Description

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Financial Building and Product Switching in Banking market, and the behaviours, preferences and habits of the consumer.

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What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

Financial institutions (FIs) are always strategizing on ways to
increase customer share of wallet and build loyalty in the staid
world of Canadian retail banking. The Canadian consumer
banking industry is dominated by the five major banks, but there is
strong competition, not only among them, but from smaller virtual
banks, regional banks and credit unions.

However, in this highly competitive market, banks cannot stand still. Digital banking and
the advent of Fintech require Canadian banks to stay focussed on
providing an excellent customer experience. Banks need to meet
the basic needs of their customers, but beyond that they need
to know their customers, reward their loyalty and enable them to
interact in a seamless way.

Expert analysis from a specialist in the field

Written by Sanjay Sharma, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Boosting multiple product ownership is a double powered engine for financial institutions as it increases profitability through wallet share and also builds loyalty by discouraging attrition.
Sanjay Sharma
Senior Financial Services Analyst

Table of Contents

  1. Overview

      • ‘Big bank’ definitions
        • Regional classifications
          • Income
          • Executive Summary

              • The issues
                • TD and RBC are the leading choices
                  • Figure 1: Choice of main FI, December 2018
                • Tangerine is the top alternative choice
                  • Figure 2: Switching choice of main FI, December 2018
                • Lower chequing fees and higher savings interest are the top switching influencers
                  • Figure 3: Interest in incentives to switch (any rank), December 2018
                • Rewards programs will encourage more cross-sell
                  • Figure 4: Interest in incentives to buy more products, December 2018
                • The opportunities
                  • Having multiple products at one bank discourages switching
                    • Figure 5: Attitudinal statements relating to loyalty in banking, December 2018
                  • Bundling discounts have wide appeal
                    • Figure 6: Attitudinal statements relating to loyalty (select), 18-44s vs over-45s, December 2018
                  • Branches continue to play an important relationship building role
                    • Figure 7: Attitudes about customer relationships in banking, December 2018
                  • Digital banks mainly used as a supplemental bank
                    • Figure 8: Attitudes about digital banks, Simplii Financial and Tangerine, December 2018
                  • What it means
                  • Key Players – What You Need to Know

                    • Impact of new consumer protection legislation on banks
                      • Meridian Credit Union clears key hurdle to launching new national bank
                        • Coast Capital Savings approved to become BC’s first federal credit union
                          • Meridian Credit Union launches “Price Drop”
                            • Borrowell launches first free AI powered credit coaching tool
                              • Bankers association says Canada needs a digital ID system
                              • Regulatory Developments

                                • Impact of new consumer protection legislation on banks
                                  • Naming and shaming
                                    • Whistleblower protections
                                      • Sales tactics
                                        • Regulatory relief
                                          • Meridian Credit Union clears key hurdle to launching new national bank
                                            • Coast Capital Savings approved to become BC’s first federal credit union
                                            • Industry Developments & Innovations

                                              • Meridian Credit Union launches “Price Drop”
                                                • Borrowell launches first free AI powered credit coaching tool
                                                  • MasterCard to drop its name from logo
                                                    • Bankers association says Canada needs a digital ID system
                                                      • RBC launches new accelerator programme
                                                      • Marketing Initiatives

                                                        • Simplii Financial launches first-ever campaign
                                                          • Figure 9: Choosing Simplii Financial means your banking is one less thing to juggle, September 2018
                                                        • HSBC gets opera singers to pitch its services
                                                          • Figure 10: HSBC Bank Canada | Don’t let your banking become a tragedy, November 2018
                                                        • CIBC adds a personal touch to its multicultural marketing
                                                          • PayPal debuts Xoom in Canada
                                                              • Figure 11: Paypal money go Xoom, December 2018
                                                            • Meridian Credit Union making more inroads in the GTA
                                                              • BMO launching new financial-crimes unit
                                                              • Bundling and Switching Initiatives

                                                                • Scotia’s Momentum Rewards Bundle
                                                                  • Figure 12: Scotiabank’s Momentum banking bundle, September 2017
                                                                • RBC VIP Banking bundle and new account offer
                                                                  • Other banking bundles
                                                                    • Switching offers for new customers
                                                                    • The Consumer – What You Need to Know

                                                                      • TD and RBC are the leading choices
                                                                        • Tangerine is the top alternative choice
                                                                          • Lower chequing fees and higher savings interest are the top switching influencers
                                                                            • No-fee banking is the main selling feature of digital banks
                                                                              • Rewards programs will encourage more cross-sell
                                                                                • Around two in three consumers would recommend their main FI
                                                                                  • Having multiple products at one bank discourages switching
                                                                                  • Choice of Main FI

                                                                                    • TD and RBC are the leading choices
                                                                                      • Figure 13: Choice of main FI, December 2018
                                                                                    • Significant regional differences in market penetration of banks
                                                                                      • Figure 14: Choice of main FI choices (select), Atlantic Canada vs Quebec, August 2016
                                                                                    • One in four Asian Canadians considers TD as their main FI
                                                                                      • Figure 15: Choice of main FI, Asian Canadians vs overall population, December 2018
                                                                                  • Switching Choice of Main FI

                                                                                    • Tangerine is the top alternative choice
                                                                                      • Figure 16: Switching choice of main FI, December 2018
                                                                                    • TD and Scotia are top switching choices of younger consumers
                                                                                      • Figure 17: Switching choice of main FI (select), 18-44s vs over-45s, December 2018
                                                                                  • Incentives to Switch

                                                                                    • Lower chequing fees and higher savings interest are the top switching influencers
                                                                                      • Figure 18: Interest in incentives to switch (any rank), December 2018
                                                                                    • Men value full range of products and digital capabilities more
                                                                                      • Figure 19: Select interest in incentives to switch (any rank), by gender, December 2018
                                                                                    • Higher interest rates matter more to older consumers
                                                                                      • Figure 20: Select interest in incentives to switch (any rank), 18-44s vs over-45s, December 2018
                                                                                    • Lower fees matter less to over-55s
                                                                                      • Figure 21: Interest in incentives to switch (rank #1), by age, December 2018
                                                                                  • Digital Banks

                                                                                    • No-fee banking is the main selling feature of digital banks
                                                                                      • Figure 22: Attitudes about digital banks, December 2018
                                                                                    • 35-54s more enthused about digital banks
                                                                                      • Figure 23: Attitudes about digital banks, by age, December 2018
                                                                                    • Men more likely to be attracted by high interest savings accounts
                                                                                      • Figure 24: Attitudes about digital banks, by gender, December 2018
                                                                                    • Digital banks mainly used as a supplemental bank
                                                                                      • Figure 25: Attitudes about digital banks, Simplii Financial and Tangerine customers, December 2018
                                                                                  • Incentives to Increase Share of Wallet

                                                                                    • Rewards programs will encourage more cross-sell
                                                                                      • Figure 26: Interest in incentives to buy more products, December 2018
                                                                                    • Over-55s generally less interested in incentives
                                                                                      • Figure 27: Interest in incentives to buy more products (select), by age, December 2018
                                                                                    • Higher income earners more interested in most incentives
                                                                                      • Figure 28: Interest in incentives to buy more products, HHI under $50K vs over $50K, December 2018
                                                                                    • Financially stressed parents with young children more interested in incentives
                                                                                      • Figure 29: Interest in incentives to buy more products (select), by parental status, December 2018
                                                                                    • TURF Analysis
                                                                                      • Methodology
                                                                                        • Rewards and a price matching program would appeal to around 60%
                                                                                          • Figure 30: TURF Analysis – Cross-sell incentives, December 2018
                                                                                      • Customer Relationships

                                                                                        • Around two in three consumers would recommend their main FI
                                                                                          • Figure 31: Attitudes about customer relationships in banking, December 2018
                                                                                          • Figure 32: Agreement with statement “I would recommend my main bank/credit union to a friend/family member”, by select FIs, December 2018
                                                                                        • Around seven in ten have a good relationship with their local branch
                                                                                          • Figure 33: Agreement with statement “I have a good relationship with my local bank/credit union”, 18-44s vs over-45s, December 2018
                                                                                        • Desjardins and RBC customers appear to have a stronger relationship
                                                                                          • Figure 34: Agreement with statement “I have a good relationship with my local bank/credit union”, Desjardins customers vs overall, December 2018
                                                                                        • Branches continue to play an important relationship building role
                                                                                        • Loyalty

                                                                                          • Having multiple products at one bank discourages switching
                                                                                            • Figure 35: Attitudinal statements relating to loyalty in banking, December 2018
                                                                                          • Bundling discounts have wide appeal
                                                                                            • Figure 36: Attitudinal statements relating to loyalty (select), 18-44s vs over-45s, December 2018
                                                                                          • Young men more likely to contemplate switching
                                                                                            • Figure 37: Attitudinal statement relating to switching, by age and gender, December 2018
                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                          • Data sources
                                                                                            • Consumer survey data
                                                                                              • Abbreviations and terms

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