Personal Banking operates through five business lines: EQ Bank, Residential Lending, Wealth Decumulation, Consumer Lending, and Payments as a Service supporting our fintech partners.
EQ Bank is Equitable Bank’s digital banking platform. EQ Bank is a leading digital bank and the first in Canada hosted in the cloud. With constantly expanding solutions, EQ Bank is quickly becoming a primary banking option for Canadians, in addition to an important source of diversified funding for the Bank.
Equitable is the leader in the Canadian Alternative uninsured mortgage market, lending mostly to self-employed borrowers and other Canadians that have the capacity, character, and financial readiness required to reliably pay their mortgages but do not meet the credit criteria of mortgage insurers and major banks. Alternative lending is an important line of business for the Bank and its earnings. The prime business generates a strong return on capital, but is less important to the overall profitability of the Bank than the Alternative business.
Equitable Bank has driven strong growth in its reverse mortgage and insurance lending businesses. From a demographic standpoint, Canada’s aging population presents strong growth opportunities for our Challenger Bank solutions. Equitable plans to capture a larger share of the reverse mortgage market by introducing new products and referral programs, and through expansion of digital marketing efforts that cater to specific groups. The insurance lending business line is also primed for growth as it’s offering is being enhanced through additional partnerships with insurance companies.
Through strategic partnerships developed with industry leading digitally oriented partners, Equitable provides Canadian consumers with lending solutions for various purposes such as home improvement upgrades or to support other consumer purchases. Originations are typically sourced by the partner organizations through large retail partnerships. Borrowers tend to value the flexibility and convenience of solutions, and are not credit seeking in nature as offerings are provided as a value-add through retailers. Consumer Lending represents a key area of diversification for the Bank in an area with attractive yields while maintaining a high-quality credit profile.
Equitable Bank is developing the Payment-as-a-Service (PaaS) business to enable fintechs, program managers, and other entities to offer their customers advanced payment products that address a wide range of needs and use cases. With a rapidly growing fintech sector focused on offering Canadians innovation and wider choice in their financial lives, our focus is to enable these clients achieve their growth goals by enabling speed, scale, and flexibility across multiple payment products. Equitable Bank currently supports this growing community as a BIN Sponsor for issuing card products for consumer & commercial use cases. In the future, we plan to expand our offerings to enable faster and safer payments across additional payment rails.