Tangerine, Scotiabank’s discount digital subsidiary, is planning to introduce a suite of new products and services over the next year as it tries to reinvent itself as a credible competitor to Wealthsimple, EQ Bank and global challenger banks competing in the Canadian market. 

In an interview with The Logic, CEO Terri-Lee Weeks said the transformation will be gradual, with Tangerine introducing new AI-enabled and personalized products throughout the year. She said the bank will focus on improving the experience for its existing customers and convincing former clients to return. Tangerine has about $48 billion in total assets, according to data from the federal banking regulator.

Weeks declined to disclose specifics about the new products Tangerine is planning, but said the bank’s business customers will be the first to see changes. Currently, Tangerine’s products for business customers are limited to savings accounts and guaranteed investment certificates, which lock up money for a set period in exchange for an assured return. Meanwhile, competition from fintechs is heating up: New York City’s Ramp officially entered Canada in July, Toronto’s Float announced an $85-million Series C in June and Wealthsimple announced a line of products aimed at entrepreneurs in May.

As a bank, Tangerine will have an advantage over those competitors—the ability to use deposits as a capital base for making loans. Weeks said Tangerine plans to offer business clients “the full range of services.” 

“We believe that there is a gap,” she said. “I think that how we’ve been looking at entrepreneurs in the country in the past needs a shakeup.” 

Tangerine’s predecessor, ING Direct Canada, was early to the concept of low-cost direct banking without branches, introducing a no-fee, high-interest savings account with service over the phone in 1997. Scotiabank bought ING Direct Canada in 2012, renaming it Tangerine two years later. Tangerine retained a separate banking licence.

Tangerine has hired U.K. bank Starling’s software business, Engine by Starling, to overhaul its back-end technology and improve its mobile app, a transition Weeks said will take place this fall. At a conference in January, Scotiabank CEO Scott Thomson said the tech modernization is part of Tangerine’s bid to become a competitive challenger bank. At a conference in March, Scotiabank head of Canadian banking Aris Bogdaneris said the bank is transforming into “Tangerine 2.0,” saying it will be able to “compete with the best digital banks in the world.”

Weeks said she’s taking inspiration from successful challenger banks in other countries. She cited Brazil’s Nubank, which added 20 million users from 2023 to 2024 by improving products and focusing on customer service, helping the company grow by word of mouth while keeping marketing costs low. “Nubank has done some really interesting things,” she said. “They’ve grown very, very rapidly.”

Weeks also said she’s inspired by Singaporean bank DBS’s AI products. DBS was one of the first banks globally to disclose a return on investment from AI spending and CEO Tan Su Shan has called it “an AI-enabled bank with a heart.” 

Doug Macdonald, a consultant who advises mid-sized challenger banks and credit unions, said Scotiabank has historically operated Tangerine as a discount flanker brand, similar to Telus’s low-cost mobile carrier Koodo or Air Canada’s Jazz. He said Tangerine could serve as a testing ground for new technology for Scotiabank, experimenting at a lower cost and with less risk than the big lender could.

“In the past, it hasn’t really been a standalone, full-fledged financial institution. It’s really been seen as an extension of Scotiabank,” he said. “This will be an opportunity.”

Tangerine faces stiff competition. Mid-sized banks have historically struggled in Canada—EQ Bank parent EQB, the only independent publicly traded competitor to the Big Six, is in the midst of integrating its high-stakes acquisition of PC Financial while simultaneously battling impaired debt on its loan books, while National Bank and Fairstone split up Laurentian Bank in 2025.

Meanwhile, fintechs offering challenges to traditional retail banking services have thrived. Wealthsimple, which launched a suite of banking products in 2025, announced its assets under administration at the end of the second quarter hit $155.6 billion, up 84.1 per cent from the previous year. Koho raised $130 million at a $1.33-billion valuation from investors including Abu Dhabi sovereign wealth fund Mubadala in June. Questrade finally got a banking licence in November six years after it first applied, with others expected to follow under the federal banking regulator’s new fast-track program.

Digital banks offering lower fees and better interest rates than the Big Six are now commonplace. Tangerine offers a negligible interest rate on its chequing accounts and 0.3 per cent on savings accounts once a promotional rate expires, significantly lower than other digital-only competitors.

Weeks said Tangerine plans to compete on product quality and customer satisfaction, rather than interest rates and fees. “It’s not the focus of what Tangerine is doing,” she said.

Weeks said she’s happy to see competition increasing in financial services. “It pushes the whole industry to improve, and it ultimately benefits our clients, benefits Canadians more broadly,” she said.