Alterna's Robert Paterson on Purpose-Driven Banking in the Digital Age

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Alterna Savings is one of Canada’s oldest financial institutions. It was established in 1908 – the same year that the first coin was minted in Canada.

We sat down with Robert Paterson, CEO and president of Alterna Savings and Alterna Bank, to talk about how the institution’s 110-year history informs the way it does business in today’s digital marketplace. We learned how Alterna puts community before profit, partnerships before competition, and empathy at the center of its product design.

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No time? No worries! Read our 4 key takeaways from the conversation

Banking is about communities

Don’t believe the investment banking hype. Banking always was — and still is — about communities: creating jobs, supporting businesses and facilitating life-changing decisions like buying a home. It can sometimes be difficult to remember that amid today’s capital-frenzied financial landscape.

Fintechs are banks’ friends not foes

Fintechs have often been pitted against traditional banks, deemed upstart challengers that threaten business. Alterna’s digital transformation, which has been powered by productive partnerships with fintech companies, says otherwise. The credit union relishes the opportunity to partner, trumpet and learn from bright young companies. Plus: When the Canadian fintech community flourishes, the country prospers. It’s win-win-win.

It’s the ‘why’ that matters most

Fintechs looking for investment need to care passionately about their product. Alterna looks for companies with long-term visions of how to scale their idea and improve consumers’ lives. Companies looking to offload their business at the first possible opportunity should think again.

Ideas are important, but articulation is key

Successful fintech companies don’t necessarily have the freshest ideas. What they do have is the ability to explain their offering in a way that resonates to a broad audience.

Here are a few highlights from our conversation.

Alterna's CEO Robert Paterson visited Flinks' office in Montreal.

Banking with purpose

Simon: There’s something very special about Alterna’s mission, so maybe you can start by telling us more about that.

Robert: Alterna was created 110 years ago. We were created to really do something different in the banking space, and it was to make a difference in people’s lives. Fast forward a hundred years, and we decided to take what we’re doing in the Ottawa area and Toronto, and take it nationally.

“Our big focus is this: we want to be the good in banking.”

We want to return back to when a bank was part of a community. It helped accelerate the growth of a community. And so we’re not about profits for profits’ sake. We’re about profits for a purpose, and that purpose is really our members and our customers’ wellbeing.

I started my career in the 80s when banking was still fairly traditional. The landscape changed. The investment bankers took over big banks. They got far more aggressive and focused on bottom line profits. Banking fees were no longer about investment for future development, it was just to pad profits. A lot of the FI (financial institutions) lost connections.

Building with empathy

Simon: What specifically in the Canadian banking and financial services landscape is ripe for change?

Robert: I think the digital space is the transformation. Canadians are looking for an empathetic and authentic financial institution that is truly going to talk to them in an honest way. They’re looking for someone to come and provide that content and that interaction in a digital fashion, because they’re time-starved.

We think the Canadian population is looking for someone who’s really going to embrace them and really be concerned about their wellbeing. And then deliver that frictionless digital experience that doesn’t overreach for personal information from them.

It’s about people. At the end of the day, we need to be focused on individuals and communities. We’re going to have great lives, and our children are going to have great lives, if we’re part of something that helps us prosper.

Simon: As a credit union driven by strong values, how do you approach innovation — especially in a market that’s being disrupted.

Robert: The big difference is that we put you and your family there. I’ll use home buying as an example. We sat down and we said: we want a digital mortgage process. There wasn’t one in Canada.

There was a lot of false advertising about being pre-approved, but on a lot of these websites when you went in it said: “please call us or come and see us, we need more information.” The way they architect that experience is to give them all this information and then you’re going to get phone calls, emails and text messages spamming you.

So we said look: what does an individual want, what’s the best thing that we can do for this life-experience of buying a home. And we said: we’re going to give you direct access to the calculators, partner up with fintechs to help you find real estate agents, help you better understand the housing market.

And we’re never going to ask you anything. Even if you decide not coming to us for your mortgage, you can just go and educate yourself.

The power of partnerships

Robert: Partnering makes us stronger. You help us. You come in and help move our culture. You come in as a young 53-employee company at Flinks and you instill an agile workplan in a 110-year old organization. Our team gets to be ignited by that, excited by that, and develop their skills alongside you. The benefits to us as a culture and organization is huge.

“We are not threatened by [fintechs]. We don’t take the view internally that we want to do this ourselves. We don’t want to compete with you. We look out there and say, we’re small, you’re small. So, let’s come together and make something fantastic.”

We don’t want to grow if you can’t grow. We want to help commercialize your idea, get it to the market and for you to be so successful that you employ 1,000 more Canadians in high paying jobs in the tech space and that you are able to open offices across the country. That makes Canada prosperous.

I always ask the question [of fintechs]: ‘Why are you doing this, what is it you are trying to do?’ And some clearly want to get a user base of X and then sell. We try and stay away from those organizations.