Add one more service that a tech-savvy company is making quick and easy for consumers: Toronto-based Borrowell INC. announced on Monday that it is providing consumers free access to their credit scores through the fintech lender's website, giving consumers a snapshot of their financial health.
The service, developed with Equifax Canada Co., also underscores an emerging trend: New financial technology firms are eager to partner with other companies as they position themselves as alternatives to traditional financial institutions such as banks.
In announcing its partnership with Equifax, Borrowell – an online lender that appeals to consumers looking for cheaper alternatives to credit card debt – quoted a 2015 Bank of Montreal survey which found that 56 per cent of Canadians have never checked their credit scores, and just 14 per cent checked their scores once a year.
"In talking to consumers every day, we came to realize that many Canadians don't know their current credit score, or how to improve it," Andrew Graham, chief executive officer of Borrowell, said in a statement.
Though credit reports – used by financial firms to assess a consumer's creditworthiness to buy everything from cars to houses and get approval to use credit cards – are available free through the mail, quick online access to credit scores costs money.
Borrowell is now changing this online model. The terms of the deal between Borrowell and Equifax were not disclosed. However, Borrowell said that it plans to use the service to build relationships with consumers. The company said that it would send personalized offers for its own loan products.
What's also interesting is that no bank is involved in this partnership. Fintech firms are often seen as natural competitors or partners to the banks, as fintechs look for a customer base and banks look for innovative services. But fintechs are keen to find partners beyond the banks.
Earlier this month, Toronto-based FundThrough Inc., which helps small businesses bridge the financial gap between invoicing their clients and getting paid, to small businesses, announced an exclusive partnership with Regus Group Companies, which provides workspaces and services to small companies and entrepreneurs. The deal means that Regus clients in Canada will get access to FundThrough's online funding platform.
"FundThrough will be able to tap into Regus' 100,000 users; Regus will be able to tap into an innovative funding solution for their clients," said Steven Uster, chief executive officer and co-founder of FundThrough.
He declined to comment on the financial arrangement between the two companies, but noted that these sorts of partnerships are a potential path forward for fintech players as they expand.
"When people think about partners with fintech, they naturally say, 'Oh, you're going to partner with a bank.' And what's interesting is that there are other ways to access customers across the country," Mr. Uster said.
"The banks might be slower, they might be more bureaucratic or they might not be sure how to view fintech players. But in the meantime, all of this action is going to happen around them, and their customers are going to get served away from them."