Like Canada’s big banks, credit unions are beginning to embrace ‘fintech’ – financial technology – to protect key consumer and lending businesses from upstart online challengers which use a mix of data and technology to entice customers.
British Columbia’s First West Credit Union and Vancouver-based Grow announced Wednesday they’ve formed a partnership targeting B.C. residents. On Tuesday, Northern Credit Union, located in Sault Ste. Marie, Ont., unveiled intends to build its very own fintech lending business with an account opening tool which will provide Ontario-based smaller businesses accounts with unsecured credit lines up to $250,000.
Whether they’re buying or building the capability, the financial services firms appear to agree the interest in the kind of innovations offered by fintech firms is here to remain.
“The way Canadians access and use financial services is rapidly changing,” says Launi Skinner, First West Credit Union’s chief executive who served previous stints in senior executive positions at Starbucks and 1-800-Got-Junk.
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“Grow has built a great product,” she said from the fintech firm’s 24-hour online lending service that may fund approved loans within a couple of hours, when compared with days or even weeks in a traditional lender.
“We’re really getting excited about working more closely with them and going through the next wave of monetary service delivery,” Skinner said.
Grow leader Kevin Sandhu, whose firm premiered last year under the name Grouplend, said joining forces with First West will provide the very first chance of B.C. residents to gain access to “on-demand and fully digitized online lending through a Canadian bank or bank.”
He said the arrangement using the bank includes a revenue-sharing arrangement, though he would not disclose the terms.
“We are curious about greater than a simple referral fee or payment method for loans that are generated as a result of their bond,” he explained in an email, noting other such deals have been in the works.
First West Bank has a lot more than $10 billion in assets under administration, 240,000 members, and 1,700 employees.
A report published by EY recently suggested adoption of fintech products by Canadians could triple within the next year.
The fintech wave has already been far more advanced in jurisdictions including the United States and the United Kingdom, but that hasn’t stopped it from grabbing the attention Canada’s biggest banks.
Financial institutions for example Bank of Quebec and Toronto-Dominion Bank have begun developing their own technology hubs, while some are taking tentative steps to team up with similar fintech firms challenging their traditional businesses.
Canadian Imperial Bank of Commerce, for example, entered a referral partnership with small business lender Thinking Capital late last year.
Postmedia Network, the parent company from the National Post, is also active in the space. Postmedia has applied for a strategic collaboration with internet lender Mogo Financial Technologies which will view it exchange media promotion for any share from the upstart’s revenue stream.
bshecter@nationalpost.com
Twitter.com/batpost
