Imagine a bank with no physical branches, overhead costs, clunky legacy technology or arbitrary fees. Sounds pretty good, right?
Three tech entrepreneurs from the prairies think so too and they’ve launched a new financial technology (FinTech) company to help Albertans – and other Canadians too – keep more of their hard earned money through a new app-serviced banking and credit card model called Neo Financial.
Neo operates a credit card (through MasterCard) with no annual fees and a plethora of cashback rewards that apply to local businesses across Canada. There’s also a savings account with no monthly fees and a high-interest rate at 1.7 percent (in late-2020, most big banks offered a rate closer to 0.05 per cent).
“Our start-ups play a significant role in Calgary’s continuing shift towards a digital economy as we empower smart people with big ideas that solve some of the world’s greatest challenges as well as new ways to finance them.” —Mary Moran, president and CEO of Calgary Economic Development
The new FinTech company is the brainchild of Andrew Chau, CEO; Jeff Adamson, head of partnerships; and Kris Read, head of engineering. Chau and Adamson were co-founders of the ever-popular SkipTheDishes app that provides online restaurant ordering and delivery, and Read is a seasoned tech and software expert who has long been embedded in the Calgary tech ecosystem. The three co-founders came together to put their innovative brains to work in the hopes of revolutionizing banking the same way SkipTheDishes did with food delivery.
“We think Canadians deserve to expect more from their bank and a digital experience,” says Chau. “They want their bank to look and feel like the user-friendly apps they love — think Spotify, Netflix and the like.”
FinTech companies are everything from mobile apps and crowdfunding platforms to cryptocurrency exchanges, and a niche of the tech community that’s rapidly growing in Alberta. The provincial government estimates that $1.1 billion will be spent in Alberta on the digital transformation of financial services by 2022 and there are several FinTech start-ups that are already proving it will be money well spent.
“Calgary has long been one of the big four financial centres in Canada and it is a city with a concentration of capital-intensive companies where large deals are made. It makes sense that FinTech would flourish and that the start-up community would embrace ground-breaking advances like blockchain and cryptocurrency,” says Mary Moran, president and chief executive officer of Calgary Economic Development.
Calgary’s already home to companies such as Celero, a provider of integration and payments solutions to credit unions and financial institutions across Canada; Helcim, a company providing payment solutions for businesses; and Symend, a debt recovery service that combines behavioral science and advanced analytics for dealing with at-risk customers.
“Our start-ups play a significant role in Calgary’s continuing shift towards a digital economy as we empower smart people with big ideas that solve some of the world’s greatest challenges as well as new ways to finance them,” Moran adds.
Digital banking platforms differentiate themselves to customers through higher than usual earn-back interest rates and low or zero fee programs. With Neo, the reward system is another differentiator, which allows Canadians to earn credit with local businesses, such as restaurants, coffee shops and grocery stores.
“We have over 15,000 businesses signed up, and we are growing by a few hundred every month. For our partners, what they get is the ability to compete with the large incumbents,” Chau says. “Think about existing programs like Starbucks Rewards or PC Optimum — these are huge and expensive rewards programs to operate, and that is not an option for a small business to provide.”
“With Neo,” he adds, “we are democratizing technology and giving that to small businesses and customers of those businesses.”