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The accounts come with no monthly or low-balance fees. Wealthsimple will also roll out ATM fee reimbursements, foreign-exchange-transaction fees and a tungsten metal card with the accounts. (The Logic)

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Talking point: Today’s move is a challenge to Canada’s big banks. In its press release, Wealthsimple highlights how much more money would accrue at a 2.4 per cent interest rate compared to high-interest savings or traditional chequing accounts from other institutions. At the same time, however, this chequing account is only possible because Wealthsimple has made a deal with two of Canada’s Big Six banks to actually hold the money, as the company does not have a banking licence. Keeping banks happy while trying to take their customers isn’t the only tightrope to walk for Wealthsimple: it’s heavily backed by financial services giant Power Corporation, but so is Koho, which already offers a bank account.

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The Toronto-based fintech recently incorporated three subsidiaries: Wealthsimple Digital Assets, Wealthsimple Payments and Wealthsimple Cash. The Digital Assets and Payments moves were first reported by the newsletter OPM Wars. (The Globe and Mail, OPM Wars)

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Talking point: Wealthsimple CEO Michael Katchen said he wants to offer chequing accounts to customers, and the company’s new subsidiaries also come with licences for money transfers, foreign exchanges and dealing in cryptocurrencies. The new ventures follow similar moves from Wealthsimple’s rivals. Last month, Questrade applied for a banking licence. In November 2019, The Logic broke the news that RBC was exploring building a cryptocurrency trading platform. These licences will potentially create greater overlap between Wealthsimple and Koho, both of which are heavily backed by insurance firm Power Corporation. Koho already offers bank accounts. U.K.-based fintechs Revolut and TransferWise, both of which are trying to expand in Canada, also have licences for electronic money transfers and foreign exchange.

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Existing anchor investor Portag3 Ventures—the fintech arm of Power Financial—led the investment in Diagram, which uses its money to co-found new businesses with entrepreneurs in financial services, health care and insurance. Angela Strange, a partner at Andreessen Horowitz, and Bruce Heyman, the former U.S. ambassador to Canada and former managing director of Goldman Sachs, were among the high-profile angel investors who also participated in the fund. (Financial Post)

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Talking point: Access to Diagram’s portfolio companies could help Power’s core insurance operations understand what new technologies to apply to their businesses. In the past, the firms have also matched up the startups in which they have invested to increase their chances of finding customers. In 2017, one of Diagram’s first investments, Dialogue, integrated its service—which allows customers’ employees to chat with doctors—with benefits platform League, a Power Financial portfolio company. A year later, Power Corp. subsidiary Great-West Life launched Dialogue to employers across Canada. Power and its subsidiaries own robo-adviser Wealthsimple, while Portag3 has invested in digital account service Koho and Borrowell, which provides credit scores and facilitates personal loans. The startups in Diagram’s second fund could benefit from the customer base of those existing scale-ups.

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Manulife wants to attract millennial customers from Canada’s Big Five banks with new digital products, including a cash-back credit card, a high-interest savings account, an unlimited-transaction chequing account and travel insurance. The firm is also is waiving its $10 monthly fee for each month customers add $100 or more to their savings. (Financial Post)

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Talking point: Manulife Bank has been around for 25 years, but it’s never been able to take much market share away from the Big Five, as 80 per cent of millennials have an account with one of them, according to Manulife Bank CEO Rick Lunny. Lunny is hoping that this new package can help his firm take market share away from those banks. However, Manulife is far from the only one looking to sign up customers by offering digital banking services. In April, the credit union Meridian launched Motusbank, which offers online bank accounts and mortgage lending. Insurance giant Power Corporation has backed Toronto-based startup Koho through its fintech fund, Portag3 Ventures. Koho provides a digital bank account linked to a prepaid card, automates savings for customers and offers cash back for groceries, travel and dining out.

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Canadians pay an average of $159 in bank charges a year, according to a study from Koho, a Power Corporation portfolio company. Paul Desmarais III, senior vice-president of Power Financial and Power Corp., called on banks to be more transparent, saying consumers had a right to know what fees they’re paying. (Bloomberg)

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Talking point: Desmarais is speaking from self-interest—Power Corp. and its venture fund Portag3 compete with banks through their fintech investments. The Montreal-headquartered company has also advocated for open-banking rules. Open banking would push banks to share more product and service information, allowing consumers to better compare them, Portag3 said in its submission to the federal finance department, which is holding consultations on the subject. They would make it easier for consumers to share their financial data with third parties, allowing Power Corp.’s fintechs to offer more targeted services. Power has a controlling stake in Toronto-based investing platform Wealthsimple, and has backed loyalty startup Drop, as well as Koho, which offers app-based accounts.