EQ Bank
Modernizing the Core with the Cloud
Toronto, Canada
At a Glance
• Immediate post-cloud growth in customer base of 100% year-on-year, and 400% in transactions.
• First bank in Canada to go front-to-back in the public cloud.
• Updates and new features now released x50 per month vs one every 2 months at launch.
• Named ‘Best Bank in Canada’ for two consecutive years.
EQ Bank launched in 2016 with a groundbreaking vision. As one of the first digital-only banks in Canada, the bank aims to reimagine how customers interact with their financial services provider, offering a smarter and more flexible alternative to the complexity and hassle of traditional banking. In less than a decade it has grown to service half-a-million consumers, and has recently expanded into business banking.
Daniel Broten, SVP and Head of EQ Bank, explained: “We’re on a mission to change the status quo, with banking services that enrich the lives of our customers. As a digital-only bank, we have a major advantage over traditional banks, as we don’t have to maintain branches and therefore have more resources available to provide customer-centric services at the best possible rates.”
Meeting evolving customer demands
For EQ Bank, responding to rapidly-changing customer expectations is today’s biggest challenge. Consumers increasingly expect their financial services provider to deliver everything from faster payments solutions and more flexible lending services to user-friendly budgeting tools and much more, all available at the touch of a button. Thankfully, innovation and agility is built into the DNA of EQ Bank.
“We are always looking to react quickly to customer feedback and bring to market more innovative services,” said Daniel. “For example, we are creating frictionless digital journeys to allow users to open joint accounts in just a few clicks that would normally involve cumbersome paperwork and often a couple painful, in-person visits to a branch.”
Born to grow
In 2016, EQ Bank used an on-premises deployment of Temenos Core Banking to support its launch. The core platform proved a crucial component in the early success of the bank, providing the tools for real-time transaction processing and digital product development. Customer deposits rose rapidly, reaching more than 100 million Canadian dollars in the first few weeks. To manage the next stage of its growth journey and handle rocketing volumes of customer transactions, EQ Bank evaluated the smartest way to scale its infrastructure.
“We realized that a cloud-first model would unlock benefits in terms of scalability, reliability, and security,” added Daniel. “Plus, we knew the cloud would help with product development and give us more time to think about digital innovation rather than infrastructure management.”
EQ Bank was also keen to extend its strong commitment to environmental, sustainability, and governance (ESG) issues into its IT strategy.
Our ESG program is an important part of our business. We aim to do as much as possible to reduce our carbon emissions, and a move to the cloud would help meet our goals.”
Daniel Broten, SVP and Head, EQ Bank
Transitioning to a flexible cloud model
In 2019 EQ Bank decided to deploy an updated version of Temenos Core Banking running on the Temenos SaaS. The move provided the performance, scalability, and agility needed by EQ Bank to manage ongoing customer volumes—and made the bank one of the first in Canada to use a core infrastructure fully-hosted in a public cloud environment.
Daniel explained: “As we had used Temenos Core Banking for several years, transitioning to the SaaS version was the natural choice. Being able to host the systems on Microsoft Azure in our local region was another big advantage.”
Working closely with Temenos, EQ Bank completed the upgrade of Temenos Core Banking and the migration to Temenos SaaS in just 12 months.
“The support from Temenos accelerated the changeover, and because we run the systems with minimal customizations it minimized any complexity. Our learning curve on the Temenos SaaS was quick and easy.”
More recently it has added Temenos Payments Hub (TPH) and Temenos Data Hub (TDH) to its stack.
Creating enhanced digital services
Development speed has been one benefit of its move to cloud. “Ten years ago, we were releasing new features about every two months. Last year, we got that up to 30 every month, and this year, we peaked at 50 per month.”
With that capability, EQ Bank is now rolling out some of the most innovative digital banking services available in Canada. In the near-term, it will publicly launch its first fully digital business account, designed to meet the unique needs of Canadian small business owners, with open banking and real-time payments in scope.
And as part of its inclusion policy, it has created customized onboarding journeys to help indigenous Canadians to access financial services. Similarly, EQ Bank has launched a new low-cost, multi-currency money transfer service through an integration with leading payments provider Wise.
Daniel continued: “Setting up the integration between Temenos Core Banking and Wise was very simple. We quickly and efficiently connected all the debit, credits and payment types needed to allow our customers to make transactions. And we could do this without having to recode any APIs. Using the Temenos SaaS has made it easy for our teams to design, develop and launch new products.”
More recently, it has developed the ‘TDH-EQB Fabric’ environment, an innovative solution enabling near real-time data access within the Temenos Data Hub. The initiative (a collaboration between EQ Bank, Temenos and Microsoft) has already had a profound impact by enabling access to key transactional data within less than 60 seconds; reducing load on the live Temenos Core database by offloading queries for historic and archived transaction data; accelerating operational decision-making by enabling near real-time intraday reporting; and establishing a scalable pipeline to support regulatory reporting.
Daniel commented: “The TDH-EQB Fabric is empowering EQ Bank with faster insights, improved system performance, and a more agile digital ecosystem—all crucial for enhancing the experience we give customers and meeting our regulatory obligations.”
These new capabilities are now powering the bank’s exploration into AI. For Daniel, AI is a natural extension of what the bank has been focussed on since it launched. “We always strive to create highly personalised experiences for each customer. That’s important at the onboarding stage for a new customer, when you really have to build for trust. The more we can show we know about them as a person, the more intimate and trusting the experience for them. The combination of good data and AI are a massive opportunity to create these moments.”
Reaching even more customers
The switch to the Temenos SaaS enabled EQ Bank to manage the rapid growth in demand for digital banking during the Covid pandemic. There was an immediate post-cloud growth in its customer base of 100% year-on-year, and 400% in transactions.
It has sustained that growth, with customer numbers increasing by 10-15% each year, and transactions by around 40%. That has been enabled with TPH but also TDH, and points to the benefits of having a single platform with broad capabilities. “Fraud management and risk mitigation on those payments is another key area where we want to have really good controls and a good synchronous way of being able to decline or stop payments before we have issues with them.”
Today EQ Bank remains Canada’s only true challenger bank and is the digital platform of Equitable Bank, seventh-largest bank in the country by assets.
The flexibility and resilience of the Temenos solution has been vital to our ongoing growth. We simply would not have been able to accommodate such rapid customer growth without the elastic scalability of the cloud.”
Daniel Broten, SVP and Head, EQ Bank
The innovative new services launched by EQ Bank have gone down extremely well with consumers. So much so EQ Bank has been named to the prestigious World’s Best Banks list by Forbes Magazine for five consecutive years.
Building a more sustainable business model
Adopting the cloud model has also helped EQ Bank to achieve its sustainability goals. Moving away from an on-premises core banking infrastructure has allowed EQ Bank to reduce power consumption within its data center, cutting carbon emissions and helping to minimize its impact on the environment.
Daniel commented: “We are very proud of how the cloud helps us to reduce our carbon footprint. We can monitor our cloud resource consumption closely, and ensure that we are using server configurations and processes that optimize performance and energy-efficiency.”
Laying foundations for future success
With a state-of-the-art, cloud-based core banking infrastructure, EQ Bank is well-placed to connect with partner ecosystems and to thrive when open banking reaches Canada.
Daniel explained: “Having such extensive API capabilities with Temenos core banking and the Temenos SaaS puts us in a strong position to develop more integrations with fintechs and to share data securely with third-party providers. These will be essential points both to comply with open banking regulations and to seize the commercial opportunities that the new model will create.”
Moving forward, EQ Bank is keen to continue the alliance with Temenos, including serving as a member of the Temenos Ambassador Program. This enables the bank to join seminars on industry trends, provide feedback on capabilities and functionality, and to influence the roadmap for new releases of Temenos solutions.
“Temenos is a fantastic partner to EQ Bank and has been integral to our rise as one of the most successful and innovative operators in the Canadian retail banking space. We are looking forward to the additional benefits we will unleash from Temenos Data Hub and Temenos Payments Hub that we are implementing currently.”
We can’t wait for the release of new Temenos solutions, especially around data, analytics, and payments, which will help us offer even greater value to our customers.”
Daniel Broten, SVP and Head, EQ Bank
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