CIBC’s new banking brand, Simplii, to take over 2 million PC Financial accounts
Toronto-based CIBC (TSX:CM) has provided the back-end banking services for PC Financial for nearly 20 years but the companies said Wednesday they are going their separate ways.
The bank says its new Simplii Financial brand will provide no-fee daily banking through online, mobile and telephone channels in much the same way that PC Financial has offered its roughly two million clients.
Loblaw’s President’s Choice Financial will continue to offer Mastercard credit card products and the PC Plus loyalty-points program.
The CEO of President’s Choice Financial says its customers are most interested in being able to make payments simply and the ability to get free groceries through points.
CIBC is promising a smooth transition for existing PC Financial clients with no changes to account numbers, mortgage terms or automatic payments and deposits.
As part of the bank’s agreement with Loblaw (TSX:L), CIBC will wind down PC Financial consumer banking and shift all clients over to the Simplii brand on Nov. 1.
CIBC did not disclose financial terms of the agreement with Loblaw, but said its fourth-quarter results would recognize $100 million in pre-tax fees and charges related to the deal.
CIBC’s Simplii will present a challenge to Scotiabank’s Tangerine direct banking brand, which it bought for $3.1 billion in 2012 when it was known as ING Direct.
Mike Boluch, executive vice-president of direct banking at CIBC, said the bank plans to invest more in Simplii’s offerings over time.
“Our focus in the near-term is to make this a seamless transition over for our clients. Over time, we’re going to invest in the offer. We at CIBC have a long history of being known for innovation.”
The new division will provide more options for the full range of client needs, from no-fee online banking to more advice-oriented customer service, Boluch said in an interview before the official announcement.
“We see a wide spectrum of client needs, and we see this as being an important part of that spectrum,” Boluch said. “We’re pretty confident there’s a place for both business models.”
© 2017 The Canadian Press