Opinion: Equitable Bank’s nesto Gamble

The government's First-Time Home Buyer Incentive 2.0 came into effect on Monday, enhancing the eligibility criteria for buyers in Toronto, Vancouver and Victoria. Equitable Bank launched the "Mortgage Marketplace" on its eqbank.ca website, allowing customers to choose from over 2,000 mortgage products from a wide array of broker lenders. The recommendation engine will weigh things like down-payment trade-offs, need for a HELOC, fixed vs. variable criteria, prepayment needs, product restrictions, and more. Equitable Bank's SVP & Group Head, Personal Banking, Mahima Poddar, provided needed perspective on why Equitable chose this strategy. The Mortgage Marketplace was established based on EQ Bank digital deposit customer feedback that they wanted the best broker-provided rates on Equitable Bank mortgage products, a seamless online experience, and personalized advice from a mortgage broker.

EQ Bank is not a direct investor in nesto, but is an investor in Portag3 Ventures. EQ Bank is not alienating brokers with this arrangement, as it is bringing the value of the broker channel to a client base that may otherwise never experience it. Nesto does not receive favourable pricing from Equitable outside of what would be available to other brokerages. Equitable Bank chose to partner with Nesto, a broker-channel participant, to sell mortgages to eqbank.ca deposit customers with minimal IT investment. Nesto gets the same rates as other top-volume brokers, and any broker can get better rates than Nesto if they reach Equitable's top status tier of $100 million. The takeaway is that diversifying distribution and cross-selling to a captive audience are key to any bank's growth, and brokers should be borrowing ideas from Nesto to make their own businesses stronger.