At a Glance
– First bank in Canada to be fully hosted in the cloud.
– The Temenos solutions handled massive transaction volumes without a single blip.
– The bank reached its five-year growth target in half the anticipated time.
The dividends for banks prepared to embrace bold new strategies and operating models has never been higher. Consumers are looking for even more flexible services that slot into their fast-moving lifestyles: today’s savers want to manage their money on-the-go via mobile, tablet or a few clicks of a mouse, rather than take time out to travel to their local branch.
In the mid-2010s, Equitable Bank recognised that these shifting sands presented an opportunity to launch something fresh and innovative. Over the past 50 years, the bank climbed the ranks to become the ninth-largest bank in Canada by focusing on mortgages, home equity lines of credit and term deposits, distributed through brokers.
It saw the time was right to supplement this broker-driven approach and target a totally new market. Its goal was to launch ‘EQ Bank’, a fully digital banking arm offering high-interest personal savings products and an elegant, intuitive experience for the modern consumer, without delay.
In 2019 EQ Bank moved its core banking system to the cloud
Working with Temenos, EQ Bank now has a secure, stable, and nimble digital banking ecosystem running in the cloud. During the migration process, Temenos provided expert support to ensure the bank reached all regulatory compliance requirements and implemented the highest cloud security standards.
“Moving the EQ Bank core banking system to the cloud is an industry-leading change towards a new future of financial services,” says Dan Dickinson, Chief Information Officer at Equitable Bank. “As we’ve always done with EQ Bank, we’re delivering better, safer, easier and more intuitive ways to bank in Canada. We are leaving behind the traditional industry approaches of armchair technologies to innovate faster and serve Canadians better, right now.”
Spotting a Gap in the Market
The digital-only banking model was not completely unknown in Canada before EQ Bank, but a series of takeovers of the leading players in the 2010s left the door open for a savvy new operator. Equitable Bank saw the opening in the market and the rich potential for a digital service that delivered unique high yields for savers and made it a cinch to manage their accounts.
Dan Dickinson explains: “As a digital-only operator, we could avoid the costs and time delays of setting up a branch infrastructure, and we could pass those savings on to our customers in the form of highly competitive rates. We could also challenge old branch-based concepts – like the difference between chequing and savings accounts – that didn’t make sense to customers. As a bank, this model would also allow us to grow deposits much more quickly, and at lower costs, than the old branch-based transaction model.”
To transform EQ Bank from a great idea to a profit-driving brand, Equitable Bank began working on a new technology strategy. Rather than traditional legacy infrastructure designed to enable bank tellers to take deposits from savers, or a rigid technology stack that couldn’t grow and evolve with their business, Equitable Bank wanted a modern infrastructure that would allow customers to set up and access their money without support from its employees.
Even at this early stage, EQ Bank was taking a long-term view and wanted to work with a technology partner that could facilitate a transition to the public cloud as customer volumes grew. While some financial institutions were hesitant about the cloud, EQ Bank recognized that it could gain greater agility, reduced overheads, and security benefits. So naturally, the bank was eager to find a provider with a clear roadmap to support continuous enhancements and innovation in the years ahead.
Choosing the Best Product
Equitable Bank considered banking software from many of the leading vendors in North America, before identifying Temenos as the standout. To support the development and launch of EQ Bank, Equitable Bank selected Temenos Transact for robust, scalable back-end transaction processing.
”Temenos has a strong presence in Canada, and clearly understands the unique challenges of the market here – something vendors often overlook. Also, we were highly impressed with how much Temenos invests in research and development, which gave us reliable access to the most advanced products.”Dan Dickinson, Chief Information Officer
Meeting Tough Timelines
Equitable Bank wanted to move fast, aiming to launch EQ Bank in just 18 months. In response, Temenos provided a dedicated project team and delivered the initial code within nine months. Dan Dickinson continues: “Temenos impressed us by pulling out all the stops to meet our timeline. The built-in Canadian Model Bank functionality helps us to meet many stringent compliance requirements, simplifying access to data and report generation.”
Since its launch in January 2016, EQ Bank has proved a huge success. In the first few weeks, savers had deposited over C$100 million—a figure the bank had not expected to reach for several months. In the face of extraordinary demand, the Temenos solutions handled massive transaction volumes without a single blip.
Today, customer numbers stand at nearly 250,000 with more than C$4 billion in deposits with EQ Bank, making Equitable Bank one of the key digital players in Canada. In fact, the bank reached its five-year growth target in half the anticipated time.
Harvesting the Fruits of Ongoing Partnership
More than a typical vendor-client relationship, Equitable Bank enjoys a real strategic partnership with Temenos. Dan Dickinson comments: “Every week, I speak to my counterpart at Temenos, as do our product teams and Vice President. Our Chief Executive Officer also has a monthly checkpoint with Temenos executives, and both teams gather quarterly for an in-person business review. During the conversations, we pick up industry insights, learn about new products and iron out any issues.”
Working with professional services and product teams at Temenos, Equitable Bank upgraded Temenos Transact and moved its infrastructure to the public cloud in October 2019—making it one of the first Temenos cloud users in North America and the first bank in Canada to be fully hosted in state-of-the-art public cloud architecture. Beyond this, the bank is planning for the era of Open Banking, and is confident that Temenos will support the journey.
Dan Dickinson adds: “This is an exciting time for us. Cloud offers the enhanced scalability and flexibility we need to pursue aggressive growth plans, while we can see real security benefits from modern public cloud infrastructure. Open Banking offers a real opportunity for us, too, and Temenos was our first port of call when we started to kick off these initiatives.”
Shifting to the cloud
The cloud transformation enabled EQ Bank to bring services to market faster than ever, with multiple products launched in one five-month period. Just six months after the cloud migration, EQ Bank developed a new international remittance service in collaboration with payments provider TransferWise, allowing users to make low-cost transfers to many countries—a product that the bank believes is the best of its type available in Canada.
Working with a broad range of fintechs and innovative payments service providers is another aspect of the cloud that EQ Bank is eager to explore further. “The integration capabilities of the cloud are enormous,” adds Dan Dickinson. “We can connect with non-traditional financial services providers to build a fully connected ecosystem of digital banking services that ensure we continue to win new business and stay ahead of our competitors.”
EQ Bank has also enhanced its data analytics capabilities with the cloud move. Now, the bank can combine the functionality of its Temenos Analytics deployment with the business intelligence tools of Microsoft Azure, enabling users to uncover insights into customer preferences and deliver more tailored services and products.
As a digital-first bank, EQ Bank is also readying itself for profound changes in the Canadian financial industry, such as Open Banking.
“We challenge ourselves to innovate every day, which is why we’ve built our digital infrastructures not only to provide state-of-the-art digital experiences for today but also in anticipation of open banking,” says Andrew Moor, President and Chief Executive Officer of Equitable Bank. “Open banking will transform and modernize our industry enormously, benefitting consumers, businesses, and the economy alike. Innovation is in EQ Bank’s DNA, and our recent move to the cloud means we’re not only ready for the future of banking in Canada, we’re driving it.”
”We reach out to other banks in North America, Europe and beyond, and recommend Temenos. We don’t believe we could have built a new service in 18 months with any other vendor. We don’t use the term partnership lightly, but that’s exactly what we have with Temenos – our strategic alliance has helped us overtake and outlast the competition and strengthen our market position.”Dan Dickinson, Chief Information Officer
EQ Bank capitalizes on cutting-edge technology to offer seamless customer experience with transparent and value-added services