Tangerine Bank, the digital lender owned by Bank of Nova Scotia, will start offering credit lines this year as it seeks to boost revenue and bolster flagging profit through expanded product offerings.
"We don't see this as a difficult product to develop, so we will be launching very soon," Tangerine Chief Executive Officer Brenda Rideout said in an interview at the company's Toronto headquarters. "And then we'll have essentially completed what we are calling the products for becoming Canadians' everyday bank."
Adding unsecured consumer credit lines is the last piece of a three-year effort to transform the online platform from a "niche savings bank" to a lender with a broad range of products, said Rideout, 53, who became CEO last month. She wants Tangerine to take a larger role in helping its 2 million customers set financial goals through digital offerings, while pushing to better integrate products including checking accounts, mortgages, mutual funds and credit cards.
"About 50 percent of our customers have more than one product with us, so you can imagine we want to change that exponentially now that we have a broader product set," Rideout said in the April 10 interview.
Tangerine also is looking to start marketing a dividend-focused mutual fund started in November to complement a collection of index funds that make up what Rideout calls a "robo adviser on steroids." The firm, which marks its 20th year in Canada this month, plans to add two or three more kiosks in shopping malls across the country this year, Rideout said.
The lender plans to take advantage of collaborations with financial technology firms and tap into Scotiabank's Digital Factory software lab to add features, said Rideout, who has a degree in computer science from Toronto's Seneca College. An example: Tangerine is rolling out voice recognition at two call centers this year to let customers bypass the need to recite account numbers and passwords.
"What we're good at is taking those digital innovations and applying them very quickly," she said.
Rideout joined as director of software development in 1999, two years after the firm, then owned by Amsterdam-based ING Groep NV, entered Canada with plans to start an branchless bank. ING Direct Canada shook up the industry, offering high-interest savings accounts, low-rate mortgages and, later, innovations such as mobile banking. During that time, Rideout climbed the ranks, taking roles including chief information officer, chief marketing and technology officer and chief strategy officer.
Scotiabank bought ING Direct Canada for C$3.1 billion ($2.3 billion) in November 2012 and changed its name to Tangerine. The business had C$38.3 billion of assets as of Jan. 31, down from C$39.7 billion when it was acquired, according to regulatory filings, due to a decision to sell C$22 billion of mortgages after the takeover. Tangerine has seen dwindling profit since being bought: Last year's annual profit was down 36 percent from 2015, and about half what it was the Scotiabank bought the business, filings show.
Rideout points to "a tremendous amount of investment" since Scotiabank's takeover, including changing signs, redesigning the mobile app and adding products such credit cards. With many of those costs now behind it, Tangerine can start working to improve its financial performance, she said.
"There's no doubt our focus is going to be on increasing revenue and decreasing expenses," she said. "With such a broad product set, we should be able to do that."
