Credit unions beginning to embrace fintech: ‘The way Canadians use financial services is rapidly changing’

Like Canada’s big banks, lending institutions are starting to embrace ‘fintech’ – financial technology – to protect key consumer and lending businesses from upstart online challengers which use a combination of data and technology to entice customers.

British Columbia’s First West Bank and Vancouver-based Grow announced Wednesday they’ve formed a partnership targeting B.C. residents. , Northern Bank, located in Sault Ste. Marie, Ont.,  unveiled intends to build its very own fintech lending business with an account opening tool that will provide Ontario-based smaller businesses accounts with unsecured credit lines as much as $250,000.

Whether they are buying or building the ability, the financial services firms appear to agree the interest in the type of innovations provided by fintech firms is here to stay.

“The way Canadians access and use financial services is changing rapidly,” says Launi Skinner, First West Credit Union’s leader who served previous stints in senior executive positions at Starbucks and 1-800-Got-Junk.

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“Grow has built an excellent product,” she said from the fintech firm’s 24-hour online lending service that can fund approved loans in as little as a few hours, compared to days or even weeks at a traditional lender.

“We’re really looking forward to working more closely together and exploring the next wave of financial service delivery,” Skinner said.



Grow leader Kevin Sandhu, whose firm premiered this past year as Grouplend, said joining forces with First West will provide the very first chance of B.C. residents to access “on-demand and fully digitized online lending through a Canadian bank or bank.”

He said the arrangement with the bank includes a revenue-sharing arrangement, though he would not disclose the terms.

“We are interested in more than a simple referral fee or commission structure for loans that are generated as a result of the partnership,” he explained within an email, noting other such deals have been in the whole shebang.

First West Bank has more than $10 billion in assets under administration, 240,000 members, and 1,700 employees.

A report published by EY last month suggested adoption of fintech products by Canadians could triple over the next year.

The fintech wave has already been far more advanced in jurisdictions including the United States and also the Uk, 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 others take 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 company lender Thinking Capital late last year.

Postmedia Network, the parent company of the National Post, can also be involved in the space. Postmedia has applied for a strategic collaboration with online lender Mogo Financial Technologies that will see it exchange media promotion for a share of the upstart’s revenue stream.

bshecter@nationalpost.com

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