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This Report is prepared by FinTech Growth Syndicate Inc. (FGS)
Information contained in the Report is current as of October 2019, and may not reflect any event or circumstances which occur after the date of the report. Unless otherwise mentioned, all data in this report comes from the FGS database. All queries related to the content, or to any use of this report must be addressed to Tyler Anderson, Chief Operating Officer, FinTech Growth Syndicate Inc. While putting together the report, FGS has made every reasonable attempt to ensure that the information herein has been obtained from quality and reliable sources. While every effort has been made to offer current and accurate information, errors can occur. FGS is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this report is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results and conclusions obtained from the use of this information. Given the changing nature of FinTech there may be delays, omissions or inaccuracies in the information contained in this report. In no event will FGS or its partners or employees be liable to you or anyone else for any decision made or action taken in reliance on the information in this report or for any consequential, special or similar damages, even if advised of the possibility of such damages.
Disclaimer
02. FinTech Growth Syndicate | Your opportunity to build member solutions
What is happening with Incumbents?The market in Canada is changing faster than we can see. With so many new players in the space, both competitors and technology solutions, incumbents have to move fast to stay relevant. The “deposit account” or the “mortgage” has been the anchor to keep a member. Soon, choice, convenience and experience will be the new anchors. FinTech accounts for 7% of Canada’s GDP and 800,000 Canadian jobs.1 Large, trusted incumbent brands like DUCA, Alterna, Vancity and Meridian are acknowledging this change with banking licenses, digital only solutions, and new business models. But we can’t discount unlikely competitors who have our attention on our mobile devices: the Tech Giants.
1 Government of Canada, 2018
Tech GiantsCredit Unions Startups Other Incumbents
2019
Future
Credit Unions competing in the market today with disruption in progress.
Credit Unions playing a smaller role in the market place because of the new entrants in the space.
In the Credit Union space, we can see the marketplace being disrupted by players such as:
Analyzing the disruption
Tech Giants
Tech Giant entrants such as Apple, Amazon and Facebook already have large customer bases, and are leveraging their loyal customer base to expand into financial services.
Startups
Startup entrants like STACK, Dialogue, Owl.co, and Expensify identify everyday customer/member pain points and are providing answers to new disruptive solutions.
Other Incumbents
Other less likely incumbent competitors with technology, products and current customers, like Loblaws, Intuit, Mastercard and Interac can expand to new markets and launch financial products to overlap with yours.
03. FinTech Growth Syndicate | Your opportunity to build member solutions
Member problems are not being solved by legacy services.
Chequing Account
What are the other services that your members need?
Savings Account
Mortgage
Investments
Insurance
Personal Loans
Current Credit Union services
04. FinTech Growth Syndicate | Your opportunity to build member solutions
People need more than just a chequing and savings account. As new entrants enter the space, more services are becoming available that address your members' pain points. One key differentiator between the established Credit Unions and new entrants, is the notion of trust. Credit Unions have built brand trust, relationships and membership loyalty. But FinTechs and new entrants are building products quicker than Credit Unions.
If you are a Credit Union in Canada, it is more important than ever to innovate: partner or build solutions to tackle your members’ pain points or risk losing them to Challenger Banks. Whether you choose to innovate internally within your organization, build an external innovation lab or simply find an innovation partner.
“I hate having to worry about FX fees when I’m traveling.”
Your members have the answers to your disruption.
“I want an easy and convenient way to track my spending.”
“I wish I could just lock my card myself when I lose it. I hate calling the bank everytime.”
"My friends are using digital apps to pay for things. And getting rewarded! I want that too!"
05. FinTech Growth Syndicate | Your opportunity to build member solutions
Who is contributing to the
disruption?
Incumbents
Regulation
Competition
AI & Data
Startups
TechGiants
Digital
FinTechs
A Challenger Bank is a financial technology company that offers banking services, only through digital channels, without any physical branches. Most Challenger Banks rely on a financial institution partner or obtain a new banking license to conduct transactions. In Europe, digital banks like Monzo and Revolut, have been granted banking licenses, and are playing on the same level as the big established banks. This wave of digital banks offer innovative products that solve for current financial pain points, offering frictionless experiences and new revenue-generating business models. A few of their select products/features include: no foreign exchange fees, free chequing and savings accounts, budgeting tools and spending rewards.
The banks we have listed to the right are not all "real" challengers. Some are not digital only and don't offer more relevant and personalized products. Having a digital or mobile offering is table stakes.
Types of Challenger Banks:
Beta: Using parent banking licence
New: Secured a new banking licence
Neo: Don't have their own banking licence, but have a partner who does
Non: Use a payments licence
Canada's Challenger Banks.
Looking for more information on who the players are in these categories and what they mean?
Open our Challenger Bank report >
07. FinTech Growth Syndicate | Your opportunity to build member solutions
Who is building member-centric
solutions?As the market continues to be disrupted, the ability to understand the experience and pain points of your members will increasingly become a differentiator. Today, the solutions provided by legacy companies are failing to solve member problems.
Credit Unions are making good strides and are poised for partnering, marketplaces and to grow their member base with a focus on digital.
Innovators
Accelerators
Tech Giants
Incumbents
ChallengerBanks
Members
Startups
FinTechs
Your members are using new services to solve their pain points.
Current Credit Union services Select additional services being used
Please note: This graphic does not provide the full picture of FinTechs, this is just a sample. *Legacy Credit Unions are branch based.
Split the bill
Digital Wallet
Accounting & Expensing
Perks & Payments
Budgeting
24/7 Access*
No FXFees
Investing
Chequing Account
Savings Account
Mortgage
Investments
Insurance
Personal Loans
09. FinTech Growth Syndicate | Your opportunity to build member solutions
STACK noticed that there are parts of Canada where people have limited access to physical bank branches. To solve this problem, STACK identified Canada Post as the common player present in the most remote areas of Canada; 98% of Canadians have a postal outlet within 15km, 88% have it within 5km and 78% have a postal outlet within 2.5km.2
STACK established a partnership with Payment Source, which now allows Canadians to add additional funds at any of the over 6,000 Canada Post outlets. In comparison, Credit Unions have only 2,890 branches across Canada, which limits their access to potential new members located in remote non-urban areas of the country.
Case Study:
Welcome STACK
Savings Account
Budgeting Tools
Digital Wallet
Bill Split
Globally Accepted
No Monthly
Fees
Everyday Rewards
No FX Fees
No ATM Fees
Current Credit Union services
STACK additional services
STACK overlap of services
Line of Credit
Mortgage
Chequing Account
2 Canadian Postal Service Charter, 2019
10. FinTech Growth Syndicate | Your opportunity to build member solutions
Case Study:
Welcome ExpensifyFor most organizations, managing expenses is a tedious task, with a painful reporting process. Archiving and storing physical copies of the receipts of all business expenses is an inefficient use of company resources. Expensify saw this problem as an opportunity to create a user-friendly and easy to use receipt management application platform. Their solution can be used by anyone in an organization, resolving the traditional consumer pain points of receipts and manual entry of expenses on a spreadsheet. Expensify reports can be exported and integrated with all major enterprise accounting packages and integrates direct deposit.
Having expense management tools for every business is essential. Business owners who are members of Credit Unions would have an enhanced experience if tools were offered as part of account integration.
Savings Account
Corporate Cards Mgmt.
Real-time Expense Reports
Automated Receipt
Scanning
Client Based Reporting
Line of Credit
Current Credit Union business services
Expensify additional services
11. FinTech Growth Syndicate | Your opportunity to build member solutions
Challenger BankParent Company
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Accelerate Financial Crosstown Civic Credit Union X X X
Achieva Financial Cambrian Credit Union X X X
ATB Brightside ATB X X X X X
Brim Financial X X X X X
Canadian Tire Bank Canadian Tire X X
Coast Capital Savings Coast Capital Savings Credit Union X
CS Alterna Bank Alterna Savings & Credit Union X
EQ Bank Equitable Bank X X X
Every Financial X X X
Hubert Financial Sunova Credit Union Ltd. X X X X X
Implicity Financial Entegra Credit Union X X
Koho X X X X X X
Mogo X X X X X X X X
1. Digital Only Bank2. Consumer Account3. Business Account4. Debit Card / Pre-Paid Card5. Credit Card
6. Personal & Consumer Loan7. Mortgage8. International Money Access9. Other Savings & Investment Options
(GIC, Tax free savings account, etc.)
10. Rounding Your Saving 11. Expense Management & Budgeting12. Remittances13. Insurance14. Bitcoin - Buy & Sell
Neo Bank
Beta Bank
New Bank
Non Bank
Types of Challenger Banks
Challenger Bank Product Categorization tool
Challenger Bank Parent Company 1 2 3 4 5 6 7 8 9 10 11 12 13
Motive Financial Canadian Western Bank
X X X
Motus Bank Meridian Credit Union X X X X X X X
NorthOne X X X X
Oaken Financial Home Bank, powered by Home Trust Company
X X
Outlook Financial Assiniboine Credit Union
X X X
PC Bank Loblaws X X
Relay X X X
Revolut X X X X X X
Rogers Bank Rogers X X X
Simplii Financial CIBC X X X X X X X X X
STACK X X X X X X
Tangerine X X X X X X
Vancity Community Investment Bank Vancity X X
1. Digital Only Bank2. Consumer Account3. Business Account4. Debit Card / Pre-Paid Card5. Credit Card
6. Personal & Consumer Loan7. Mortgage8. International Money Access9. Other Savings & Investment Options
(GIC, Tax free savings account, etc.)
10. Rounding your saving 11. Expense Management & Budgeting12. Remittances13. Insurance14. Bitcoin - Buy & Sell
Neo Bank
Beta Bank
New Bank
Non Bank
Types of Challenger Banks
Challenger Bank Product Categorization tool
How do I start building products for my
members?
Business Model Canvas
Innovation
Teamwork
Member Feedback
Pains & Gains
Testing
Partnerships
Value Proposition
Trying to figure out where to start? blueHelping Credit Unions build products their members want, we know the first step to finding answers to these gaps is research. If you are in financial services, use the Challenger Bank Product Categorization tool to start mapping out what your current offerings are, identify your members' needs and fill in the gaps.
Below is an example of where to start:
Your organization has identified that one of their gaps is “Expense Management and Budgeting”, refer to our Challenger Bank Product categorization tool to assess gaps in service. In order to build out the product, you need to have a vision for what the new product or service would look like. The end goal is to build a product or service that considers the needs of the member throughout the process; a product or service that is desirable, feasible, and viable.
The end goal is to build a product or service that considers the needs of the customer throughout the process; a product or service that is desirable, feasible and viable.
"Build?"
"Can someone help me build a
product?"
Let us help you answer all of these questions.
"What type of product should I
build?"
"Partner?"
"Who is the right partner?"
"How do I know what product to
build?"
"I have all this information and ideas, so where do I start?"
NY
"When do I go to my members?"
15. FinTech Growth Syndicate | Your opportunity to build member solutions
Use Case: Expense Management & Budgeting blue
Reach out to your members to find out what type of expense management and budgeting tools they would want you to offer and what tools they are currently using.
Tools you can use to gather customer insights: Surveys, interviews, intercepts, pop-up booths at a branch.
Build a list of the priority features and align which ones are essential for a minimal viable product.
Tools: Strategizer’s Value Proposition Canvas and Business Model Canvas.
Design and create a rapid prototype that puts it in your members’ hands.
Tools: Use online tools from InVision prototype to build a working wireframe without allocating financial resources.
Test with members for desirability and look for partners who can accelerate any development or technology gaps.
Tools you can use to gather member insights for the prototype: Surveys, interviews, intercepts, launch a tester website, pop-up booths at a branch.
Continue to test and launch product when ready.
Step 1
Step 2
Step 3
Step 4
Step 5
16. FinTech Growth Syndicate | Your opportunity to build member solutions
What we do...
FinTech Growth Syndicate (FGS) is your FinTech Innovation partner. We work with you to create digital products or services, transform your team, and empower your business. As your innovation partner, we work with you fill the gaps to design customer-centric solutions. We help you:
Build for tomorrow.
We are not afraid of jumping into open waters. Our team helps you understand the challenges in your industry and those specific to your company/organization. We work with you to test and validate solutions, and design the roadmap for launching a successful product.
Tap into the ecosystem.
Our team looks at the entire FinTech ecosystem when approaching an assessment, deep-dive or strategy. Why? We believe in partnering. We layer partnerships with companies looking to innovate, visionary startups, entrepreneurs, and others, to enable you to build fast, validated products and services.
Are you looking for new opportunities in your market, a way to work with FinTechs or how to build a new product or solution?
Send us a [email protected]
We define + create & inspire
17. FinTech Growth Syndicate | Your opportunity to build member solutions
FinTech Growth Syndicate (FGS)
220 Yonge St #215
Toronto, ON M5B 2H1
(613) 854-6949
www.fintechgrowthsyndicate.com
