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Attitudes towards Technology in Financial Services - Canada - March 2015

“Consumers are looking for new ways to interact with their banks though slower to embrace mobile transactions. While incentives may help to encourage the adoption of mobile banking actions, communicating course of actions and safeguards in-place in case of security breaches should help positively influence adoption of mobile transactions.”
– Carol Wong-Li, Senior Lifestyle Analyst

This report looks at the following areas:

  • Harnessing mobile’s capability to provide information on-the-go
  • Consumers want a more modern in-branch experience
  • Helping parents reach financial goals with PFM tools
  • Customers will respond to incentives
     

The growth in technology has led to big changes in the financial services industry. Virtually all bank account holders are conducting transactions over the internet. The rise of smartphone ownership and corresponding increasing reliance on mobile devices will bring even more changes to the way consumers interact with their banks and manage their finances, particularly with the high level of interest in technology-based offerings and their associated incentives. Gravitation towards technology in the financial service sector will mean concerns regarding the security of transactions and confidence in the ability of financial institutions to keep information safe will need to be addressed.

Notably, advances seen in this sector do not negate the importance of the in-branch experience. Rather, customers are looking for more streamlined interactions made possible by the incorporation of technology.

This report explores the locations in which Canadians hold their accounts (ie traditional branches vs online-only banks), the type of banking actions consumers conduct online and the devices they use to do so, and interest in technology-based products and services by lifestage and demographic groups. The report also explores the attitudes towards specific aspects of technology in the financial services industry.

 

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Table of contents

  1. Introduction

      • Methodology
        • Abbreviations
        • Executive Summary

            • The Market
              • Population changes brings new opportunities
                • The Consumer
                  • PCs and mobile device ownership is high
                    • Figure 1: Device ownership, December 2014
                  • Bank accounts tend to remain at traditional banks, online-only institutions gain traction
                    • Figure 2: Have bank account, December 2014
                  • Internet banking remains more commonly conducted using PCs than on mobile devices
                    • Figure 3: Usage of online banking, December 2014
                  • Whether online or mobile, account monitoring actions are most popular
                    • Figure 4: Banking actions (any device), December 2014
                  • On-the-go rewards resonate, security concerns hinder interest in mobile payment
                    • Figure 5: Interest in products and services, December 2014
                  • Banking customers have confidence in their financial institution’s ability to keep information safe and still value personal service
                    • Figure 6: Attitudes towards technology in financial services, December 2014
                  • What we think
                  • Issues and Insights

                      • Harnessing mobile’s capability to provide information on-the-go
                        • The facts
                          • The implications
                            • Consumers want a more modern in-branch experience
                              • The facts
                                • The implications
                                  • Helping parents reach financial goals with PFM tools
                                    • The facts
                                      • The implications
                                        • Customers will respond to incentives
                                          • The facts
                                            • The implications
                                            • Trend Application

                                                • Trend: Life Hacking
                                                  • Trend: Access All Areas
                                                    • Trend: Help Me Help Myself
                                                    • Market Drivers

                                                      • Key points
                                                        • Demographic overview
                                                          • Canadian population count
                                                            • Figure 7: Share of population of Canada, by territory/province, 2014
                                                          • Canada’s population is aging and will continue to do so in the coming years
                                                            • Figure 8: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                                                          • Economic overview
                                                            • Consumers’ economy to pick up, but risks remain
                                                              • Figure 9: Household disposable income and savings rate in Canada, Q1 2008-Q1 2014
                                                            • Consumer confidence may waver with falling oil prices
                                                              • Canada’s employment rates remain steady
                                                                • Figure 10: Canada’s unemployment rate, by gender, January 2008-January 2014
                                                              • Wealth distribution in Canada
                                                                • Figure 11: Canada median net worth, by province, 2012
                                                            • Innovations in Technology in Financial Services

                                                                • Mobile apps from financial institutions
                                                                  • PC Plus
                                                                    • Cineplex-SCENE
                                                                      • Tangerine Bank’s biometric tools for mobile banking
                                                                        • TD Bank app helps customers pinch pennies
                                                                          • In-branch innovations
                                                                            • New RBC location replaces cashier's counter with work stations and touch screens
                                                                              • TD’s new concept “Green Branch”
                                                                                • Finance Management Platforms and Apps
                                                                                  • myFinanceTracker from RBC
                                                                                    • Mint
                                                                                      • BillGuard
                                                                                        • Money transfer through social media
                                                                                          • Snapchat
                                                                                            • Venmo payments
                                                                                              • Ribbon
                                                                                                • Mobile payment innovations
                                                                                                  • Apple Pay
                                                                                                    • Intuit’s GoPayment
                                                                                                      • Square Reader (Square Register App)
                                                                                                        • Wearable payment innovations
                                                                                                          • RBC and Nymi
                                                                                                            • Scotiabank and Quick Balance smartwatch app
                                                                                                            • Financial Institution Overview

                                                                                                                • Banks with Traditional Branches
                                                                                                                  • TD Financial Group
                                                                                                                    • RBC
                                                                                                                      • Bank of Montreal (BMO)
                                                                                                                        • Scotiabank
                                                                                                                          • Credit Unions
                                                                                                                            • Meridian Credit Union
                                                                                                                              • Vancity
                                                                                                                                • Online-Only Banks
                                                                                                                                  • Tangerine Bank (formerly ING Direct)
                                                                                                                                  • The Consumer – Device Ownership

                                                                                                                                    • Key points
                                                                                                                                      • Ownership of personal computers and mobile devices is high
                                                                                                                                          • Figure 12: Device ownership, December 2014
                                                                                                                                        • Differences in ownership of mobile devices
                                                                                                                                          • Figure 13: Device ownership, by age, December 2014
                                                                                                                                        • Tablet ownership varies less by age
                                                                                                                                        • The Consumer – Bank Account Ownership

                                                                                                                                          • Key points
                                                                                                                                            • Virtually all Canadians hold a bank account
                                                                                                                                              • Figure 14: Have bank account, December 2014
                                                                                                                                            • Most have their accounts with traditional branches
                                                                                                                                              • Figure 15: Location of account, December 2014
                                                                                                                                          • The Consumer – Usage of Online Banking and Preferred Devices

                                                                                                                                            • Key points
                                                                                                                                              • Most account holders use online banking
                                                                                                                                                • Figure 16: Usage of online banking, December 2014
                                                                                                                                              • Virtually all conduct online banking on personal computers and about half use mobile devices
                                                                                                                                                • Figure 17: Devices used for banking actions, December 2014
                                                                                                                                              • Barriers to mobile banking centre around motivation and security
                                                                                                                                                • Figure 18: Barriers to online banking via a mobile device, December 2014
                                                                                                                                              • Older consumers need motivation, younger consumers want security and functionality
                                                                                                                                              • The Consumer – Electronic Banking Actions and Devices

                                                                                                                                                • Key points
                                                                                                                                                  • Online banking actions centre around account monitoring
                                                                                                                                                    • Figure 19: Banking actions (any device), December 2014
                                                                                                                                                  • Seniors are more conservative, younger consumers go beyond the basics
                                                                                                                                                    • Figure 20: Banking actions (any device), by age, December 2014
                                                                                                                                                  • Leveraging mobile banking to address needs
                                                                                                                                                    • Figure 21: Devices used for banking actions, December 2014
                                                                                                                                                  • Simplifying in-branch transactions
                                                                                                                                                  • The Consumer – Interest in Technology-based Banking Products and Services

                                                                                                                                                    • Key points
                                                                                                                                                      • Mobile apps from banks have traction in terms of usage
                                                                                                                                                        • Figure 22: Interest in products and services, December 2014
                                                                                                                                                      • Banks’ mobile apps skews towards younger users
                                                                                                                                                        • Customers want rewards on-the-go and mobile cheque deposit
                                                                                                                                                          • Figure 23: Interest in products and services: do not use but would be interested in using, December 2014
                                                                                                                                                        • Products and services more appealing to men and younger customers
                                                                                                                                                          • Rewards positively influence usage
                                                                                                                                                            • Younger banking customers want mobile cheque deposit
                                                                                                                                                              • PFM tools pique the interests of parents
                                                                                                                                                                • Mobile payment is of interest to younger consumers, security remains a concern
                                                                                                                                                                • The Consumer – Attitudes towards Technology in Financial Services

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Summary of attitudes towards technology in financial services
                                                                                                                                                                      • Figure 24: Attitudes towards technology in financial services, December 2014
                                                                                                                                                                    • Customers have confidence in their banks
                                                                                                                                                                      • Figure 25: Attitudes towards technology in financial services (security & trust), December 2014
                                                                                                                                                                    • Middle-aged customers show softer trust and confidence in bank security
                                                                                                                                                                      • Leveraging mobile capabilities as a new channel of service delivery
                                                                                                                                                                        • Figure 26: Attitudes towards technology in financial services (satisfaction with mobile/online capabilities & perceived differentiation), December 2014
                                                                                                                                                                      • Banking customers want incentives and still value personal service
                                                                                                                                                                        • Figure 27: Attitudes towards technology in financial services (in-branch value & receptivity towards incentives), December 2014
                                                                                                                                                                      • Rewards and linkages to PFMs appeal to parents and younger customers
                                                                                                                                                                        • Quebecers are polarized in their perceptions of financial institutions
                                                                                                                                                                            • Figure 28: Attitudes towards technology in financial services: Quebec against overall population, December 2014
                                                                                                                                                                        • The Consumer – Attitudes towards Technology in Financial Services and Chinese Canadians

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Chinese Canadians prioritize savings
                                                                                                                                                                              • Greater propensity to own a savings account
                                                                                                                                                                                • Figure 29: Device ownership: Chinese Canadians vs overall population, December 2014
                                                                                                                                                                                • Figure 30: Have bank account: Chinese Canadians vs overall population, December 2014
                                                                                                                                                                              • Their interest in technology extends into financial services
                                                                                                                                                                                  • Figure 31: Interest in products and services (use services): Chinese Canadians vs overall population, December 2014
                                                                                                                                                                                  • Figure 32: Interest in products and services (do not use but would be interested in using): Chinese Canadians vs overall population, December 2014
                                                                                                                                                                                • Agreement to attitudinal statements reflect higher usage
                                                                                                                                                                                    • Figure 33: Attitudes towards technology in financial services: Chinese Canadians against overall population, December 2014
                                                                                                                                                                                • The Consumer – Target Groups

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • Four Target Groups
                                                                                                                                                                                      • Figure 34: Target groups for attitudes towards technology in financial services, December 2014
                                                                                                                                                                                    • Tech Enthusiasts (32%)
                                                                                                                                                                                      • Conservative (25%)
                                                                                                                                                                                        • Convenience-Driven (22%)
                                                                                                                                                                                          • Disengaged (21%)

                                                                                                                                                                                          Companies Covered

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                                                                                                                                                                                          Attitudes towards Technology in Financial Services - Canada - March 2015

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