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The move comes as BMO cuts costs and seeks more growth from digital channels such as smartphones.

Fred Lum/The Globe and Mail

Bank of Montreal is taking the next step in its digital strategy by allowing time-pressed customers to open accounts on their smartphones as consumers increasingly do their banking on mobile devices.

BMO, Canada's fourth-largest bank by assets, says its new service lets eligible customers set up a chequing or savings account in minutes without requiring them to go to a branch or download a mobile app. New accounts can be approved on the spot and customers gain immediate access to BMO's mobile banking platform without the need for a physical card.

The service is being introduced as BMO, like the other large Canadian banks, is cutting costs and seeking more growth from digital channels such as smartphones.

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Lenders are introducing new mobile-based technologies, partly to attract new customers, including tech-savvy millennials, as they face increasing competition from a growing crop of financial-technology startups. It is also a bid by BMO to attract a larger portion of the more than one million Canadians who switch banks every year, the bank said.

"What this offers people who are currently either about to or want to switch banks [is] a compelling, easy-to-use, fast, mobile-first ability to do this," Niti Badarinath, BMO's head of North American channels, said in a telephone interview on Thursday. "That's what this is about."

The new feature, which will be announced by the bank on Friday, is part of the evolution in digital banking, which has banks racing to satisfy their clients' need for speed, ease of use and convenience. At the same time, it enables the bank to automate more of its processes and standardize customer experience.

"This is not BMO building something to drive customers away from any existing channel, but to essentially follow an accelerating customer trend that is already happening," Mr. Badarinath said.

The switch to virtual interactions is happening rapidly. Over the past two years, BMO said it has recorded a 20-per-cent increase in digital transactions for its domestic banking business – a trend that is expected to increase in the coming years.

New rules have made activating client accounts on the Internet possible. But not everyone can sign up this way.

BMO requires applicants to share their social insurance number during the sign-up process. This allows the bank to check a person's identity and financial history with a credit bureau and meet its anti-money-laundering and so-called know-your-client requirements in real time.

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"People need to be in the country for at least three years and have a bureau file that allows us to do remote, real-time authentication and credentialling," he said.

The banking industry's digital shift also comes at a time when lenders are paring expenses.

For its part, BMO said in May that it plans to cut about 4 per cent of its work force. Based on the bank's latest head count, the reduction could amount to 1,800 jobs.

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