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Generational Banking - Canada - January 2016

“Old is gold in Canada in terms of wealth and financial security as over-65s report having the highest amount of investments, lowest debt and feel most financially secure.”

- Sanjay Sharma, Senior Financial Services Analyst

This report looks at the following areas:

  • Over-65s have the highest ownership of investment products
  • Around a third have less than $5,000 in debt
  • Around two thirds of consumers prefer face-to-face purchases of complex products
  • Fees and customer service are the top choice factors

This report examines how different age groups explore the world of banking. There are differences in the financial situation of different generations which can be explained by life stage; but there are also differences in terms of how they choose their bank, product ownership, amount of investments and debt, channel preferences, attitudes relating to personal financial management/banking, degree of financial engagement and attitudes relating to general banking. The report seeks to uncover and explain these differences.

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Over-65s have the highest ownership of investment products
                • Figure 1: Ownership of savings and investment products at primary and secondary financial institutions, October 2015
              • Around a third of Canadians have less than $5,000 in debt
                • Figure 2: Amount of debt, October 2015
              • Around two thirds of consumers prefer face-to-face purchases of complex products
                • Figure 3: Attitudes related to banking channels, October 2015
              • Fees and customer service are the top choice factors
                • Figure 4: Choice factors for banking, October 2015
              • The opportunities
                • Catering to channel preferences and optimizing the multi-channel experience
                  • Figure 5: Banking channel attitudes by age (% who agree), October 2015
                • Aligning choice factors to generational preferences
                  • Figure 6: Choice factors related to age, October 2015
                • Dealing with women centric financial issues
                  • Encouraging multiple product ownership using the “Stickiness Index”
                    • Figure 7: Product stickiness index, October 2015
                  • What it means
                  • The Market – What You Need to Know

                    • Canada’s population is expected to age in the coming years
                      • The population is growing and ethnically diverse
                        • Alberta faces the brunt of the resource sector decline
                          • Proportion of highly indebted households continues to rise
                          • The Market – Market Factors

                            • Canada’s population is expected to age in the coming years
                              • Figure 8: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                              • Figure 9: Projected trends in the age structure of the Canada population, 2014-19
                            • The population is growing and ethnically diverse
                              • Growth of the LGBT community
                                • Alberta faces the brunt of the resource sector decline
                                  • Proportion of highly indebted households continues to rise
                                    • Canadian dollar slid to 12-year low of 70 cents US
                                    • Key Players – What You Need to Know

                                      • BMO starts Robo-Advisor and CIBC launches a digital advice channel
                                        • Internationally, banks are using technology to reach very young consumers
                                          • Apple Pay launches in Canada
                                            • Scotiabank and CIBC launch innovation labs
                                            • Key Players – What’s New?

                                                • Bank of Montreal Starts Robo-Advisor offering its ETFs
                                                  • RBC to offer voice recognition
                                                    • Apple Pay launches in Canada
                                                      • Digital financial advice is helping CIBC offer 800,000 affluent retail clients access to dedicated financial advisor
                                                        • Internationally, banks are using technology to reach very young consumers
                                                          • Scotiabank and CIBC launch innovation labs
                                                            • Customer service on social media platforms
                                                            • The Consumer – What You Need to Know

                                                              • Over-65s have the highest ownership of investment products while a quarter of Canadians can be termed as mass affluent
                                                                • Around a third have less than $5,000 in debt
                                                                  • Young females are the least financially secure while older consumers most active in managing their investments
                                                                    • Older consumers are more demanding of quality customer service
                                                                      • Young males more interested in mobile offers and using social media for financial research
                                                                      • The Consumer – Savings and Investments

                                                                        • Over-65s have the highest ownership of investment products
                                                                          • Figure 10: Ownership of savings and investment products at primary and secondary financial institutions, October 2015
                                                                        • Almost a quarter of Canadians fall into the mass affluent category
                                                                          • Figure 11: Amount of investments, October 2015
                                                                      • The Consumer – Repertoire Analysis

                                                                        • A quarter of consumers have six or more products with their primary FI…
                                                                          • Figure 12: Repertoire of product ownership with primary FI, October 2015
                                                                        • … and one product with another FI
                                                                          • Figure 13: Repertoire of product ownership with other FIs, October 2015
                                                                        • Lines of Credit are the “stickiest” product
                                                                          • Figure 14: Product stickiness index, October 2015
                                                                      • The Consumer – Household Debt

                                                                        • Around a third of Canadians have less than $5,000 in debt
                                                                          • Figure 15: Amount of debt, October 2015
                                                                        • Lines of credit are more likely to be held by older consumers
                                                                          • Figure 16: Ownership of debt products at primary and secondary financial institutions, October 2015
                                                                        • Albertans are more likely to be worried about debt; Quebecers less so
                                                                          • Figure 17: Attitudes related to debt and borrowing, October 2015
                                                                        • Younger Canadians more open to marketplace lenders
                                                                        • The Consumer – Banking Channel Preferences

                                                                          • Around two thirds of consumers prefer face-to-face purchases of complex products
                                                                            • Figure 18: Attitudes related to banking channels, October 2015
                                                                          • Young males more interested in mobile offers and using social media for financial research
                                                                            • Figure 19: Banking channel attitudes (% who agree), by age, October 2015
                                                                        • The Consumer – Degree of Financial Engagement

                                                                            • Older consumers most active in managing their investments
                                                                              • Figure 20: Attitudes related to interest in personal finances (% agreement), October 2015
                                                                            • Younger Canadians are more reliant on friends and family for their financial decision making
                                                                              • Figure 21: Attitudes related to knowledge of banking products, October 2015
                                                                          • The Consumer – Financial Security

                                                                            • Young females are the least financially secure
                                                                              • Figure 22: Attitudes related to financial security (% who agree), October 2015
                                                                            • Around two in five mortgage holders prioritize paying down mortgage over investments
                                                                              • Figure 23: Attitudes related to investing preferences, October 2015
                                                                          • The Consumer – Choice Factors

                                                                              • Fees and customer service are the top choice factors
                                                                                • Figure 24: Choice factors for banking, October 2015
                                                                              • Older consumers are more demanding of quality customer service
                                                                                • Introductory gifts, recommendations and mobile experience resonate with younger consumers
                                                                                  • Figure 25: Choice factors related to age, significant differences, October 2015
                                                                                • Credit Unions may be in danger of losing a core competitive advantage
                                                                                  • Figure 26: Attitudinal statement about credit unions, October 2015
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Consumer survey data
                                                                                    • Consumer qualitative research
                                                                                      • Abbreviations and terms

                                                                                      Companies Covered

                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                      Generational Banking - Canada - January 2016

                                                                                      £3,199.84 (Excl.Tax)