Like other major Canadian financial institutions, Montreal, Quebec-based Desjardins Group is investing in digital platforms to remain competitive in the market. The Montreal, Quebec-based financial institution plans to play an active role in the emerging digital world. Robin Arnfield reports

Desjardins (Mouvement des caisses Desjardins in French), an association of savings and credit cooperatives (caisses ) located mostly in Quebec, is the largest Canadian cooperative financial group and the fifth largest in the world with assets of nearly C$251bn ($146bn).

"The digital revolution is rapidly and profoundly transforming the financial services industry where new players like PayPal, Google and Lending Club are making their mark," Monique Leroux , Desjardins’ chair of the board, president and CEO, told the group’s AGM in March 2015. "Desjardins is now part of this reality. We don’t want to be mere observers – we want to play an active role in this digital revolution. While remaining what we are – a cooperative financial group with strong cooperative values – we have chosen to be more innovative."

"Desjardins is evolving in a highly competitive and dynamic business environment," Robert Ouellette, Senior Vice President, Technology and Shared Services Centre Executive Division at Desjardins, told RBI. "Technology enables us to provide better service experiences for our customer base. At Desjardins, we’re committed to innovation and the development of cutting-edge solutions to bring additional value to our clients."

"Desjardins is definitely one of the more innovative financial institutions in Canada," said Christie Christelis, president of Canadian consultancy Technology Strategies International.


Addressing the Montreal Board of Trade in September 2015, Leroux said that between 2008 and 2015 the number of Desjardins customers grew by two million to seven million and that the group’s total revenues grew two-fold to nearly C$15bn.

Leroux told the Globe & Mail that Desjardins Group is planning a measured expansion strategy outside its home province. The Canadian newspaper quoted Leroux as saying that that Desjardins, which currently generates about 35% of its top-line revenue from business outside Quebec, aims to increase that percentage to about 40% over three to five years.
However, instead of making a major acquisition, Desjardins plans to widen its relationship with existing customers by offering them more products while remaining open to opportunistic asset purchases, the Globe & Mail said.


Leroux believes Desjardins has a duty to develop mobility and proximity solutions to meet the needs of its customers. "We’ve set clear innovation and investment priorities to support our members and clients in this fast-changing world," she told the Montreal Board of Trade.

But Leroux acknowledged that mobile services and new technology can’t replace the ‘strong relationship with our members and our clients that we intend to build on’.

"This is what motivated our investment in new spaces, new types of caisses and new client contact centres," Leroux said, referring to Desjardins’ new service centre at Montreal’s Marché Central and the three 360d centres it opened for 18-30 year-olds near University campuses in Montreal.

Digital banking

In 2014, Desjardin’s mobile channel accounted for 11% of total banking transactions, while its online channel accounted for 29%, ATMs 10% and caisses 3%.

"We’re finding that our members use ATMs less and less for paying bills, as they now use our mobile platform," a Desjardins spokesperson told RBI.

During 2014, Desjardins redesigned its AccèsD transactional banking website and AccèsD mobile banking platform.

The enhancements include offering online account-opening at; the January 2014 launch of mobile banking on iPads and Android-based tablets; and Plan Selector, an online tool accessible through AccèsD that automatically suggests the best-value banking plan for members based on their transaction history.

Desjardins also offers the Guaranteed Investment Selector providing personalised investment recommendations based on how customers answer a set of questions, and the Dynamic Market-Linked Guaranteed Investment Return Tracker which monitors the performance of customers’ market-linked guaranteed investments.

In April 2014, Desjardins launched the Hop ‘n S@ve instant savings tool. According to Leroux, Hop ‘n S@ve is the only Canadian banking app allowing customers to save in just one click. "We are happy with how popular the new tool has been with young people," she told the group’s AGM. "It fits especially well with our financial education mission."

Hop ‘n S@ve enables customers to save toward their goals by transferring money into a Desjardins High Interest S@vings Account and create a category such as travel or a specific purchase that they want to save for.

As of March 2015, the 50,000 plus members using Hop ‘n S@ve had collectively saved over C$34m ($26 million), Leroux said.

Hop ‘n S@ve and InstaBalance, Desjardin’s instant balance access tool, are available on the iOS and Android platforms as well as for the Apple Watch and the Android Wear smart watch. InstaBalance provides fast access to customers’ Desjardins caisse accounts and Desjardins credit card and prepaid card account balances without the need to log-in.

Hop’n S@ve and Instabalance are among the most downloaded apps for the Apple Watch, Leroux said.

AccèsD Mobile

Improvements to AccèsD Mobile, which is available on the Android, iOS and Blackberry platforms, include more intuitive navigation, a single log-on for both AccèsD and Desjardins’ digital business banking service AccèsD Affaires, and the ability for users to reactivate their password from their mobile device, Desjardins says. Android- and iOS-based app users can also check their caisse, credit card and prepaid card account balances without having to log in.

Desjardins mobile and online banking customers can now use the Desjardins My Budget tool to manage their budget and review their expenses.

Desjardins has launched AccèsD Assistant, a context-sensitive help tool which helps online and mobile banking customers when they are in the middle of a transaction such as a bill payment or person-to-person transfer and aren’t sure how to proceed.

Mobile insurance apps

Desjardins group insurance policyholders can submit claims in 30 seconds or less using a new mobile app called Claim 360o, which is available on the Android- and ioS platforms and lets them track their mobile claims and most recent reimbursements. Between its launch in March 2014 and December 2014, Claim 360o was downloaded 22,528 times, Leroux said.

Desjardins Insurance’s Ajusto program offers drivers in Quebec and Ontario usage-based discounts that help them save money by incentivising good driving habits. The March 2015 launch of the Ajusto mobile app for smartphones made Desjardins the first Canadian insurer to offer a 100 percent mobile telematics program that doesn’t require drivers to install a device in their car, Leroux said.

Zag Bank

Desjardins’ direct banking subsidiary Zag Bank competes with President’s Choice Financial as well as with Scotiabank’s Tangerine subsidiary which has nearly two million customers.

Scotiabank acquired Tangerine, formerly known as ING Direct Canada, from ING in 2012. President’s Choice Financial is a joint venture between Canadian retailer Loblaw Companies Limited and CIBC.

Customers across Canada can open accounts with Calgary, Alberta-based Zag Bank, except for residents of Quebec where Zag’s products are not available. By contrast, Tangerine and President’s Choice Financial offer accounts everywhere in Canada.

"Zag is designed to meet the needs of Canadians who’re looking for a simple, transparent and straight-forward banking experience," David Raju, Zag Bank’s President and CEO, told RBI.

He added: "We are currently focused on savings accounts."

Zag was originally founded by Alberta-based Western Financial Group in 2003 as Bank West, a federally regulated virtual bank accessible through insurance brokers and customer service agents. Bank West was acquired in 2011 by Desjardins as part of its takeover of Western Financial Group.

In 2014, Desjardins relaunched Bank West as Zag Bank and repositioned it as a direct bank, offering a range of financial products through mobile and online applications and targeting younger consumers.

"Since Zag’s soft launch in June 2015, we’ve seen a steady increase in client acquisitions and engagement with our social media properties," said Raju.

He continued: "Our marketing programme has focused on establishing Zag as a recognised brand in our home market of Alberta, as well as in British Columbia. In 2016, we’ll look to expand awareness of the Zag brand and its easy-banking solutions in other provinces, including Ontario. We’re continually evaluating our options, but there are no immediate plans to launch in Quebec. Our team is focused on establishing Zag Bank as the go-to, easy banking option in the provinces where we operate."

In addition to online access via its website, Zag Bank offers certain deposit products through select brokers, Raju says.

"We’re pleased with the trend of new Zag accounts being opened on a daily basis and are excited that our clients are leveraging a variety of channels to manage their accounts," Raju says. "We remain committed to evolving based on our clients’ feedback, which will influence the product offering and channels in which we service them."

New style branches

In October 2014, Desjardins opened its first 360d centre in Montreal for 18-30 year olds near the Université de Montréal campus. It has since opened two additional 360d branches near the Concordia University and Université du Québec à Montréal (UQAM) campuses in Montreal.

Desjardins says the 360d branches provide a relaxed, high-tech environment with the latest technology including touchscreens where young people can meet with dedicated advisors who provide guidance on products to meet their financial requirements.

The branches include cluster areas specifically designed for customers’ needs such as financing their studies, buying their first car, travelling and entering the labour market. They also offer student-focused activities such as lectures, coaching workshops and mentoring from business leaders, teachers and experts in various industries.

Marché Central

In June 2015, Desjardins opened a new type of branch targeting customers in the 18-50 age group in the Marché Central, a shopping centre in Montreal which receives 10 million visitors a year.

When visitors enter the branch, they are greeted by an advisor who assists them in accessing Desjardins’ complete line of products and services. The branch includes themed areas offering advice tailored to various common goals and situations, as well as interactive technology tools for use by customers.

Desjardins says that, because of its location, the branch reaches a range of ethnic communities in the area, whose population is 70% made up of immigrants. Most of the branch’s staff are from ethnic communities and they speak approximately a dozen languages altogether.

Innovation Lab

In December 2015, Desjardins plans to open the Desjardins Innovation Lab at the Complexe Desjardins office and shopping centre in Montreal.

Leroux told the group’s AGM that Desjardins’ staff and partners will be able to collaborate in the innovation lab’s multidisciplinary environment to design prototypes and explore the most advanced technology.

mPOS launch

In September 2015, Desjardins’ Monetico merchant services business launched Monetico Mobile and Monetico Mobile +, two mPOS payment solutions for small businesses, the self-employed, seasonal workers and mobile merchants such as plumbers.

Monetico, a joint venture between Desjardins and France’s Crédit Mutuel which was established in 2013, competes with Moneris Solutions, Canada’s largest merchant acquirer. Moneris is a joint venture between RBC Royal Bank of Canada and BMO Bank of Montreal.

Both Monetico Mobile and Monetico Mobile + comprise a calculator-sized keypad incorporating an EMV chip card reader and PIN pad which connects via Bluetooth to an Android- or iOS-based smartphone or tablet loaded with the Monetico Mobile app.

Monetico Mobile, which is available free to Desjardins members, is designed for micro-businesses and mobile self-employed workers, a market which Desjardins sees as having growing demand for mPOS technology. Desjardins’ Ouellette told Quebec-based newspaper La Presse that there is a potential market of 100,000 micro-businesses and mobile merchants in Canada.

Monetico Mobile + is designed for businesses with higher transaction volumes which need advanced management features such as the ability to create quotes and invoices and manage their business expenses.

Smartphone payments

In September 2014, Desjardins became the first financial institution in Quebec to launch a service enabling mobile payments from customers’ Android-based smartphones. Customers can make payments using their Desjardins Visa credit card using phones from five Canadian mobile carriers, Bell Mobility, Rogers Communications, Virgin Mobile Canada, Telus Communications, and Koodo Mobile.

Like CIBC, TD, Scotiabank and President’s Choice Financial, Desjardins uses Canadian trusted service provider EnStream’s mobile payments hub to load its customers’ card credentials onto their smartphones across a range of mobile carriers.

Desjardins says its mobile payments service currently only works with NFC-enabled Samsung Galaxy phones, the HTC One M7 and M8 phones and the BlackBerry Bold 9900.

"I think Desjardins’ mobile payments offering is a good start, because it covers all the major Canadian mobile networks," said Technology Strategies International’s Christelis. "However, it very likely has limited uptake at the moment. Also, Desjardins’ mobile payments service works with a limited number of smartphones, but this isn’t a problem unique to Desjardins. The lack of NFC-enabled phones is a constraint on the whole Canadian market at this stage. Eventually, this problem will disappear as every smartphone will have an NFC antenna and NFC SIM card. I estimate that at the end of 2014 there were four million NFC-enabled smartphones in Canada, but the figure is changing fast."

Desjardins says customers wanting to use their smartphones for payments, must apply for an activated NFC SIM card if their phone doesn’t contain an NFC SIM card. "The problem is that only the one percent of customers who are technology innovators is going to request an NFC SIM card," says Christelis. "Another challenge is that customers don’t want the hassle of downloading mobile payment apps and their card credentials onto their smartphone. I’ve found in my research that, if mobile payment apps are preloaded onto a phone, the consumer uptake is much bigger."

Desjardins 2014 key facts

– Over 7 million members
– 45,966 employees
– 360 Desjardins caisses (financial cooperatives) in Quebec and Ontario offering services at 805 outlets
– 2,225 ATMs in Quebec and Ontario
Source: Desjardins Group, 31 December 2014.

Desjardins 2014 social media data

– 215,000 Desjardins Group and caisse followers on Facebook
– 1.8 million views on YouTube
– 15,000 Twitter followers
– 39,000 LinkedIn followers
– 156 Desjardins caisses are on Facebook, and every month over 1.1 million people view content on Desjardins’ Facebook pages.
Source: Desjardins Group, 31 December 2014.

Desjardins posts solid growth

Desjardins posted operating income of C$10.48bn ($7.9bn) for the nine months to end September 2015, an increase of 11.1% year-on-year. Surplus earnings before member dividends increased by 20.8% to C$1.49bn compared to the corresponding period a year ago.
Third quarter operating income for the three months to 30 September grew by 7.4% to C$3.43bn from the same period of 2004, primarily due to premiums from the acquisition of State Farm’s Canadian operations.
Desjardin’s Personal Services and Business and Institutional Services posted surplus earnings of C$703m, up 10.3% for the first nine months of 2015.
Wealth Management and Life and Health Insurance reported surplus earnings for the first three quarters of 2015 of C$376m, up by 18.4% while Property and Casualty Insurance surplus earnings grew by 19.8% to C$217m.
"We are satisfied with these results, which show solid growth in our business operations across Canada in spite of intense competition, thereby demonstrating the relevance of our strategies," said Monique Leroux, chair of the board, president and CEO of Desjardins.
"Economic conditions remain fragile and the effects of the digital revolution are being felt throughout the industry. We have to stay focused and actively continue our efforts to position ourselves in this new environment in order to meet the high expectations of our members and clients."