This week on The Disruptors, co-host Bruce Croxon sat down with Justin Thouin, co-founder and CEO of LowestRates.ca, to talk about what the Toronto-based FinTech offers, and how traditional Canadian banks may not be giving consumers the best deals.
“I think the main reason is that we provide a service that’s very useful to Canadians.”
– Justin Thouin
Thouin said LowestRates.ca, which joined the MaRS FinTech cluster in July 2016, is similar to Expedia. Instead of allowing consumers to compare flights and hotels, LowestRates.ca allows users to compare rates on personal finance items like mortgage, car insurance, and credit cards. In a single online platform, users can compare rates for free and “get the right product at the lowest price for [their] unique needs.”
Croxon asked Thouin how LowestRates.ca remains profitable even though it hasn’t raised large amounts of capital, and consumers continue to trust banks over alternative platforms.
“I think the main reason is that we provide a service that’s very useful to Canadians,” said Thouin. “They [consumers] come to our site, in five minutes, they realize they can save hundreds of thousands of dollars per year and so they tell their friends and family. I think word of mouth has allowed us to acquire consumers probably less expensively than more traditional advertising.”
Thouin said that while LowestRates.ca has gained traction among consumers, a major challenge is that Canada’s five big banks aren’t offering their best rates on finance items on the platform. He said the problem is that banks won’t offer the lowest possible rates because the average Canadian usually walks into a bank and accepts the first offer they receive, even if they are being overcharged.
“For us to really deliver what we promise, which is to compare the entire market for consumers, we need to have all five big banks on our site,” said Thouin.
Co-host Amber Kanwar said while LowestRates.ca’s business model solves a real pain point, missing a “big chunk” of the market could impact the company’s long-term scalability.
Watch the full interview below:
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