Canadian fintech platforms are gaining ground over big banks—here's why

There's a shift happening in how Canadians manage their money. More people are looking beyond RBC, TD, BMO, Scotiabank, and CIBC toward digital-first fintech platforms that offer higher savings rates, lower fees, and faster account setup. According to the Canadian Banking Association, 78% of Canadians do most of their banking virtually. That shift is accelerating as digital-only fintech platforms like Neo Financial deliver tangible financial advantages that Canada's Big Five banks have been slow to match. Here are the reasons driving the change:

1. Physical locations matter less than they used to

According to Tim Morris, chief banking officer at Neo Financial, "There are millions of Canadians who are getting a better experience out of digital-only financial institutions than they are from the traditional experience of having to physically go to a branch in person."

The data echoes this, with the average number of monthly branch visits per Canadian having dropped from 1.8 in 2021 to 1.3 in 2024. Now, only 12% of customers do most of their banking at a branch.

The number of physical bank branches in Canada has been declining since 2014, falling from 5,890 in 2018 to around 5,656 by 2022. For the growing majority of Canadians who handle every transaction digitally, physical locations are no longer a reason to stay—and the fees that fund them are increasingly a reason to leave.

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2. Big banks offer low savings rates

Savings accounts at traditional banks typically pay between 0.01% and 0.05% on deposits. When that hits your account, a percentage that small functionally feels like nothing.

Digital-only fintechs offer substantially more. On the free Essentials membership, Neo members get a 2% Neo Savings rate¹. Those on the Neo Grow membership ($14.99 per month) get 2.75%. For a Canadian holding $25,000 in savings, the difference between 0.05% at a big bank and 2.75% with Neo's Grow membership translates to roughly $684² more in annual interest, assuming monthly compounding:

Even with the Grow monthly membership fee factored in, Neo members still walk away with $504 in earnings.

3. Big banks' monthly fees have become a dealbreaker

Big banks charge monthly chequing account fees that typically range from $4.95 to $32.95, unless customers maintain minimum balances of $3,000 to $6,000. Many virtual financial institutions in Canada have eliminated monthly fees entirely.

The Neo Chequing account is available on the free Neo Essentials membership and has no minimum balance requirement. Over a year, a Canadian paying $16.95 per month at a traditional bank spends $203.40 just to hold a chequing account.

Fintech platforms avoid this cost because they do not operate physical branches, employ tellers, or maintain the overhead that brick-and-mortar locations demand. 

4. Canadians are looking for a mobile-first experience

Mobile banking usage among Canadian account holders grew from 53% in 2019 to over 60% by 2025. As a digital-first fintech, Neo Financial was designed from the ground up as a mobile product. Opening an account takes minutes and requires nothing more than a phone, a government ID, and a selfie. There is no branch visit, no paper form, and no waiting period before a virtual card is available to use.