Why are Canadians choosing banking products that cost them more?

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Travel broadens the mind, but it can also lead to some unsettling revelations about what other countries are doing better. Jeff Adamson, one of the co-founders of Calgary-based fintech company Neo Financial, recalls an overseas trip where he checked out a local banking app.

​​”It was 2019, and I was surprised because the banking app was seamless, modern and easy to use,” he recalls. “The banking apps I was used to back in Canada looked and felt like they were built in the age of dial up internet. It was eye opening to see what the future of banking could be.”​​ ​

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Adamson says he didn’t want to believe that the customer experience in his home country was so far behind the rest of the world at the time. Giving Canadian banks the benefit of the doubt, he returned home following his trip and test-drove a series of local banks. The experiences were similar: underdeveloped apps, underwhelming customer experience, and bank fees that were overall much higher than customers were paying abroad.

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He also found that the requirements for setting up an account involved too much friction, including in-person bank branch appointments.

“Following that experience, I became determined to provide Canadians with the same customer experience I had discovered overseas,” he says.

That same year, Adamson and his partners launched Neo Financial, a financial technology company designed to bridge the gap between what Canadians were getting at their banks and what they deserved. More than simply offering a state-of-the-art app built from the ground up, Neo’s products included cashback credit cards offering some of the most competitive cashback rates in Canada and no-monthly-fee daily and saving account options designed to challenge the status quo. (1)

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Fast forward to 2025, and Neo’s inspiration is paying off — it was recently named the fastest-growing company in Canada by Deloitte’s 2024 Technology Fast 50™ awards program, and the fintech’s financial app is rated 4.8 stars by users on the App Store. But Adamson and his team believe that far too many Canadians don’t yet realize how underserved they are when compared to customers in other countries.

A February 2024 report by North Economics, Competition in Canadian Retail Banking, lays out the shortfall of Canadian banking products compared to those offered in the U.K. and Australia. According to the report, Big Five bank customers pay higher monthly service fees, higher NSF fees, higher overdraft costs and higher chequing account fees than their overseas counterparts.

An Oct. 17, 2023, news release by the Department of Finance Canada also highlights the prevalence of high ‘junk fees’ charged by Canadian banks, and the lack of no-cost and low-cost account options.

“I think some countries have leapfrogged Canada in customer banking experience because there was a strong desire by customers for something much better than what they had,” Adamson says. “Canadians generally aren’t looking at other countries and asking why they can’t have a better or more rewarding banking experience that’s more like the one in Brazil, the U.K., Germany or Singapore.”

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A 2024 article by McKinsey and Company, Springtime for Canada’s fintech industry, notes that Canada ranks among the top five countries for “smartphone penetration, internet usage and higher education levels.” At the same time, Canada finds itself among “the bottom five developed countries for adoption of digital banking, digital B2B services, and fintech solutions.”

“Given that Canadians embrace technology, we ask ourselves why Canadian banking customers are so apathetic about reaching out for a potentially game-changing customer experience,” Adamson says.

One possible reason is that customers who are used to paying a service fee for their chequing accounts see little reason to open accounts at two different banks providing similar offerings, and pay two sets of account fees, so they can compare.

“They may not be aware that they can test-drive the all-in-one Neo Everyday account with no monthly service fees, no minimum balances, and free everyday transactions,” Adamson says.

Another reason Canadians may be reluctant to look beyond their usual bank is the inherent difficulty and time involved in switching between bank service providers — for example, transferring all accounts, cash and automatic payments to a new bank.

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The report by North Economics notes that banking customers in the U.K. enjoy a “Current Account Switch Guarantee” in which a customer’s new bank will handle all the details of switching banks, including cash transfers and regular bill payment information.

Canada isn’t there yet, but Neo has made account sign-ups easier by building its application process to be super streamlined. It takes only a few minutes via smartphone and can be completed entirely online. Customers can also apply for, receive and use a digital Neo Financial cashback credit card in as little as three minutes. Additional products within the app can be added within minutes, taking the friction out of the process – no branch visits required.

“We invite customers to experience the Neo difference,” Adamson says. “You won’t be offered temporary promotional rates, or a ‘free’ coffee maker or tablet that you’ll pay for in higher fees over time. What we do promise is a world-class customer experience, reliable and generous interest rates, low fees, and a world-class credit card with cashback rates we believe are the best in the industry.”

1. The Neo Everyday account and Neo High-Interest Savings account are provided by Peoples Bank of Canada.

For more information on Neo Financial, or to open an account, visit the Neo Financial website.

Read more about Neo Financial’s founding story.

Read more Neo and the benefits of their cashback cards. 

This story was created by Content Works, Postmedia’s commercial content division, on behalf of Neo Financial.

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