Thanks to the advent of digital technology, consumers can use their computers and mobile devices to do just about anything, including their banking.
In the world of banking, ‘challenger banks’ are making use of technology to connect consumers to their banking products to make money management as hassle-free and convenient as possible.
Today, there are several challenger banks for Canadians to choose from, each offering its own set of banking products that can be managed remotely from any internet-connected device.
A challenger bank is a smaller financial institution that is designed to offer consumers an online-only banking experience. By interacting on a digital platform, consumers can do much of their banking online via a laptop or smartphone.
Challenger banks were given this name because they challenge traditional banks in terms of the services offered. Consumers are given more options to manage their money with a challenger bank rather than having to visit a physical branch.
These “fintech” banks are changing the banking industry. Conventional banks face more competition thanks to the presence of challenger banks as they compete for clients. Anyone looking for a more convenient way to do their banking may find a challenger bank a viable option to consider.
EQ Bank is an online-only bank and a trademark of Equitable Bank, a Canadian Schedule I Bank established about 50 years ago. They are an entirely online platform that offers a variety of personal banking services including a:
No matter what your saving goals are, EQ Bank can help you reach them with any one of their savings accounts. With no fees, no minimum balance requirements and one of the highest interest rates (1.50%*), you can get the most out of your money.
*Interest is paid monthly and calculated daily on the total closing balance. Rates are subject to change without notice
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If you’re into Bitcoin, then MOGO may be something to consider banking with. MOGO is a Toronto-based online banking firm that offers a number of banking options to help Canadians better manage their finances.
MOGO products include the following:
Motusbank is one of Canada’s newest online-only banks, having been established by Ontario-based Meridian Credit Union in 2019. The bank offers a full suite of banking products that can be accessed entirely online, with no physical branches available.
Considering the fact that Motusbank is a new player in town with no brick-and-mortar locations, its list of products is rather impressive and includes the following:
Tangerine is one of the original digital banks in Canada and among the most well-known. The firm was founded on the basis of providing Canadians with an alternative to traditional banking and initially operated under the name ING DIRECT. Eventually, the company was acquired by Scotiabank, with a name change to follow.
Tangerine offers a full suite of banking products that you’d see at any traditional bank, making it one of the few online banks to do so. Consumers can access the following products at Tangerine:
Brightside is the online arm of ATB Financial, an Alberta-based baking firm that serves Albertans. As an online-only banking app, Brightside was only recently established in 2020 as a means for ATB to deliver a digital banking experience to its customers.
Right now, Brightside offers the following banking products:
KOHO was established to help Canadians get a better handle on their spending and finances while making money management more convenient. Through the KOHO app and prepaid credit card, consumers can work towards getting a handle on their credit card balances, saving money, and avoiding sky-high interest rates that typically accompany traditional credit cards. Furthermore, users will earn 0.5% cash back on all purchases made using their KOHO prepaid credit card.
KOHO offers the following products:
Another newer online-only bank in Canada is Neo Financial, which offers digital banking products to make banking as easy and convenient as possible. The banking entity was developed by the co-founders of food delivery service SkipTheDishes and offers a couple of banking products, including the following:
There are several reasons why more and more Canadians are making the switch to challenger banks:
While there may be a few perks that come with banking through a challenger bank, there are a handful of drawbacks to consider as well:
Challenger banks have changed the way we do our banking and have challenged traditional banks to keep up with their digital offerings. These days, Canadians have several challenger banks to choose from, each one offering its own set of banking products. If you’re more prone to doing your banking predominantly online, then perhaps making the switch to a challenger bank may make sense.
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Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
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