Meridian Credit Union plans to take on top Canadian banks by launching own bank
One of Canada’s ten largest credit unions, Meridian CU, is looking to launch a new digital bank and has applied for a banking licence.
“We believe, and our research shows, that there is a clear desire in the marketplace for an innovative digital bank that offers a true full-service alternative to the big banks,” states Meridian CEO Bill Maurin. He adds that Canadians want a financial institution that “is socially relevant, and treats them as individuals, with individual needs”.
Speaking to Financial Post, Maurin also said he is keen for the new bank to take on the country’s “Big Five” players – TD Bank, RBC, Scotiabank, CIBC and BMO.
“There’s not a lot of Canadian love for the Big Five banks, but we think there can be a lot of love for a Meridian version,” Maurin told Financial Post.
Meridian’s digital proposition will be available nationwide, online and on mobile. It will also have a dedicated call centre.
It will initially focus on retail customers, accepting deposits and providing loans and mortgages. At a later stage, wealth management and corporate banking services will be added.
“Unlike other digital offerings out there, we want to do that with the service offering breadth of a traditional full service retail financial institution,” Maurin says.
If the application process is successful, the new bank will open for business in 2018.
Banking Technology understands that the selection of software solutions for the bank is underway. The credit union itself is a long-standing user of the legacy Wealthview core solution, which now resides with Fiserv.
Earlier this year, Meridian signed for new SME and commercial lending origination software, Linedata Capitalstream.
The credit union emphasises that as the new bank will be fully owned by it (and hence by its members), the bank’s shares will not be publicly traded or sold.
“Like Meridian CU, it will not be hostage to quarterly earnings per share targets the way publicly traded banks are, and will therefore take a long term view in terms of how it invests to serve its customers,” the credit union states.
Ontario-based Meridian was formed in 2005 via a merger of two credit unions, Hepcoe and Niagara. It has assets of CA$14 billion ($10.9 billion) and 81 branches (another seven are to be added in 2017). It has 270,000 members and employs 1,300 staff.
Canada – the place to be
There is plenty of activity going on in Canada’s fintech space.
Integris CU, a credit union in Canada’s British Columbia, is implementing a new core banking platform from Temenos.
Laurentian Bank of Canada is also undergoing a major tech overhaul with Temenos and its T24 core platform.
Earlier this year, Equitable Bank launched a new pure-play digital subsidiary – EQ Bank – also underpinned by Temenos’ software.
Toronto-based start-up, nanoPay, which acquired the assets of the digital currency business of the Royal Canadian Mint (RCM), MintChip, in early 2016, has recently launched new digital cash.
US-based Gemini Bitcoin exchange expanded its services to Canada in early June.
Services firm Vanbex Group and payments provider NetCents Technology have teamed up to speed up the adoption of blockchain to Canadian banks.
Canada’s ATB Financial has recently sent €666.67 to ReiseBank in Germany using Ripple technology, with the transaction completing in eight seconds. The participants say this is the world’s first bank transfer using blockchain.
Payments Canada (formerly the Canadian Payments Association, CPA), the operator of the nation’s payment clearing and settlement system, has carried out a public consultation to create its “Vision for the Canadian Payments Ecosystem” report.