help qualify a token out of the securities regulation.
A Canadian MSB licensed crypto company can be licensed for payment services, under the condition that it registers as such to the Bank of Canada. The legal framework is described in the Retail Payments Activities Act, issued in November 2023.
Our team can better advise you if your project involves the provision of payment services with a Canadian set-up.
Domestic crypto licensed companies, the so called Money Service Business, are liable to pay corporate income tax on their revenue derived from profits generated by their crypto activity.
Foreign Money Service Business companies, which are not located in Canada, are liable to taxation in their home country (if applicable).
As the MSB framework explicitly requires its licensees to provide its services in Canada, the registration of a trademark is recommended to promote, build or protect a brand in Canada.
This service is particularly important for Foreign Money Service Businesses, which are required by law to provide their services to the Canadian market. This can be done for example by operating a “.ca” website, by opening a local representational antenna, by advertising in Canada or by serving Canadian clients from day one.
It is important to note that a trademark isn’t necessarily just a brand name. It can be for example: designs, moving images, holograms, sounds, three-dimensional shapes, colors, or a combination of these used to distinguish the services of a company.
Various elements can be registered as intellectual property in order to ensure that the project will not be imitated or embodied without legal recourse.
Start your Crypto Company in Canada Today!
Your crypto project may benefit in many ways from securing a Canadian crypto license: market yourself as regulated and gain trust from your community and from institutions, such as banking services providers.
Leave an inquiry now and talk with a legal expert, to assess the relevance of the crypto license in Canada for your specific project!
Legal experts in designing solutions for crypto licensing worldwide.
Corporate professional with over 8 years of experience in Crypto, FinTech, AI and SaaS