When Laurentian Bank of Canada set out to grow nationally from its core market of Quebec, it looked to a vendor founded by the credit union community for help.
The Montreal-based bank is part of Central 1 Credit Union's Forge Community, a sandbox where Canadian credit unions and smaller banks can collaborate with fintechs on developing new products and services. Central 1 is owned by credit unions in British Columbia and Ontario; it provides treasury, digital banking and payment processing services for 250 Canadian financial institutions with a combined 5 million customers.
Laurentian's growth, part of a
“It took us just seven months working with Central 1 to launch our app,” said Adam Swinemar, Laurentian’s senior vice president of digital, product and marketing. “Previously, unlike the big banks, we didn’t have a native mobile app, just a mobile browser-based product that wasn’t responsive.”
With CA$28.7 billion of assets, 58 branches and 460,000 customers, Laurentian is much smaller than Canada’s largest banks. Although Laurentian is a Forge Community member, so far the fintech partnerships it has established are independent of Central 1. Laurentian has partnered with Toronto-based Brim, which provides banks with digitally enabled credit cards on a platform-as-a-service basis, and Lethbridge, Alberta-based Thirdstream, which enables digital customer onboarding for deposit products.
“We see opportunities in the Community in terms of its members coming together to share best practices and our getting introduced to new fintechs that can offer us valuable products and services,” Swinemar said. “We lack the IT infrastructure that big banks have, so working with Central 1 gives us access to its digital platform without needing to make the IT investments that larger banks incur.”
In addition to digital banking, Laurentian uses Central 1 for payment processing.
Vancouver-based Central 1 vets the fintechs in its Forge Community and makes their application programming interfaces available to clients. While it is fairly simple for Canadian fintechs to reach the country’s six large banks, it is more complicated for them to reach the fragmented market of
By joining Central 1's Forge Community, fintechs gain access to a large number of smaller financial institutions across Canada instead of having to connect with them individually.
Small financial institutions, big community
The Forge Community is available to Central 1 clients who use its Forge digital banking platform. Currently, 148 credit unions and banks with a total of 2.5 million clients have introduced Forge-based digital banking services.
Central 1 has hired Derek Colfer as vice president of digital products to lead the development of the Forge digital banking platform and Forge Community. Colfer was previously at
In addition to bringing FIs and fintechs together, Central 1 wants to play a role as co-creator within the Forge Community.
“This would involve Central 1 working with credit unions and fintechs to develop the best consumer experiences we can,” Colfer said. Around 60% of Central 1’s 700 employees work in its digital banking and payments division, supporting its role as a technology supplier to Canadian financial institutions.
Central 1 clients are heavily engaged in the product development cycle, Colfer said. “Our digital experience committee comprising large and mid-size credit unions meets once a month to talk about our digital roadmap and about what we’re building.”
When Central 1 launched a two-factor authentication feature, sending texts containing one-time passcodes to mobile phones, clients reported that many credit union members didn’t have mobile phones or didn’t want to receive texts, Colfer said. Its response was to develop the option for clients to send verbal messages with one-time passcodes to customer landlines. “That’s an example of how clients get involved in our product development process,” Colfer said.
Central 1 plans to help its clients integrate with
“There are a lot of opportunities for us to have a clearly defined role in ensuring a good customer experience with digital ID,” Colfer said. “We’re talking to the various Canadian digital ID players so we can incorporate digital ID into Forge digital banking.”
A plan for growth
Laurentian's goal with its mobile banking app is to reach underserved communities across Canada who aren’t traditionally served by bigger banks, according to Swinemar. Central 1 is key to this effort.
Laurentian hosts a lab where its business and digital staff collaborate with remote teams from Central 1. “This means we can have a smaller IT team in-house,” Swinemar said. “Central 1 is helping us with our nationwide expansion. They do digital development work on our behalf, and we do the necessary digital work to connect into their platform.”
Laurentian has adopted an agile approach to technology development. Agile software development is an approach emphasizing incremental application delivery via team collaboration.
“Both the Laurentian and Central 1 teams aligned around agile delivery,” Swinemar said. Now that the mobile app is complete, "we’re working with Central 1 to migrate our desktop banking platform to Forge to provide a better experience for our customers," Swinemar said.
