As someone who has seen crisis turn to opportunity in the financial sector before, Equitable Bank president and CEO Andrew Moor hopes Canada’s recent economic and political challenges don’t go to waste.
The Sussex, England native, who studied mechanical engineering in London, first came to Canada to pursue an MBA at the University of British Columbia in 1985, believing that business school would help him become a better engineer.
Through his studies, however, he learned that the opposite was also true.
“It was pretty complicated engineering work, and it wasn’t well articulated to the commercial side, so I pursued the MBA to better work on the commercial side of the business,” he says. “I then discovered that the math of engineering was really useful in banking.”
After graduating in 1987, Moor took a job with CIBC in London which brought him back to Canada three years later for what was supposed to be a temporary stay. He’s remained ever since.
In 1996 he was hired by Calgary-based modular furniture maker SMED International — first as CFO then as CEO. After that business was sold in 2000, he became president and CEO of mortgage brokerage Invis until it was sold to HSBC in 2006.
After the deal closed, the CEO of mortgage lender Equitable Trust, whom Moor had worked with at Invis, announced his retirement, and Moor was recruited to take over in 2007, dropping him into the turmoil of the banking sector during the 2008 global financial crisis.
What could have been the small bank’s downfall ultimately proved its greatest opportunity.
“As a result of the financial crisis a number of foreign banks left the market,” he says. “We had a small (commercial banking) business that existed in 2007, and towards the end of 2009 we really started to push into that market and became the biggest player in lending to self-employed people, and people with a unique credit profile.”
The economic crisis, and the digital banking revolution that followed, also inspired Moor to launch Equitable Bank’s own digital solution, EQ Bank, in 2016.
Equitable Trust had about 100 employees when Moor took over and a market capitalization of under $400 million.
Today, the rebranded and publicly listed Equitable Bank has a market capitalization of more than $4 billion and employs 2,000, serving 700,000 customers with $127 billion in combined assets under management and administration. Its digital banking platform, EQ Bank, meanwhile, serves more than half a million Canadians with a combined $9 billion in deposits.
Speaking to the Star from Equitable Bank’s head office inside The Globe and Mail Centre — symbolically positioned just outside the financial district — Moor says he is hopeful that the economic challenges the country faces today will provide the push it needs to implement long-needed banking innovations.
What was it like joining Equitable Bank just before the 2008 financial crisis?
I came in with a mandate to grow the business, but the priority quickly changed to just surviving the financial crisis.
Every day we came in wondering if the missile would hit us next. Seeing how quickly things could go wrong taught me a lot about risk management.
The good news is the Canadian banking system held up quite well during that period, and it created some enormous opportunities for us.
What kinds of opportunities?
After the financial crisis we were thinking about where to take the business. I remember wandering through the canyons of downtown Toronto, seeing the big green bank building and big blue bank building, wondering how we could compete with these guys, with all their branches and branding.
I was inspired by the new digital U.K. banks that popped up after the financial crisis, thanks to a change in regulations, and I realized the future was going to be digital.
Equitable Trust Company was incorporated in 1970 and started as small business, and in 2004 it went public, but when I joined the company in 2007, we were primarily a commercial mortgage lender for people in the GTA that owned apartment buildings.
That’s still a part of our business — we’re the largest securitizer of CMHC-insured multi-unit residential buildings in Canada — but as foreign banks left the market we expanded into new kinds of loans, like single family residential mortgages, and launched our digital bank, EQ Bank, in 2016.
What was the idea behind EQ Bank?
We built a bank that we thought we would like.
It really wasn’t based on market research, we just thought through the things that could be improved in our banking system, and provide value to customers; no fees, interest on money sitting the bank, a digital bank that let you on-board from your phone.
Today, we’ve got more than half a million customers and more than $9 billion in deposits, so it’s been a wandering, exciting journey, but we keep on looking for ways to make life better for customers.
We recently revamped our U.S. foreign exchange rates to make it easier to move money around with a better deal than the big banks. We were the first company not to charge for Interac e-Transfers, and we’re still the only bank that doesn’t charge for cash withdrawals from other banks’ ATMs in Canada.
Our card also provides cash back on all purchases and does not charge foreign exchange fees.
We’re transferring value to the Canadian consumer that others are not, and there’s still a long way to go; we think we’re just in the second inning.
Like what?
We were a founding investor in Borrowell, which took us into the world of FinTech (financial technology).
We’re now investors in Portage Ventures’ FinTech fund, and we’re focused on bringing innovation back to the banking sector.
We’ve got all the regulatory constraints of a bank, which sometimes makes it difficult to keep up with fast moving fintechs who don’t have those constraints, but we come with the certainty of a bank, so we fit nicely into that ecosystem.
What do you think most Canadians don’t understand about the financial sector?
Most probably don’t know we exist.
We did some advertising last year with Eugene and Dan Levy, so some figured it out, but too many Canadians think we only have five banks, and those are their choices.
The reality is we exist, so do a few others, and much of the innovation that comes in is from the challengers like us, because we have to work harder to earn our spot in the market.
Is there an innovation problem among the major institutions?
I think there is. We default too much to safety as opposed to innovation or productivity, and we ought to be concerned about that for our future prosperity.
For example, our payments system is embarrassingly archaic and under the control of very few institutions; it should be more open to allow those like us to compete better.
We’ve been talking about open banking in Canada for six or seven years and we seem to be no closer to launching it.
We built a railway across the country in four years, and this is just a collection of computer codes and regulations, yet I’m still making the same speeches about open banking that I delivered in 2018. It’s ridiculous, and it’s embarrassing.
The reality is its easier for us to send an ETF to a bank account in India using one of our fintech partners than it is to move money between provinces. Why is that?
Canadians should be asking these questions, because there are real costs to our economy.
Didn’t erring on the side of caution help Canada overcome the 2008 Financial Crisis?
Prudence in banking is always good, but since 2007 we’ve only cemented the position of the largest banks further.
I would argue that we’ve over-dialed on that pendulum. Yes, we’ve got a good, strong banking system, but it comes at an enormous cost to our economy.
Hooking up a bit of innovation would be a good thing, and it wouldn’t endanger the nation.
There are so many safeguards in our banking system already.
Are you hopeful things will change in the face of new economic threats, namely tariffs?
It feels like there’s more will than ever, and we shouldn’t waste a good crisis to do some of these things.
We’re hearing more about addressing interprovincial trade barriers, for example, which is encouraging.
As we think about getting through the next four years, we need to focus on the things within our control, not what our neighbours are up to.
We can do open banking, we can do real-time rails all of this is shovel-ready, and these things will improve the health and productivity of small businesses, so they can spend less time banking and more time serving customers.
We’d also like to see an increase to the levels of CDIC Insurance to better support small businesses, who tend to have fluctuating cash flows.
There are reasons for concern, but there’s a lot we can do to be more productive.
We have some great assets in Canada — longer life expectancy, a great single-payer health care system, people that generally get on with each other and respect each other’s values, lots of natural resources, a highly educated population — so I’m optimistic for Canada.
We may need to dig in for a year or two and face some facts to make sure our economy is properly oriented.
I think we’ve overregulated ourselves at the cost of a prosperity agenda, but we can do it, and we’ll do it in the nice, Canadian way, in terms of figuring out the best ways forward.
