Challengers like EQ Bankand 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.” There’s little sign of such switching ease coming to Canada, so competitors like EQ Bank are instead focusing on getting consumers to switch gradually.
“The nice thing about being a medium-sized bank, it’s much easier to think about bringing that kind of product innovation to the market,” said Moor. 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.Challenges for smaller players