Challengers like EQ Bank and Wealthsimple are rolling out new and cheaper offerings, growing their base and gaining brand recognition. But experts say that rather than creating a disruptive threat to the big banks, mid-sized players are more likely to be bought up by the majors.
The growth seen with the firm's business model has led chief executive Michael Katchen to declare that Wealthsimple is the "first and only credible alternative to the big banks in Canada.” “We’re trying to make that seem like a low-risk activity for somebody so you can open a bank account while keeping your other bank account open,” said chief executive Andrew Moor.
The bank’s efforts have led to its assets roughly doubling in the last five years to some $54 billion.The jumps in size at Wealthsimple and EQ are in contrast to some others smaller players like Laurentian Bank, which has seen its assets grow seven per cent to $47.5 billion in the same time. Canadian Western Bank was seeing higher growth, up 38 per cent to $42.5 billion, but of course it’s being bought up. In the co-operative world, Desjardins has managed to grow around 43 per cent to $444 billion, not too far behind National Bank, the smallest of the Big Six, at $454 billion.