Bank of Montreal is launching a new digital-only lending solution, allowing customers to apply for a personal line of credit directly from their mobile devices.
Through the new solution, BMO said customers can apply for credit by taking a short application, receiving a decision on their loan within minutes. Customers will get a real-time decision on their application, as well as faster access to credit, allowing them to tap into their loans within 48 hours of approval.
“We saw an opportunity to introduce a digital loan solution, meeting our customers where they are interacting with us.”
“Canadians are continuing to turn to their mobile devices for their day-to-day banking. We saw an opportunity to introduce a digital loan solution, meeting our customers where they are interacting with us,” said Brett Pitts, chief digital officer at BMO. “This new digital service is a reflection of BMO’s commitment to creating digital solutions that better support our customers.”
BMO said this solution is the “first of its kind,” although several financial incumbents and Canadian FinTech startups have worked in digital loans or digital lines of credit for years. CIBC digital subsidiary Simplii Financial, as well as Scotiabank’s Tangerine, both offer personal or home equity lines of credit on a digital platform.
Digital bank Motusbank, which was launched earlier this year by Ontario credit union Meridian, offers a way for customers to apply for a digital line of credit. Motusbank allows users to borrow up to $35,000, which can be paid back in monthly installments from periods ranging between 1 month and 5 years.
Other companies, like Toronto-based Borrowell, have offered digital loans since 2015. Borrowell recently closed a $20 million Series B from a number of investors, including White Star Capital and Portag3 Ventures. It also publicly launched its AI-powered credit monitoring tool, Molly, after a beta period that took place in January.
“We know from our member base of over a million Canadians that consumers want all-digital banking options,” Borrowell CEO Andrew Graham told BetaKit. “There are lots of reasons to believe that [BMO’s] new line of credit solution will be attractive.”
A spokesperson from BMO told BetaKit that despite being similar, Motusbank’s application still requires documents for income and identity confirmation. Motusbank is also only available in Ontario, while BMO’s solution is also available nationwide, including Quebec, the spokesperson added.
However, Motusbank representatives told BetaKit that its secured and unsecured lines of credit are fully digital and are available nationwide, excluding Quebec. Only in the case of joint applications for secured loans are physical documents and ‘wet signatures’ required to be signed and couriered, the cost of which is covered by Motusbank, which added that electronic signatures for this will be coming soon.
BMO has made several moves in the digital space over the last couple of years. In early 2018, the company partnered with Finn.AI to work on its chatbot tool. In August, it announced it was working with the Ontario Teachers’ Pension Plan to launch a blockchain pilot. This year, it launched a banking group dedicated to technology and innovation, intended to provide advice and funding to companies at various stages of growth, representing one of its first startup funding plays.
This story has been updated to clarify Motusbank’s digital lending offering.