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Canadian Banks and Credit Unions - April 2010

This report builds on several previous Mintel studies, including Canadian Credit Cards – September 2009, Canadian Banks and Credit Unions – May 2008, US and Canadian Credit Unions – May 2007, and Canadian Banking – January 2007. It examines the trends and opportunities within the Canadian financial sector. It also provides an overview of how Canadian banking products are being received by the Canadian consumer, and makes suggestions about how those consumers will look at those products in the future. This report also provides an in-depth look at consumer attitudes about the financial industry in general—especially as it relates to loyalty, savings and retirement.

Some additional topics discussed in this report include:

  • The Canadian banking system is highly concentrated; the top five banks have about an 80% market share
  • Recent immigrants are the hottest new market for Canadian banks as the immigrant population is driving the growth of the country
  • There is concern in Canada about mounting consumer debt and fast-growing housing prices. However, a replay of the US debacle seems unlikely
  • Consumers are loyal to their financial services providers. Nearly 95% say there is less than a 50-50 chance they would switch banks at this stage of their lives, which means that cross-selling to existing customers is extremely important

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Table of contents

  1. Scope and Themes

    • Scope of this report
      • What you need to know
        • Data sources
          • Consumer survey data
            • Advertising Creative
              • Abbreviations
                • Terms
                  • Companies mentioned in this report:
                  • Executive Summary

                    • Industry overview
                      • Competitive context
                        • Segment performance
                          • Market drivers: Immigration fuels population growth
                            • The consumer – where they bank
                              • Consumer attitudes towards bank products and services
                                • Advertising and promotion
                                • Insights and Opportunities

                                  • Banks are under-represented in handling retirement accounts
                                    • New immigrants to Canada are an attractive niche
                                      • Networking sites grow as avenue for bank communications, e-commerce
                                        • Larger households with children make attractive customers
                                        • Inspire Insights

                                            • Text Me and I’ll Save More
                                              • What’s it about?
                                                • Implications
                                                  • Thank You
                                                    • What we’ve seen
                                                      • Implications
                                                      • The Canadian Banking Market

                                                        • Key points
                                                          • World’s safest banks – Canadian banks
                                                            • Figure 1: Rankings for the world’s safest banks, Global finance magazine, October 2009
                                                            • Figure 2: Financial results at the big five Canadian banks, 2009
                                                          • The pressure to invest
                                                          • Competitive Context

                                                            • Key points
                                                              • Types of banks and bank regulation in Canada
                                                                • Credit unions and caisses populaires
                                                                    • Figure 3: Big five Canadian banks – total assets, deposits and market capitalization, 2008 and 2009
                                                                • Segment Performance

                                                                  • Key points
                                                                    • Increasing worry about consumer finances
                                                                      • Growing consumer debt loads worry the Bank of Canada
                                                                        • The housing bubble
                                                                          • A U.S.-type scenario is unlikely in Canada
                                                                          • Market Drivers: Immigration Fuels Population Growth

                                                                            • Key points
                                                                              • Immigrant population by place of birth and period of immigration
                                                                                • Figure 4: Top 10 countries of origin for immigrants, ranked by 2001-2006 immigration numbers
                                                                                • Figure 5: Canadian population, by province, 2004-08
                                                                            • Leading Companies

                                                                              • Key points
                                                                                • Royal Bank of Canada
                                                                                  • TD Bank (Toronto-Dominion)
                                                                                    • Bank of Nova Scotia (Scotiabank)
                                                                                      • Bank of Montreal (BMO)
                                                                                        • CIBC (Canadian Imperial Bank of Commerce)
                                                                                          • Desjardins Group (Fédération des Caisses Desjardins du Québec)
                                                                                            • National Bank Financial Group
                                                                                              • President’s Choice Financial (PC)
                                                                                                • Canadian Tire Financial Services
                                                                                                  • HSBC Bank Canada
                                                                                                    • ICICI Bank Canada
                                                                                                      • MBNA Canada Bank
                                                                                                        • Vancouver City Savings Credit Union (Vancity)
                                                                                                          • Coast Capital Savings
                                                                                                            • Servus Credit Union
                                                                                                              • Meridian Credit Union
                                                                                                                • Conexus
                                                                                                                  • Steinbach Credit Union
                                                                                                                  • Innovation and Innovators

                                                                                                                    • Key points
                                                                                                                      • Only a few banks target new Canadian immigrants
                                                                                                                        • RBC Welcome to Canada package
                                                                                                                          • Figure 6: RBC print ad, September 2009
                                                                                                                        • CIBC newcomer to Canada plan
                                                                                                                          • Figure 7: CIBC print ad, October 2009
                                                                                                                        • Scotiabank StartRight program for newcomers
                                                                                                                          • Figure 8: ScotiaBank print ad, August 2009
                                                                                                                        • Money transfers to India from ICICI Bank Canada
                                                                                                                          • Figure 9: ICICI Bank announcement flyer, August 2009
                                                                                                                        • Capital One guaranteed MasterCard for newcomers
                                                                                                                          • Figure 10: Capital One direct mail ad, May 2009
                                                                                                                      • Advertising and Promotion

                                                                                                                        • Key points
                                                                                                                          • Overview
                                                                                                                            • Introducing CIBC Mobile banking
                                                                                                                              • Figure 11: CIBC statement mailing, December 2009
                                                                                                                            • Mobile banking from coastal community credit union
                                                                                                                              • Figure 12: Coastal Community Credit Union statement Mailing, December 2009)
                                                                                                                            • RBC mobile banking and insurance products
                                                                                                                              • Figure 13: RBC statement mailing, November 2009
                                                                                                                            • Mobile banking from Citizens Bank of Canada
                                                                                                                              • Figure 14: Citizens Bank of Canada Statement Mailing, March 2009
                                                                                                                            • No fee banking and rewards from President’s Choice
                                                                                                                              • Figure 15: President’s Choice direct mail advertisement, October 2009
                                                                                                                            • Investment savings account from ING Direct
                                                                                                                              • Figure 16: ING Direct direct mail advertisement, June 2009
                                                                                                                            • High interest savings account from Canadian Tire
                                                                                                                              • Figure 17: Canadian Tire direct mail advertisement, April 2009
                                                                                                                            • Tax-free savings account from Bank of Montreal
                                                                                                                              • Figure 18: BMO print advertisement, February 2009
                                                                                                                            • High-interest savings account from Coast Capital Savings
                                                                                                                              • Figure 19: Coast Capital print advertisement, February 2009
                                                                                                                            • Online safety brochure from Toronto-Dominion
                                                                                                                              • Figure 20: Toronto-Dominion brochure, November 2009
                                                                                                                            • Signature no limit banking account for new graduates from RBC
                                                                                                                              • Figure 21: Royal Bank of Canada direct mail advertisement, July 2009
                                                                                                                          • The Consumer

                                                                                                                            • Key points
                                                                                                                              • Where people bank: More than two thirds prefer big national banks
                                                                                                                                  • Figure 22: Type of institution banked with, by gender, January 2010
                                                                                                                                  • Figure 23: Type of institution banked with, by age, January 2010
                                                                                                                                  • Figure 24: Type of institution banked with, by household income, January 2010
                                                                                                                                  • Figure 25: Type of institution banked with, by household income, January 2010
                                                                                                                                  • Figure 26: Type of institution banked with, by race/ethnicity, January 2010
                                                                                                                                  • Figure 27: Type of institution banked with, by education, January 2010
                                                                                                                                  • Figure 28: Type of institution banked with, by household size, January 2010
                                                                                                                                  • Figure 29: Type of institution banked with, by province, January 2010
                                                                                                                                  • Figure 30: Type of institution banked with, by gender and household income, January 2010
                                                                                                                                • Products and services Canadians have at their primary bank
                                                                                                                                    • Figure 31: Types of accounts at primary bank, by gender, January 2010
                                                                                                                                    • Figure 32: Types of accounts at primary bank, by age, January 2010
                                                                                                                                    • Figure 33: Types of accounts at primary bank, by household income, January 2010
                                                                                                                                    • Figure 34: Types of accounts at primary bank, by household income, January 2010
                                                                                                                                    • Figure 35: Types of accounts at primary bank, by household size, January 2010
                                                                                                                                    • Figure 36: Types of accounts at primary bank, by employment status, January 2010
                                                                                                                                    • Figure 37: Types of accounts at primary bank, by province, January 2010
                                                                                                                                    • Figure 38: Types of accounts at primary bank, by marital status and children in the household, January 2010
                                                                                                                                    • Figure 39: Types of accounts at primary bank, by gender and household ncome, January 2010
                                                                                                                                  • Activities banking customers perform online
                                                                                                                                      • Figure 40: Type of banking activities performed online, by gender, January 2010
                                                                                                                                      • Figure 41: Type of banking activities performed online, by age, January 2010
                                                                                                                                      • Figure 42: Type of banking activities performed online, by household income, January 2010
                                                                                                                                      • Figure 43: Type of banking activities performed online, by race/ethnicity, January 2010
                                                                                                                                      • Figure 44: Type of banking activities performed online, by education, January 2010
                                                                                                                                      • Figure 45: Type of banking activities performed online, by province, January 2010
                                                                                                                                      • Figure 46: Type of banking activities performed online, by marital status and children in the household, January 2010
                                                                                                                                    • Mobile banking: Nearly half have concerns
                                                                                                                                        • Figure 47: Attitudes concerning banking via cell phone, by gender, January 2010
                                                                                                                                        • Figure 48: Attitudes concerning banking via cell phone, by age, January 2010
                                                                                                                                        • Figure 49: Attitudes concerning banking via cell phone, by household income, January 2010
                                                                                                                                        • Figure 50: Attitudes concerning banking via cell phone, by race/ethnicity, January 2010
                                                                                                                                        • Figure 51: Attitudes concerning banking via cell phone, by education, January 2010
                                                                                                                                        • Figure 52: Attitudes concerning banking via cell phone, by province, January 2010
                                                                                                                                      • Banking rewards
                                                                                                                                          • Figure 53: Attitudes towards bank products and rewards, by gender, January 2010
                                                                                                                                          • Figure 54: Attitudes towards bank products and rewards, by age, January 2010
                                                                                                                                          • Figure 55: Attitudes towards bank products and rewards, by household income, January 2010
                                                                                                                                          • Figure 56: Attitudes towards bank products and rewards, by race/ethnicity, January 2010
                                                                                                                                          • Figure 57: Attitudes towards bank products and rewards, by household size, January 2010
                                                                                                                                          • Figure 58: Attitudes towards bank products and rewards, by education, January 2010
                                                                                                                                          • Figure 59: Attitudes towards bank products and rewards, by marital status and presence of children, January 2010
                                                                                                                                          • Figure 60: Attitudes towards bank products and rewards, by gender and household income, January 2010
                                                                                                                                        • How often do Canadians switch banks? Not very
                                                                                                                                            • Figure 61: Number of times switched banks in past five years, by gender, January 2010
                                                                                                                                            • Figure 62: Number of times switched banks in past five years, by age, January 2010
                                                                                                                                            • Figure 63: Number of times switched banks in past five years, by household income, January 2010
                                                                                                                                            • Figure 64: Number of times switched banks in past five years, by race/ethnicity, January 2010
                                                                                                                                            • Figure 65: Number of times switched banks in past five years, by children in the household, January 2010
                                                                                                                                            • Figure 66: Number of times switched banks in past five years, by education, January 2010
                                                                                                                                            • Figure 67: Number of times switched banks in past five years, by province, January 2010
                                                                                                                                            • Figure 68: Number of times switched banks in past five years, by gender and presence of children, January 2010
                                                                                                                                            • Figure 69: Number of times switched banks in past five years, by gender and age, January 2010
                                                                                                                                          • How likely are Canadians to switch banks right now?
                                                                                                                                              • Figure 70: Likelihood of switching banks, by gender, January 2010
                                                                                                                                              • Figure 71: Likelihood of switching banks, by age, January 2010
                                                                                                                                              • Figure 72: Likelihood of switching banks, by household income, January 2010
                                                                                                                                              • Figure 73: Likelihood of switching banks, by race/ethnicity, January 2010
                                                                                                                                              • Figure 74: Likelihood of switching banks, by household size, January 2010
                                                                                                                                              • Figure 75: Likelihood of switching banks, by education January 2010
                                                                                                                                              • Figure 76: Likelihood of switching banks, by province, January 2010
                                                                                                                                              • Figure 77: Likelihood of switching banks, by gender and presence of children, January 2010
                                                                                                                                              • Figure 78: Likelihood of switching banks, by gender and household income, January 2010
                                                                                                                                            • Why customers would switch banks
                                                                                                                                                • Figure 79: Reasons for switching banks, by gender, January 2010
                                                                                                                                                • Figure 80: Reasons for switching banks, by age, January 2010
                                                                                                                                                • Figure 81: Reasons for switching banks, by household income, January 2010
                                                                                                                                                • Figure 82: Reasons for switching banks, by race/ethnicity, January 2010
                                                                                                                                                • Figure 83: Reasons for switching banks, by education, January 2010
                                                                                                                                                • Figure 84: Reasons for switching banks, by household size, January 2010
                                                                                                                                                • Figure 85: Reasons for switching banks, by employment status, January 2010
                                                                                                                                                • Figure 86: Reasons for switching banks, by province, January 2010
                                                                                                                                                • Figure 87: Reasons for switching banks, by gender and presence of children, January 2010
                                                                                                                                                • Figure 88: Reasons for switching banks, by gender and income, January 2010
                                                                                                                                              • Products with rewards at primary bank: Many don’t know about them
                                                                                                                                                  • Figure 89: Incidence of products with rewards, by gender, January 2010
                                                                                                                                                  • Figure 90: Incidence of products with rewards, by age, January 2010
                                                                                                                                                  • Figure 91: Incidence of products with rewards, by household income, January 2010
                                                                                                                                                  • Figure 92: Incidence of products with rewards, by race/ethnicity, January 2010
                                                                                                                                                  • Figure 93: Incidence of products with rewards, by household size, January 2010
                                                                                                                                                  • Figure 94: Incidence of products with rewards, by education, January 2010
                                                                                                                                                  • Figure 95: Incidence of products with rewards, by province, January 2010
                                                                                                                                                  • Figure 96: Incidence of products with rewards, by gender and presence of children, January 2010
                                                                                                                                                  • Figure 97: Incidence of products with rewards, by gender and household income, January 2010
                                                                                                                                              • Cluster Analysis

                                                                                                                                                  • Shoppers
                                                                                                                                                    • Who they are
                                                                                                                                                      • Opportunity
                                                                                                                                                        • Basics
                                                                                                                                                          • Who they are
                                                                                                                                                            • Opportunity
                                                                                                                                                              • Stabilizers
                                                                                                                                                                • Who they are
                                                                                                                                                                  • Opportunity
                                                                                                                                                                    • Cluster characteristics
                                                                                                                                                                      • Figure 98: Canadian banking clusters, January 2010
                                                                                                                                                                      • Figure 99: Type of institution used, by Canadian banking clusters, January 2010
                                                                                                                                                                      • Figure 100: Attitudes towards banking activities, by Canadian banking clusters, January 2010
                                                                                                                                                                      • Figure 101: Attitudes towards debit and credit cards, by Canadian banking clusters, January 2010
                                                                                                                                                                      • Figure 102: Reasons for switching banks, by Canadian banking clusters, January 2010
                                                                                                                                                                    • Cluster demographics
                                                                                                                                                                      • Figure 103: Canadian banking clusters, by gender, January 2010
                                                                                                                                                                      • Figure 104: Canadian banking clusters, by age group, January 2010
                                                                                                                                                                      • Figure 105: Canadian banking clusters, by household income group, January 2010
                                                                                                                                                                      • Figure 106: Canadian banking clusters, by race, January 2010
                                                                                                                                                                    • Cluster methodology
                                                                                                                                                                    • Appendix: Trade Associations and Agencies

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      • American Express Company (The)
                                                                                                                                                                      • Bank of America Corporation
                                                                                                                                                                      • Bank of Montreal
                                                                                                                                                                      • Bank of Nova Scotia
                                                                                                                                                                      • Barclays Bank plc
                                                                                                                                                                      • Best Western International Inc.
                                                                                                                                                                      • British Airways Plc
                                                                                                                                                                      • Canada Deposit Insurance Corporation (CDIC)
                                                                                                                                                                      • Canadian Banker’s Association (CBA)
                                                                                                                                                                      • Canadian Imperial Bank of Commerce
                                                                                                                                                                      • Canadian Payments Association (CPA)
                                                                                                                                                                      • Canadian Tire Corporation, Limited
                                                                                                                                                                      • Capital One Financial Corporation
                                                                                                                                                                      • Cathay Pacific Airways Limited
                                                                                                                                                                      • Century 21 Real Estate Corporation
                                                                                                                                                                      • Chrysler LLC
                                                                                                                                                                      • CIBC World Markets Inc.
                                                                                                                                                                      • Citibank
                                                                                                                                                                      • Citigroup Inc.
                                                                                                                                                                      • Coast Capital Savings Credit Union
                                                                                                                                                                      • Esso Petroleum Co Ltd (retail)
                                                                                                                                                                      • Facebook, Inc.
                                                                                                                                                                      • Fitch:RPA
                                                                                                                                                                      • General Motors Corporation
                                                                                                                                                                      • Greenfield Online
                                                                                                                                                                      • Home Depot (USA)
                                                                                                                                                                      • HSBC USA Inc.
                                                                                                                                                                      • ICICI Bank Limited
                                                                                                                                                                      • ING Bank, fsb
                                                                                                                                                                      • Interac Association
                                                                                                                                                                      • J.D. Power and Associates
                                                                                                                                                                      • JPMorgan Chase & Co
                                                                                                                                                                      • LinkedIn
                                                                                                                                                                      • Loblaw Companies
                                                                                                                                                                      • MasterCard Incorporated
                                                                                                                                                                      • MBNA Corporation
                                                                                                                                                                      • Meridian Credit Union Limited
                                                                                                                                                                      • Mouvement des caisses Desjardins
                                                                                                                                                                      • National Broadcasting Company, Inc. (NBC)
                                                                                                                                                                      • PayPal Inc.
                                                                                                                                                                      • Royal Bank of Canada
                                                                                                                                                                      • Russell Investment Group (Frank Russell Company)
                                                                                                                                                                      • Sears Holdings Corporation
                                                                                                                                                                      • Sony Corporation of America
                                                                                                                                                                      • Starbucks Corporation
                                                                                                                                                                      • Steinbach Credit Union Limited
                                                                                                                                                                      • TD Ameritrade Holding Corporation
                                                                                                                                                                      • The New York Times Company
                                                                                                                                                                      • Toronto-Dominion Bank
                                                                                                                                                                      • Twitter, Inc.
                                                                                                                                                                      • Vancouver City Savings Credit Union
                                                                                                                                                                      • Visa U.S.A. Inc.

                                                                                                                                                                      Canadian Banks and Credit Unions - April 2010

                                                                                                                                                                      £3,277.28 (Excl.Tax)