Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Meridian’s Motusbank Winds Down After 6 Years
Fintech in Canada | March 31, 2025
Image: Freepik
Motusbank will shut down by 2026 as accounts move to Meridian and Coastal Capital Savings
In early Q2 2019, Ontario's largest credit union, Meridian Credit Union launched a digital only bank called motusbank, now after 6 years in operation, motusbank is shutting down. In a joint announcement, Meridian and Coast Capital Savings confirmed they will take over motusbank’s accounts and assets by early 2026, pending regulatory approval. This marks the end of motusbank's short run as a national online bank. It was meant to be Meridian's vehicle for expanding across Canada but it struggled to reach sufficient scale to remain viable long term.
Why Did motusbank Shut Down?
According to the announcement, despite having national ambitions, motusbank only reached 16,000 members by 2025. It highlights that competing in Canada's banking markets without branches or significant branding, or a strong digital acquisition strategy, is a grind.
See: Will Competition Reforms Boost Fintech? Inside the Fight
The pandemic also hurt smaller banks, but the stiff competition from bigger players like EQ Bank, Tangerine, and Simplii who have more brand recognition, marketing might and deeper pockets was a headwind.
Additionally, there was a leadership change in January 2022 when Jan-Ann Gilfoy was appointed President and CEO of both Meridian and motusbank. motusbank was pushed by Meridan's previous CEO, and now new leadership is emphasizing local growth, cooperative values, and is aiming to deepen relationships with existing members (customers).
Jay-Ann Gilfoy, CEO of Meridian and motusbank:
“We’ve made the decision to sharpen our focus on the growth and success of Meridian.”
Implications and Reactions
👉 Loans originated in Ontario like mortgages and HELOCs will transfer to Meridian starting May 2025. Deposit accounts and loans outside of Ontario will be transferred to Coast Capital Savings.
For customers, this news is obviously an inconvenience but their funds remain insured and most customers don't need to do anything for now, as the transition will happen automatically.
For industry however, news of motusbank's closure shows that without deep pockets, unique value proposition, a strong digital marketing acquisition strategy, and strong brand, being 'digital only with low fees' may not be enough. Compare and contrast the approach to Robinhood's wealthtech push and lifestyle finance offering.
See: Open Banking Delayed to 2026, Favours Banks Over Innovation
This is a quiet exit from the digital banking space, but it says a lot. According to Reddit users commenting on motusbank shutting down, many saw this coming and pointed to the outdated app, slower innovation and lack of aggressive growth.
One user said, “Motusbank has been pretty much on life support through the pandemic.”
Others said they’ll likely switch banks unless Coast Capital can impress them. Some are locked in for now, like one poster with a GIC maturing in 2027.
Closing Outlook
Neo, challenger, and digital-first banks should sit up and take notice, given that motusbank was one of Canada's few fully digital banks not owned by one of the incumbent banks. The message is pretty clear, convenience and low fees must be paired with innovation, strong growth strategy, size/trust and scale.
Given the dominance of Canada's banks and the governments hesitance to open up more competition in the banking sector, it's harder and harder to go it alone and customers will suffer with limited choice for innovative alternatives and high fees. The Crisis Canada and Fintech Can’t Afford to Waste
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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