Five Questions with Borrowell Co-founder & CEO Andrew Graham

Andrew Graham is co-founder and CEO at Borrowell, a financial technology company headquartered in Toronto which focuses on credit information and education. Andrew is also one of Canada’s leading voices on the need for government regulations to enable open banking, a financial system which has been proven to drive innovation and better consumer services.

He recently sat down for a chat with CCI President Benjamin Bergen to talk about what Borrowell does, and why the federal government needs to move urgently on open banking.

This transcript has been edited for length and clarity.

‍

‍

Benjamin Bergen: Thanks for taking the time to talk, Andrew. So, to begin can you give us a bit of background on Borrowell? How did the company get started, and where are you guys at today?

Andrew Graham: So, we’ve always been focused on a problem that is really big and significant for many people, which is helping them make better sense of their finances, and make better decisions around their finances. Our products we offer have evolved over the years, but that idea is central.

When you ask people what the biggest concern is in their lives, again and again, across North America, people will say their finances. So what’s always been True North for us is: How do you help consumers, wherever they are in their financial journey, make better decisions about their finances, and about credit in particular?

We started off with a low-cost, low-interest loan product — delivered digitally. You could check your rate, and your loan qualification almost instantly, which was not available at all at that time. From there, we’ve grown into offering free credit scores — we’re the first company in Canada to do that. And the reason we did that is because we found that many people who were coming to us looking for a loan really had no idea about where they stood from a credit perspective. And they didn’t know how to improve their credit standing, so we wanted to help.

We offer free credit scores, reports, and a whole host of financial education and product recommendations. And we’ve done that now with well over two and a half million people.

BB: That’s exciting stuff, and obviously the growth has been phenomenal. One of the services that you offer, which is pretty novel, is helping renters build credit as they do their payments. What other areas can FinTech help innovate and create new opportunities for consumers?

AG: There’s a lot of work to be done in the credit space. If you think about our ambitious plans as a country to increase the number of new Canadians every year, one of the very challenging aspects of moving to a new country is that you go somewhere new, and your credit doesn’t follow. I’ve experienced this in my life.

We talk to many new Canadians who have moved here recently, and it’s a real struggle to get that first credit card — let alone that first auto loan or first mortgage. So I think it sort of behooves us as a country to help people get on that journey of building credit and being able to access financial products so they can do things like buy a house or buy a car. Our Rent Advantage product which we launched in the summer, is the first of its kind in Canada where you can report your rent payments without going through your landlord — you do it directly through us to Equifax.

And what’s exciting about that is that traditionally rental data hasn’t been widely available in the credit system. You could have someone living in a house as a renter and paying whatever you pay a month, and that traditionally has not counted towards your credit history. And your neighbour next door might own their house paying the exact same amount as a mortgage, but that does count towards their credit history. And look, life’s tough enough already for renters, and many new Canadians end up renting. So let’s make it a more fair system.

And when we talk to mortgage lenders, their response has been very enthusiastic. They’re like, ‘We would love to see data that shows that someone has been paying rent on time every month for the last two years; that’s highly relevant to our lending decisions.’

BB: That’s really great. So, shifting gears just a little bit, let’s talk about open banking. You’re all in, and a lot of the work that you do with CCI is around open banking. For people who are maybe not familiar with it, what is open banking?

AG: What open banking means is giving consumers and small businesses the ability to share their own financial data if they want to. To make it real, let’s talk again about Rent Advantage and rent reporting. How do you prove to a credit bureau that you’re paying rent on time? Well, you do it by showing the rental payments coming out of your bank account. So surely a consumer, if they want to do that, should be allowed to do that. Shouldn’t that be their decision, whether they want to share that data or not?

And yet the reality is that because we don’t have open banking, which is direct access to financial data, we essentially have to collect screen display data to identify their rent transactions. While it works, it just doesn’t work as well as if we were able to directly connect to their bank account and maintain the connection.

We have lots of other ideas, to build new products and services for consumers and small businesses, if consumers and small businesses can easily share their data. There’s lots of other exciting use cases, and I know other companies have ideas too.

BB: Yeah, that’s a really good way to articulate it. Now, open banking is something that the federal Liberal government promised in the 2021 election campaign, and they said they’d have it up and running by the end of 2022.

We’re now lurching into the second month of 2023, and nothing has been delivered. What are your thoughts on it? What do you think it’ll be required to kind of get it past the finish line?

AG: Well, there has been a lot of work undertaken in 2022. We’ve had a lot of consultations and meetings with the government and other business stakeholders, and those have been quite useful. This is a complicated area, and we need to get it right. This is sensitive data we’re talking about. So I think being careful is all well and good, but now’s the time for action.

I certainly give Minister Randy Boissonnault a lot of credit for being very clear about where he wants to go on some of the remaining items like governance and how the system will work overall. But now it really is time to move from discussion to action.

I’m hopeful that we’ll see something soon.

BB: Okay, so we’re cautiously optimistic on this one. But at the same time, we’ve seen a lot of foot-dragging, and some pundits saying we don’t need to bother with open banking at all. Obviously that’s just wrong, but tell me a little bit about the need for urgency here?

AG: What’s interesting is, just last week the Consumer Financial Protection Bureau in the U.S. said that they’re going to charge ahead and publish essentially open banking rules. And depending what those rules look like, the U.S. can really overtake Canada.

We should all be concerned about that; countries like the U.K. and Australia are far far ahead of us. Much of Europe is far ahead of us. And now it looks like the Americans may overtake us as well. So we really do need to get going.

Open banking ultimately, is about giving consumers more control over their data, and that’ll lead to more innovation and more competition — which in turn will offer consumers better products, and a wider selection of products to better manage their finances. In many parts of our economy here in Canada, we need both more innovation and more competition.

The reality is that we still have a very protected financial sector. And I think in financial services, there is a risk that foreign firms will come in and take over certain parts. I think the other risk, though, is that we just sort of coast along with the status quo. And if that happens, you know, we’ll just be really late to the game delivering better products and services to people at lower cost.

‍

The Council of Canadian Innovators is a national business council of more than 150 scale-up technology companies headquartered in Canada. Our members are job-creators, philanthropists and leading commercialization experts in the 21st century digital economy.

‍