A new challenger is hoping to shake up the personal finance market in Canada, launching a credit card without an annual fee and a savings account.
Neo Financial, the group backed by venture capitalists Harvest Partners, is to launch its initial proposition, in pilot phase, to residents of Calgary, Alberta.
The company’s staff includes former employees of Tangerine Bank, Bank of Montreal and Boston Consulting Group among others.
Andrew Chau, co-founder and chief executive officer of Neo Financial, said the company was created to bring innovation and choice to consumers, noting that Canada has historically been a country where the “Big Five” banks own around 90 per cent market share.
Last year, EY’s Open Banking Opportunity Index ranked Canada behind the UK, China and the US in terms of its “readiness for adoption” of Open Banking. The country was judged to be mid table for fostering innovation but ranked lowest for “adoption potential”.
“Today, with just the push of a button, we can hail a ride, have hot food delivered or stream our favourite show on demand, yet, the innovations we see in these industries and around the world have failed to translate into everyday banking,” Neo’s Chau said.
“This gap is an opportunity to reimagine how spending and savings should be, and we’re building Neo from the ground-up using today’s technology to give Canadians the most rewarding experience.”
Neo members will have access to instant rewards from hundreds of brands on one card, accessible to all Canadians regardless of income or credit rating.
The company has also partnered with an, as yet, unnamed Canadian bank to offer a savings account with a competitive interest rate, without promotional periods or minimum balances.
In the announcement, the company said that its waiting list now is in the thousands, with hundreds of brands and local stores signing up for the launch.