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Canadian Banks and Credit Unions - January 2014

“Canadians are very loyal to their banks, but quite consistently have accounts at other institutions, which indicates that there are opportunities for institutions with the primary relationship to increase cross-sell efforts. One way to do this is by offering enhanced mobile banking features, since Canadians have yet to adopt mobile banking on a large scale.”

– Susan Menke, Vice President Financial Services

This report looks at the following areas:

  • How do Canadians perceive the banks they do business with?
  • What is important to Canadians when they decide which banks to choose?
  • What products/services do Canadians have with their primary banks?
  • What products and services are they looking for at their primary bank?
  • What do banking customers think about the economy and their own financial priorities?
  • Do different types of customers have different types of banking relationships? If so, do financial institutions have opportunities to target these different segments in ways that will grow their businesses?

Banking technology is moving to the forefront in Canada. However, while Canada is ahead of the US in certain aspects of financial services technology, like chip-and-pin credit and debit cards and contactless payments, it lags in others, such as mobile cheque deposit and envelope-free ATMs.

The Canadian banking industry is also dominated by five large commercial banks and heavily regulated by the government, which prefers an oligopoly to maintain safety and soundness. Canadian consumers seem to prefer it that way, however, even if it means that they don’t see as much price and product competition.

The population of the country overall is growing slowly, with Asian immigration the primary and almost only driver of population growth. Therefore, Asians represent an opportune customer segment for the banking industry.

This report builds on several previous Mintel studies, including Canadian Banks and Credit Unions – October 2012, Canadian Banks and Credit Unions – June 2011, Canadian Credit Cards – April 2011, and Canadian Banks and Credit Unions – April 2010. It examines the trends and opportunities within the Canadian retail banking industry. It also provides an overview of how Canadian banking products are being received by the Canadian consumer and an in-depth look at consumer attitudes towards banks and credit unions. 

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Table of contents

  1. Scope and Themes

      • What you need to know
        • Consumer survey data
          • Direct marketing creative
            • Abbreviations and terms
              • Abbreviations
                • Terms
                • Executive Summary

                    • Overview of the Canadian Banking Industry
                      • Market drivers
                        • Leading companies
                          • Figure 1: Where primary chequing account is held, overall, November 2013
                        • Innovations and Innovators
                          • The consumer
                            • Figure 2: Banking activities conducted on desktop/laptop and smartphone, overall, November 2013
                            • Figure 3: Type(s) of products/accounts held with primary chequing account provider and other institution, November 2013
                          • Custom consumer groups – Asians
                            • Figure 4: Mobile device ownership, Asians and Non-Asians, November 2013
                            • Figure 5: Usage of electronic banking, by race, November 2013
                            • Figure 6: Interest in electronic banking, by race, November 2013
                          • What we think
                          • Insights and Opportunities

                            • Key points
                              • Consumers need more incentives to use mobile banking
                                • Asians want better service, but not necessarily personal service
                                  • What’s the point of branches?
                                  • Trend Application

                                      • Inspire Trend: Prepare for the Worst
                                        • Inspire Trend: Life Hacking
                                          • Mintel Futures: Access Anything, Anywhere
                                          • The Banking Industry in Canada

                                            • Key points
                                              • Total Canadian bank and credit union assets total C$4 trillion
                                                • Types of banks and bank regulation in Canada
                                                  • Credit unions and caisses populaires
                                                  • Market Drivers

                                                    • Key points
                                                      • Population growth remains dependent on (Asian) immigration
                                                        • Fears of a Canadian housing bubble may be easing
                                                            • Figure 7: Attitude statements about Canadian and personal economies, overall, November 2013
                                                            • Figure 8: Agreement with statements about Canadian and personal economies, by household income, November 2013
                                                        • Competitive Context

                                                          • Key points
                                                            • Big Five banks control 90% of the Canadian market
                                                                • Figure 9: Largest Canadian banks and caisses populaires by assets and market share as of Oct. 31, 2013
                                                              • Largest credit unions outside Quebec
                                                                • Figure 10: Top 5 credit unions outside Quebec by assets, Q4 2012 – Q2 2013
                                                            • Segment Performance

                                                              • Key points
                                                                • Canadian banks still among the world’s safest
                                                                  • Figure 11: Canadian Banks – credit ratings and global rankings, 2013
                                                                • Banks remain strongly profitable, although growth is slow
                                                                    • Figure 12: Financial performance of Canada’s largest banks, 2012 -13
                                                                • Leading Companies

                                                                  • Key points
                                                                    • Canadian banks
                                                                      • Canadian credit unions and caisses populaires
                                                                      • Innovations and Innovators

                                                                        • Key points
                                                                          • Sunova is first Canadian credit union to offer Interac Flash
                                                                            • Interac, RBC, McDonald’s launch mobile debit payments
                                                                              • Interac Flash rolled out to Coke vending machines
                                                                                • PayPal offers cloud-based mobile app to check in and pay at restaurants
                                                                                  • MasterCard launches MasterPass digital wallet
                                                                                    • PC Financial, TD launch Canada's first open mobile wallet
                                                                                      • ING Direct facilitates banking through Facebook
                                                                                        • TD launches money transfer service to Visa-branded cards
                                                                                          • RBC announces Secure Cloud, Canada’s first cloud-based mobile payments solution
                                                                                            • RBC brings P2P electronic money transfers to Facebook Messenger
                                                                                              • Mobile cheque deposit comes to Canada
                                                                                                • TD rolls out “green” ATMs
                                                                                                  • Capital One offers C$1 million prize in curling contest
                                                                                                    • Canadian banker appears on the “Daily Show”
                                                                                                    • Marketing Strategies

                                                                                                      • Key points
                                                                                                        • Examples of advertising
                                                                                                          • Figure 13: ING Direct direct mail ad, 2013
                                                                                                          • Figure 14: RBC direct mail ad, 2013
                                                                                                          • Figure 15: RBC direct mail ad, 2013
                                                                                                          • Figure 16: RBC direct mail ad, 2013
                                                                                                          • Figure 17: TD Canada Trust online ad, 2013
                                                                                                          • Figure 18: ING Direct direct mail ad, 2013
                                                                                                          • Figure 19: RBC direct mail ad, 2013
                                                                                                          • Figure 20: Sears Financial direct mail ad, 2013
                                                                                                          • Figure 21: CIBC direct mail ad, 2013
                                                                                                          • Figure 22: RBC direct mail ad, 2013
                                                                                                          • Figure 23: BMO online ad, 2013
                                                                                                          • Figure 24: Capital One direct mail ad, 2013
                                                                                                          • Figure 25: HSBC direct mail ad, 2013
                                                                                                      • Consumers and Banking Channels

                                                                                                        • Key point
                                                                                                          • Most Canadians own a mobile device
                                                                                                            • Figure 26: Mobile devices owned, by gender, November 2013
                                                                                                            • Figure 27: Mobile devices owned, by age, November 2013
                                                                                                            • Figure 28: Mobile devices owned, by gender and age, November 2013
                                                                                                            • Figure 29: Mobile devices owned, by household income, November 2013
                                                                                                            • Figure 30: Mobile devices owned, by provinces, November 2013
                                                                                                          • However, Canadians are not yet sold on mobile banking
                                                                                                              • Figure 31: Interest in/use of banking channels, mobile device owners by gender and age, November 2013
                                                                                                              • Figure 32: Interest in/use of banking channels, mobile device owners by household income, November 2013
                                                                                                              • Figure 33: Interest in/use of banking channels, mobile device owners by provinces, November 2013
                                                                                                            • Most people bank online, but not on a mobile device
                                                                                                                • Figure 34: Channels used to conduct various types of transactions, overall, November 2013
                                                                                                              • PC users primarily paying bills
                                                                                                                • Figure 35: Banking activities conducted on desktop/laptop, by gender and age, November 2013
                                                                                                                • Figure 36: Banking activities conducted on desktop/laptop, by provinces, November 2013
                                                                                                                • Figure 37: Banking activities conducted on desktop/laptop, by gender and household income, November 2013
                                                                                                              • Banking activities conducted in branch
                                                                                                                • Figure 38: Banking activities conducted in branch, by gender and age, November 2013
                                                                                                                • Figure 39: Banking activities conducted in branch, by provinces, November 2013
                                                                                                                • Figure 40: Banking activities conducted in branch, by gender and household income, November 2013
                                                                                                              • ABM’s used for deposits/withdrawals and little else
                                                                                                                • Figure 41: Banking activities conducted at ABM, by gender and age, November 2013
                                                                                                                • Figure 42: Banking activities conducted at ABM, by gender and household income, November 2013
                                                                                                                • Figure 43: Banking activities conducted at ABM, by provinces, November 2013
                                                                                                            • Mobile Device Owners and Banking Activity

                                                                                                              • Key points
                                                                                                                  • Figure 44: Banking activities conducted with smartphone, by gender and age, November 2013
                                                                                                                  • Figure 45: Banking activities conducted with smartphone, by household income, November 2013
                                                                                                                  • Figure 46: Banking activities conducted with smartphone, by provinces, November 2013
                                                                                                                  • Figure 47: Banking activities conducted with tablet, by gender and age, November 2013
                                                                                                                  • Figure 48: Banking activities conducted with tablet, by provinces, November 2013
                                                                                                              • Consumers and Banking Products

                                                                                                                • Key points
                                                                                                                  • Nearly all have chequing accounts
                                                                                                                    • Figure 49: Chequing account ownership, by household income, November 2013
                                                                                                                  • Savings accounts, credit cards are next most popular
                                                                                                                    • Figure 50: Type of nonchequing account/product owned, by gender, November 2013
                                                                                                                    • Figure 51: Type of nonchequing account/product owned, by age, November 2013
                                                                                                                    • Figure 52: Type of nonchequing account/product owned, by household income, November 2013
                                                                                                                    • Figure 53: Type of nonchequing account/product owned, by provinces, November 2013
                                                                                                                • Location of Primary and Secondary Accounts

                                                                                                                  • Key points
                                                                                                                    • Canadians favor the biggest banks
                                                                                                                      • Figure 54: Where primary chequing/debit card account is held, by gender and age, November 2013
                                                                                                                      • Figure 55: Where primary chequing/debit card account is held, by household income, November 2013
                                                                                                                      • Figure 56: Where primary chequing/debit card account is held, by provinces, November 2013
                                                                                                                    • Location of secondary chequing accounts
                                                                                                                      • Figure 57: Where other chequing/debit card account(s) are held, by gender and age, November 2013
                                                                                                                      • Figure 58: Where other chequing/debit card account(s) are held, by household income, November 2013
                                                                                                                      • Figure 59: Where other chequing/debit card account(s) are held, by provinces, November 2013
                                                                                                                    • Other types of accounts
                                                                                                                      • Figure 60: Where primary savings/investment/mortgage accounts are held, overall, November 2013
                                                                                                                      • Figure 61: Where primary investment account (other than retirement account) is held, by household income, November 2013
                                                                                                                      • Figure 62: Where primary retirement savings account is held, by household income, November 2013
                                                                                                                      • Figure 63: Where primary investment account (other than retirement account) is held, by provinces, November 2013
                                                                                                                      • Figure 64: Where primary retirement savings account is held, by province, November 2013
                                                                                                                      • Figure 65: Where primary residential home mortgage is held, by household income, November 2013
                                                                                                                      • Figure 66: Where primary residential home mortgage is held, by province regions, November 2013
                                                                                                                      • Figure 67: Where primary general purpose credit card is held, by household income, November 2013
                                                                                                                      • Figure 68: Where primary general purpose credit card is held, by provinces, November 2013
                                                                                                                    • Canadians keep secondary accounts at another bank
                                                                                                                      • Figure 69: Type(s) of products/accounts held with primary chequing/debit card provider, November 2013
                                                                                                                      • Figure 70: Type of products/accounts held at primary chequing/debit account provider, by provinces, November 2013
                                                                                                                      • Figure 71: Type of products/accounts held at other financial institutions, by provinces, November 2013
                                                                                                                    • Home equity loans are most popular at primary banks
                                                                                                                      • Figure 72: Type(s) of savings/loan products held with primary chequing/debit card provider, November 2013
                                                                                                                      • Figure 73: Type of savings/loan products/accounts held at primary chequing/debit account provider, by household income, November 2013
                                                                                                                      • Figure 74: Type of savings/loan products held at other institution, by household income, November 2013
                                                                                                                  • Loyalty and Switching

                                                                                                                    • Key points
                                                                                                                      • Canadians are extremely loyal to their banks
                                                                                                                        • Figure 75: Switched primary bank/credit union/caisse populaire in past five years, by gender and age, November 2013
                                                                                                                        • Figure 76: Switched primary bank/credit union/caisse populaire in past five years, by household income, November 2013
                                                                                                                        • Figure 77: Switched primary bank/credit union/caisse populaire in past five years, by provinces, November 2013
                                                                                                                      • Very few are even thinking of switching
                                                                                                                        • Figure 78: Are considering switching primary bank/credit union/caisse populaire, by gender and age, November 2013
                                                                                                                        • Figure 79: Are considering switching primary bank/credit union/caisse populaire, by household income, November 2013
                                                                                                                      • Lowering fees is the main reason to switch banks
                                                                                                                        • Figure 80: Reason would switch primary bank/credit union/caisse populaire, by gender, November 2013
                                                                                                                      • Security is the main reason people choose their bank
                                                                                                                        • Figure 81: Important features in choice of bank/credit union/caisse populaire, November 2013
                                                                                                                    • Attitudes toward Banks

                                                                                                                      • Key points
                                                                                                                        • Canadians not convinced big banks are better than small banks
                                                                                                                          • Figure 82: Attitudes toward banks and financial advice, overall, November 2013
                                                                                                                          • Figure 83: Any agreement with attitudes toward banks and financial advice, by gender and age, November 2013
                                                                                                                          • Figure 84: Any agreement with attitudes toward banks and advice, by household income, November 2013
                                                                                                                      • Consumer Financial Priorities

                                                                                                                        • Key points
                                                                                                                          • Canadians remain cautious about saving and spending
                                                                                                                              • Figure 85: Attitudes toward Canadian economic outlook and personal financial situation, overall, November 2013
                                                                                                                              • Figure 86: Attitudes toward Canadian economic outlook and personal financial situation, by age, November 2013
                                                                                                                              • Figure 87: Attitudes toward Canadian economic outlook and personal financial situation, by household income, November 2013
                                                                                                                              • Figure 88: Attitudes toward Canadian economic outlook and personal financial situation, by province, November 2013
                                                                                                                            • Improving credit scores is the highest priority
                                                                                                                                • Figure 89: Household financial priorities, November 2013
                                                                                                                                • Figure 90: Household financial priorities – any important, by age, November 2013
                                                                                                                                • Figure 91: Household financial priorities – any important, by household income, November 2013
                                                                                                                                • Figure 92: Household financial priorities – any important, by provinces, November 2013
                                                                                                                            • Custom Consumer Groups – Asians

                                                                                                                              • Key points
                                                                                                                                • Asians much more likely to own mobile devices
                                                                                                                                  • Figure 93: Mobile devices owned, by race, November 2013
                                                                                                                                • Yet, they don’t use mobile banking more often
                                                                                                                                    • Figure 94: Interest in/use of electronic banking, by race, November 2013
                                                                                                                                  • Asians favor the biggest banks
                                                                                                                                    • Figure 95: Where primary chequing/debit card account is held, by race, November 2013
                                                                                                                                  • Asians are not shy about switching banks…
                                                                                                                                    • Figure 96: Bank switching behavior, by race, November 2013
                                                                                                                                  • … and would do so again
                                                                                                                                    • Figure 97: Are considering switching primary bank/credit union/caisse populaire, by race, November 2013
                                                                                                                                  • Asians most likely to switch for lower fees
                                                                                                                                      • Figure 98: Reason would switch primary bank/credit union/caisse populaire, by race, November 2013
                                                                                                                                    • Asians trust banks more, but love them less
                                                                                                                                        • Figure 99: Attitudes toward banks and financial advice, by race, November 2013
                                                                                                                                      • They like investment firms even less than banks
                                                                                                                                          • Figure 100: Attitudes toward investments and investment companies/advisers, by race, November 2013
                                                                                                                                        • Asians own more banking products than others
                                                                                                                                          • Figure 101: Type of nonchequing account/product owned, by race, November 2013
                                                                                                                                      • Cluster Analysis

                                                                                                                                          • Cluster 1: Big Bank Advice Seekers
                                                                                                                                            • Demographics
                                                                                                                                              • Characteristics
                                                                                                                                                • Opportunity
                                                                                                                                                  • Cluster 2: Disinterested Switchers
                                                                                                                                                    • Demographics
                                                                                                                                                      • Characteristics
                                                                                                                                                        • Opportunity
                                                                                                                                                          • Cluster 3: Credit Union Conservatives
                                                                                                                                                            • Demographics
                                                                                                                                                              • Characteristics
                                                                                                                                                                • Opportunity
                                                                                                                                                                  • Cluster characteristic tables
                                                                                                                                                                    • Figure 102: Target clusters, November 2013
                                                                                                                                                                    • Figure 103: Mobile devices owned, by target clusters, November 2013
                                                                                                                                                                    • Figure 104: Chequing account ownership, by target clusters, November 2013
                                                                                                                                                                    • Figure 105: Type of nonchequing account/product owned, by target clusters, November 2013
                                                                                                                                                                    • Figure 106: Where primary chequing/debit card account is held, by target clusters, November 2013
                                                                                                                                                                    • Figure 107: Where other chequing/debit card account(s) are held, by target clusters, November 2013
                                                                                                                                                                    • Figure 108: Where primary savings account is held, by target clusters, November 2013
                                                                                                                                                                    • Figure 109: Where primary investment account (other than retirement account) is held, by target clusters, November 2013
                                                                                                                                                                    • Figure 110: Where primary retirement savings, by target clusters, November 2013
                                                                                                                                                                    • Figure 111: Where primary residential home mortgage is held, by target clusters, November 2013
                                                                                                                                                                    • Figure 112: Where primary general purpose credit card is held, by target clusters, November 2013
                                                                                                                                                                    • Figure 113: Type of products/accounts held at primary chequing/debit account provider, by target clusters, November 2013
                                                                                                                                                                    • Figure 114: Type of products/accounts held at other financial institutions, by target clusters, November 2013
                                                                                                                                                                    • Figure 115: Type of savings/loan products/accounts held at primary chequing/debit account provider, by target clusters, November 2013
                                                                                                                                                                    • Figure 116: Type of savings/loan products held at other institution, by target clusters, November 2013
                                                                                                                                                                    • Figure 117: Whether switched primary bank/credit union/caisse populaire, by target clusters, November 2013
                                                                                                                                                                    • Figure 118: Are considering switching primary bank/credit union/caisse populaire, by target clusters, November 2013
                                                                                                                                                                    • Figure 119: Reason would switch primary bank/credit union/caisse populaire, by target clusters, November 2013
                                                                                                                                                                    • Figure 120: Any Important features in choice of bank/credit union/caisse populaire, by target clusters, November 2013
                                                                                                                                                                    • Figure 121: Any agreement with attitudes toward banks and advice, by target clusters, November 2013
                                                                                                                                                                    • Figure 122: Interest in/use of electronic banking, by target clusters, November 2013
                                                                                                                                                                    • Figure 123: Channels used to conduct transactions – Smartphone, by target clusters, November 2013
                                                                                                                                                                    • Figure 124: Channels used to conduct transactions – Tablet, by target clusters, November 2013
                                                                                                                                                                    • Figure 125: Channels used to conduct transactions – Desktop/Laptop, by target clusters, November 2013
                                                                                                                                                                    • Figure 126: Channels used to conduct transactions – In branch, by target clusters, November 2013
                                                                                                                                                                    • Figure 127: Channels used to conduct transactions – ABM, by target clusters, November 2013
                                                                                                                                                                  • Cluster demographic tables
                                                                                                                                                                    • Figure 128: Target clusters, by demographic, November 2013
                                                                                                                                                                  • Cluster methodology
                                                                                                                                                                  • Appendix – Trade Associations

                                                                                                                                                                    Canadian Banks and Credit Unions - January 2014

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