Fintech demystified: Answers to questions on digital banking in Canada

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Canadian financial technology companies (fintechs) have been breaking ground for well over a decade, with some of the largest fintechs becoming household names. Yet even as the sector continues to grow, some Canadians are still unfamiliar with how they operate and what they offer. We sat down with Jeff Adamson, one of the co-founders of Neo Financial, to address their questions.

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Q: How do you define a fintech? Is it a bank?

​​A: ​Fintech is a fresh take on financial services – combining user friendly technology and finance to create a more agile, transparent and customer centric experience. While we offer bank-like services, we’re not a traditional bank; we’re a digital first platform that rethinks how you manage your money. ​​ ​​

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Q: If fintechs don’t have branches, what does customer service look like?

​​A: ​By not having a vast branch network, fintechs are able to invest more heavily into providing better digital service. Instead of needing to go into a branch, they’re able to provide customers with the self-serve tools to get the answers they need and eliminate problems from happening in the first place. At Neo we have made significant investments into cutting edge digitally enabled support through phone, chat and email.​ ​​​

With fintechs, that’s a reality. At Neo, for example, you can open an account, get a mortgage and handle all your financial needs with a computer or smartphone at home or on the go. It’s faster, more efficient and hassle-free. Innovative digital support allows the customer to manage the majority of tasks themselves. If they need to talk to someone, we have a full team of agents in Calgary and Winnipeg ready to support.

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Q: Who oversees the operation of fintechs in Canada?

A: Fintechs are overseen by a number of​ the same​ regulators​ as traditional banks​, including the, the Financial Consumer Agency of Canada and the Financial Transactions and Reports Analysis Centre of Canada, among others. These government agencies enforce consumer protection regulations, and investigate compliance to ensure confidence in our financial systems.

Q: Are my deposits with Neo insured through the Canadian Deposit Insurance Corporation (CDIC)?

A: Yes. Funds of up to $100,000 in Neo Money™ accounts (including Neo Everyday and Neo High-Interest Savings accounts) are eligible for CDIC coverage. The accounts are provided by Peoples Bank of Canada, a CDIC member institution.​ This provides our customers the same peace of mind and protection you’d expect from a traditional bank, allowing you to enjoy innovative services without compromising on safety​.

Q: What advantages do fintechs offer? Why should I consider opening an account with Neo?

A: Without the need for physical branches, fintechs have lower overhead costs and can pass those savings on to customers.​ They can also invest heavier into a more seamless digital experience.​ At Neo, we reward customers with products that save and earn them money. Our cashback offerings extend beyond regular credit cards, to our Money card (which is like a debit card) and even secured credit cards, which is unprecedented in the market. We also offer consistent and competitive interest on the Neo High Interest Savings account, not introductory rates that crater after a short period. Our Neo Mortgage product delivers a seamless experience that helps customers easily zero in on the most competitive rates. Additionally, we reinvest heavily in our security and infrastructure, and work quickly to address suggestions from our customers, often faster than any bank.

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Q: Why should I trust a fintech like Neo?

A: ​Fintechs are already widely used across Canada and around the world.​ ​Here in Canada, ​Neo has earned the trust of more than a million customers.

You can also look to the brands and businesses who trust us to work with them. All our partners, including Hudson’s Bay and Tim Hortons, have also vetted us thoroughly on issues such as cybersecurity, governance and technical reliability.

Neo adopts the most rigorous security standards, including NIST (the highest standard used by military, finance and healthcare), PCI, SOC2 Type II and more, in some cases exceeding other Canadian financial banks and fintechs.

For technical reliability, Neo currently boasts a platform uptime rate of 99.99 per cent.

We’ve also built an extensive network of more than 10,000 cashback partners nationwide, including Shell, Boston Pizza, A&W and FlightHub, who trust us to help them grow their businesses.

Q: Are fintechs such as Neo looking to replace traditional banks?

A: No, but increased competition is essential for Canadians. We believe the future of banking should see more collaboration between traditional banks and fintechs. That partnership could leverage the strength of traditional banks in back-end money management with the expertise in technology and a customer-centred experience offered by fintechs.

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Q: Large financial institutions can seem impersonal. Who’s behind Neo?

A: Neo’s co-founders — Andrew Chau, Chris Simair, Kris Read and I —are all born and raised Canadians. We’re people who’ve experienced the same frustrations you have with outdated banking systems, who wondered why banking couldn’t be simpler, more flexible, and designed around real people’s lives.

We’re also supported by a team of hundreds of talented people with diverse backgrounds and experiences alongside us, right here in the Prairies. We’re all working to build the solution we were missing — something better for us and for all Canadians.

For more information on Neo Financial, visit www.neofinancial.com.

Read more on Neo and the benefits of their cashback cards. 

Read more about how Canadian banking services compare to other countries.

Read more about Neo Financial’s founding story.

Read more on how Neo Financial created their ideal credit card.

This story was created by Content Works, Postmedia’s commercial content division, on behalf of Neo Financial.

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