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A-Z list of digital banks

Scroll down for an A-to-Z list of reviews on challenger banks and financial apps in Canada.

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Stacie Hurst

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Jaclyn Hurst

What is a digital bank?

Digital banks—also known as challenger banks or direct banks—operate entirely online and are designed to be cheaper and more flexible than traditional banks.

Ultimately, the aim is to compete with the big banks like TD Bank, CIBC, RBC, Scotiabank and BMO. In response, some big banks have actually created their own digital banks to keep customers and profits from leaking away to competitors.

For example, Tangerine is owned by Scotiabank, CIBC owns Simplii Financial and Motusbank is a subsidiary of Meridian Credit Union.

Most digital banks were founded in the decade following the 2008 global financial crisis. The number of digital banks in Canada is small but growing, steadily gaining ground in a market dominated by financial industry giants.

Tangerine logo
EQ Bank logo
KOHO logo
motusbank logo
CI Direct Investing logo
Simplii Financial logo
Neo logo
Alterna Bank logo
Revolut logo
Oaken Financial logo
Intuit Mint logo
Stack logo

Are challenger banks “real” banks?

“Challenger” is used generally to refer to challenging the market power of traditional banks. Not all challengers are banks. According to Canadian regulations, challengers and digital banking apps need a full banking license to use the term “bank” in company branding and marketing materials.

Tangerine and EQ Bank are chartered (licensed) banks that offer a suite of everyday banking products. But apps like Mint and KOHO offer a narrower range of products that target more specific financial needs. Such apps compliment—but aren’t necessarily a substitute for—the institutions you use for everyday banking.

List of digital banks and financial apps in Canada

NameTypeOwned byEstablished
motusbankBankMeridian2018
EQ BankBankEquitable Group2016
TangerineBankScotiabank1997
Oaken Financial (trademark of Home Bank)BankHome Trust2013
Simplii FinancialBankCIBC2017
ManulifeBankThe Manufacturers Life Insurance Company1993
President’s Choice BankBankLoblaw Companies1996
Outlook financialBankAssiniboine Credit UnionUnknown
Wealth OneBankPrivately owned2016
Achieva FinancialBankCambrian Credit Union1998
LBC Digital BankBankLaurentian Bank of Canada2019
Alterna BankBankAlterna Savings and Credit Union2017
Motive FinancialBankCanadian Western Bank1984
KOHOMobile appPrivately owned2014
MogoOnline platform and mobile appPrivately owned2003
MydohAppRBC2020
Neo FinancialOnline platform and mobile appPrivately owned (partnered with mastercard, ATB Financial and Concentra Bank)2019
NorthOne Business BankingBusiness bankPrivately owned2017
Revolut (coming to Canada soon)AppPrivately owned2015
StackAppPrivately owned (partnered with Peoples Trust Company)2017
WealthsimpleOnline investment management platform (not a bank, but offers a hybrid savings/chequing account, business accounts and retirement products)Power Corporation of Canada2014
Nest WealthOnline wealth management platformPrivately owned (National Bank of Canada holds a minority stake)2014
CI Direct Investing (formerly WealthBar)Online investment platform (offers a High Interest Savings Account and investment solutions)CI Financial2014
Moka (formerly Mylo)AppMogo2017
AcceleRate FinancialOnline credit unionAccess Credit Union2010
Hubert FinancialOnline savings platform and appSunova Credit Union2010
Implicity FinancialOnline platform and appEntegra Credit UnionUnknown
MintAppIntuit2006
CST SparkOnline RESP providerCanadian Scholarship Trust Foundation2018
RBC NOMIDigital savings accountRBC2017
Emma appAppPrivately owned2018 in London (available in Canada in 2019)
AmpliAppRBC2019
Wallet by BudgetBakersAppPrivately owned2010
Samsung PayDigital walletSamsung2015 (available in Canada in 2017)

A-Z list of digital bank and financial app reviews

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Are digital banks cheaper than traditional banks?

Challenger banks can afford to slash fees, because of financial technology (Fintech) that makes it possible to perform many everyday banking functions without leaving your home or dealing face-to-face with bank representatives.

Usually, there are no physical branches. Instead, customers access accounts, manage their money and contact customer service representatives through mobile apps, online banking, phone, text messages and email.

With very low overhead costs, many challenger banks are able to offer zero monthly account fees, low-cost international money transfers, free domestic transfers and low-fee investment options.

Are digital banks safe?

All banks operating in Canada must be licensed by the federal government. Such licensed banks are referred to as “chartered banks” and are subject to the following:

  • Bank Act. Chartered banks are subject to the federal Bank Act, which has 3 main goals: protect customers’ savings, protect cash reserves and promote competition to reinforce the efficiency of Canada’s financial system.
  • OSFI. All domestic and foreign banks operating in Canada are regulated by the federal Office of the Superintendent of Financial Institutions (OSFI), which supervises federally-regulated financial institutions and pension plans.
  • FCAC. The Financial Consumer Agency of Canada (FCAC) protects consumer interests by enforcing protective measures and educating consumers about their rights and how to manage money.
  • FINTRAC. Federally-regulated financial institutions must comply with policies outlined by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) that are designed to prevent money laundering, terrorist financing and fraud. Suspicious transactions must be reported, and, if necessary, relayed to the appropriate law enforcement body for further investigation.
  • CDIC. The Canada Deposit Insurance Corporation (CDIC) protects customer deposits up to $100,000 per customer per institution. In the event a bank fails, depositors won’t lose all their savings. Coverage applies to chequing accounts, savings accounts, foreign currency accounts, GICs, mutual funds, ETFs and even cryptocurrency accounts.

Non-chartered financial companies aren’t necessarily bad or unsafe. However, you won’t receive the same level of protection that you would with a federally regulated financial institution.

Challenger banks know that security is a big concern for customers. Measures that are typically taken to protect customer data include data encryption, two-factor authentication, SSL certificates, strong password requirements and constant fraud monitoring. Before opening an account, check with your digital bank to see what security measures it has in place.

Advantages and disadvantages of digital banks

  • Good deals and low fees. Compared to traditional banks, challenger banks don’t have tons of customers. You may therefore find great rewards, super low fees and quick applications in an attempt to attract more clients.
  • Tech savvy. Traditional banks are sometimes criticized for struggling to keep up with the latest financial technology. Digital banks excel at offering user-friendly apps and convenient ways to handle your money.
  • Simple and straightforward. Traditional banks are often associated with wait times, paperwork and bureaucracy. In an effort to one-up the competition, digital banks work hard at “trimming the fat” off bank processes and functions, making it relatively easy to sign up for an account.
  • Little or no physical branches. If you pick an online-only bank, you can’t just pop into a branch and speak to a representative. You’ll have to settle with phone, email or live chat options.
  • Can be very specialized. Big banks a range of accounts, credit cards, mortgages, loans and investment products under one roof. Many digital banks offer a narrower range of products and services, although this is gradually expanding.
  • Not good for managing physical cash. If you handle cash regularly, you’ll have a hard time making deposits and withdrawals to a digital bank account.

Is challenger banking right for you?

Ask yourself these questions to get an idea if a challenger bank can meet your needs:

  • What products or services are you looking for? Do you need an account for everyday banking, a retirement savings account or maybe a loan? Challenger banks and financial apps are often specialized, so look for one that offers what you need.
  • Do you handle cash often? Not all challenger banks offer access to ATMs, and those that do may have limits on withdrawals. You’ll have to deposit your cash into an electronic account first before you can access any online money management functions.
  • Do you travel a lot? Some digital banks offer great options for frequent travelers. These include multicurrency accounts, competitive foreign exchange fees and cheap international money transfers.
  • Do you like online and mobile banking? If you prefer to speak with bank reps in-person, then a digital bank may not be your best option. But if you’re comfortable with managing your money online or through a mobile app, then a digital bank could be what you’re looking for.

Compare popular digital banks and money management apps

Name Product Interest Rate Promotional Interest Rate Min. Bal / Min. Deposit Account Fee
EQ Bank Savings Plus Account
EQ Bank Savings Plus Account
1.25%
N/A
$0 / $0
$0
Enjoy zero everyday banking fees, free transactions and no minimum balance with a Savings Plus Account from EQ Bank.
Go to site
More Info
Neo Financial High Interest Savings Account
Neo Financial High Interest Savings Account
1.30%
N/A
$0 / $0
$0
Get a competitive interest rate and unlimited free transactions with no monthly fees or minimum balances.
Go to site
More Info
KOHO Earn Interest
KOHO Earn Interest
1.20%
N/A
$0 / $0
$0
Opt into earning interest for free and earn 1.2% on your entire balance in KOHO plus an additional 0.5% in cash back on every purchase you make.
Go to site
More Info
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  1. Global Legal Insights: Banking Laws and Regulations 2021
  2. Canada Deposit Insurance Corporation accessed on 25 August 2021

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