Although St. Catharines, Ont.-based Meridian Credit Union (CU) will make its national mark with a new online bank, financial advisors will play an important role in humanizing that digital experience for Canadians, says Bill Maurin, Meridian’s president and CEO.

Meridian CU announced in August that it’s applying to the Office of the Superintendent of Financial Institutions for a federal Schedule 1 bank licence that, if approved, would create Meridian Bank, a nationwide online service.

The bank is expected to launch in 2018 and initially will offer retail products such as deposits and chequing accounts. It will grow to include wealth- management services within the first year and commercial banking services in the fourth or fifth year, Maurin says.

The vision for Meridian Bank is of an online business with a full financial services offering supported by human interaction.

“We’ll have, within the first year, a digital wealth solution – a robo-advisor – but also advisory services through the human element – through a call centre or video-chat capabilities with a senior wealth advisor who could be in a branch or could be in a call centre,” Maurin says.

The firm’s advisor count is anticipated to grow as Meridian Bank uses financial advisors to answer questions through its call centre, which will become busier with a growing national client base, Maurin adds.

Meridian CU was deliberate in its choice to apply for a Schedule 1 bank licence as opposed to becoming a federal credit union, the latter of which became possible in 2012. One reason for this decision is because the licensing process for a bank is a “tried and true” procedure, whereas the more recent federal credit union framework has areas that are still “ambiguous,” says Maurin: “We like certainty.”

Meridian Bank will be a wholly-owned subsidiary of Meridian CU and thus owned by the CU’s members. Shares will not be publicly traded or sold, and the bank’s clients will not hold shares in the new entity.

The decision to introduce the country to Meridian through an online offering is an extension of a “massive investment” in the CU’s digital-banking capabilities, says Maurin: “Why wouldn’t we want to leverage all of that technology to bring Meridian’s value proposition beyond Ontario’s borders?”

The traditional financial services sector now finds itself racing to enhance digital innovation in response to millennials’ changing expectations and the emergence of technology companies that offer financial services online.

This is a race in which CUs may have an advantage over their big bank counterparts, suggests Andrea Feddema, partner and leader of in Ernst & Young LLP’s national CU sector practice in London, Ont.

“When you’re talking about partnerships or investments in [financial services technology], because [CUs] aren’t as large as the big banks, [the former] really do have an ability to be nimble and implement things quickly,” Feddema says.

Meridian CU is determined to offer a national alternative to the more well-known banks and has already distinguished itself in one regard: although some banks have been closing branches, the CU opened 10 new locations in Ontario in 2015 and plans to maintain that trend in 2016 and 2017.

The increase in locations is partnered with a jump in assets under management for Meridian’s wealth-management business. In fact, Maurin estimates, the ongoing branch expansion in Ontario will lead to the employment of one senior wealth advisor in each new location.

As well, a “very select” number of bricks-and-mortar Meridian Bank branches are likely to go up in Western Canadian urban centres four years after the online entity’s launch, Maurin says.

“The key motivation,” he says, “would be to facilitate the expansion of the commercial banking model, which is still a face-to-face experience, and to help build the brand.”

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