Scotiabank teams up with fintech lender

Bank of Nova Scotia is the latest investor in Atlantabased fintech lender Kabbage to expand the relationship into a partnership that will see the Canadian bank’s customers get access to small business loans through Kabbage’s online financial technology platform.

Scotia customers in Canada and Mexico will be able to apply for and access small business loans of up to $ 100,000 “in as little as seven minutes” through the fully automated platform, the companies said Wednesday.

Scotia participated in a financing round last fall in which Kabbage raised US$135 million from investors that also included international banks ING and Santander. Santander and ING subsequently partnered with Kabbage to offer loans to small and medium- sized businesses in the United Kingdom and Europe on the fintech firm’s platform.

As a group, fintechs use online applications and electronically gathered data to make quicker decisions than traditional banks. Large banks have been increasingly investing in and partnering with the upstart firms.

“Small businesses are a very important customer segment … and this partnership is an example of how banks and fintechs are working together to provide customers with a better banking experience,” James O’ Sullivan, head of Canadian banking at Scotia, said in a statement.

Postmedia Network Inc., owner of the Financial Post, has a marketing and revenue sharing agreement with a fintech lender, Vancouverbased Mogo Financial Technology Inc.