Description

“Foot traffic in branches has fallen due to COVID-19 related safety concerns and this will lead to optimization in branch networks and a shift to a more advice centred branch format. But branches themselves will remain an important marketing space as they offer a sense of stability and reliability to current and future customers.”

– Sanjay Sharma, Senior Financial Services Analyst

This report covers the following issues:

  • Consumer attitudes and behaviour related to consumer banking in Canada.
  • The impact of COVID-19 on banking behaviour, switching intention of consumers, factors that influence switching, branch visits, impact of digital banking, importance of bank branch features and general attitudes related to banking.

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
  2. Executive Summary

    • Top takeaways
    • Market overview
    • Impact of COVID-19 on consumer banking
      • Figure 1: Short-, medium- and longer-term impact of COVID-19 on consumer banking attitudes, May 2021
    • Opportunities
    • A physical presence is important to most customers
    • Reorienting beaches to focus on value added services
    • Challenges
    • Post-COVID-19 likely to see lower foot traffic in branches
    • Strong call for the financial industry to do more to promote financial literacy
    • Branch visits are down due to COVID-19 but customers unlikely to forsake branches
  3. The Market – Key Takeaways

    • Canada plans record levels of immigration over the next three years
    • Canada’s 2021 budget plans record spending
    • Open banking in a Canadian context
    • The prospects for Fintech challengers
  4. The Market – Market Factors

    • Impact of COVID-19 on consumer banking attitudes
    • New Canadians are an important segment for banks as immigration fuels Canada’s population growth …
      • Figure 2: Percentage of Canadians who are visible minorities or not visible minorities, by age, 2016
    • … and Asia is the primary source
      • Figure 3: Distribution of immigrants living in Canada, by region of birth, 1996-2036
    • Canada plans record levels of immigration over the next three years
    • Canada’s 2021 Budget, current economic projections and its impact on consumer banking
    • Households sitting on a huge pile of cash
    • Open banking in a Canadian context
    • The prospects for Fintech challengers
    • How can Fintech help consumers?
  5. The Market – Apps & Tools

    • Digital tools and Canadians
    • Artificial intelligence
    • Scotiabank launches AI-Driven technology, C.MEE
    • Scotiabank also rolls out AI-powered cash-flow predictor Sofia
    • BMO launches AI financial advice tool and adds features to its financial planning platform
      • Figure 4: BMO WealthPath Facebook ads, March 2021
    • CIBC launches AI-powered virtual assistant
    • RBC debuts Aiden
    • Financial planning and advice
    • TD launches new student budgeting tool developed “for students, by students”
    • TD launches new financial planning and investing app
      • Figure 5: Find your beginning with TD GoalAssist, October 2020
    • Scotiabank launches Advice+, a digital, financial planning centre
      • Figure 6: Scotiabank – It’s You, Plus, September 2020
      • Figure 7: Scotiabank Advice+ Facebook ads, September 2020
    • Scotiabank reaches out to debt stressed Canadians
      • Figure 8: Scotiabank Instagram post, December 2020
    • CIBC launches new platform to help clients build their financial plans
      • Figure 9: CIBC GoalPlanner Facebook ad, January 2021
    • New digital banking features
    • Scotiabank simplifies digital banking with a new resource for seniors
    • TD unveils new digital cash flow tools
    • CIBC adds spending insights to mobile app
    • HSBC announces real-time payments tool
    • BMO launches new digital feature called Card Tracker
  6. Key Players – Competitive Strategies

    • Fintech company news
    • KOHO secures $70 million to scale its digital banking
    • Mogo acquires Moka and launches bitcoin cashback mortgage program
    • Walmart (US) files Fintech patent
    • Payments news
    • PayPal launches new service enabling users to buy, hold and sell cryptocurrency
    • Wealthsimple testing new feature
  7. Marketing Campaigns

    • RBC promotes MyAdvisor
      • Figure 10: RBC MyAdvisor RRSP direct mail ads, January 2021
      • Figure 11: RBC MyAdvisor ads, December 2020
    • TD supports frontline workers
      • Figure 12: TD Thanks You Angela, September 2020
    • New Canadian campaigns
    • Scotiabank offers financial management tips
      • Figure 13: Scotiabank newcomer ads, September 2020
    • RBC offers free medical checkups
      • Figure 14: RBC newcomer ads on Facebook, October 2020
  8. The Consumer – Key Takeaways

    • Almost all Canadians have a financial product
    • Half of Canadians have used cash less as a result of the pandemic
    • Poor customer service and fee increases are the top switching triggers
    • A physical presence is important to most customers
    • Most customers prefer established institutions with a long history
    • Branch visits are down due to COVID-19
  9. Ownership of Financial Products

    • Almost all Canadians have a financial product
      • Figure 15: Ownership of financial products, February 2021
      • Figure 16: Ownership of financial products, by number of products, February 2021
    • Ownership is age dependent
      • Figure 17: Ownership of financial products, 18-44s vs Over-45s, February 2021
      • Figure 18: EQ Bank savings account Facebook ad, October 2020
    • Higher income earners much more likely to hold Investments and mortgages
      • Figure 19: Ownership of financial products, overall vs HHI $100,000/year, February 2021
    • One in 10 Canadians use a credit monitoring service
      • Figure 20: Borrowell Credit monitoring email ad, March 2021
    • Two in five have a debt product
  10. Impact of COVID-19 on Banking

    • Half of Canadians have used cash less as a result of the pandemic
      • Figure 21: Impact of COVID-19 on banking and finances, February 2021
    • Safety concerns and lower merchant acceptance reduce cash usage
      • Figure 22: Impact of COVID-19 on banking and finances, by age, February 2021
    • More than a third are checking their finances more carefully
    • A fifth of those with over $100,000 in investments contacted their financial advisor
    • Online and mobile banking surge
      • Figure 23: Vancity Instagram post, May 2020
  11. Switching Influencers

    • Poor customer service and fee increases are the top switching triggers
      • Figure 24: Triggers prompting switching from main bank, February 2021
    • Older customers most likely to switch due to poor customer service
      • Figure 25: Triggers prompting switching from main bank, 18-44s vs over-45s, February 2021
    • Fee increase is the top trigger for younger customers
    • Switching bonus appeal to three in ten customers …
    • … while exclusive offers appeal to a quarter of 18-44s
      • Figure 26: PC Financial email ad, February 2021
    • A quarter of 18-44s would be influenced by a banking loyalty program …
    • … while multi-product discounts matter to a fifth of 18-44s
    • Other switching factors
      • Figure 27: EQ Bank refer a friend bonus email ad, July 2020
  12. Branch Visits

    • Two in three customers have visited a branch in the past 12 months
      • Figure 28: Branch visits, February 2021
      • Figure 29: Branch visits, by age, February 2021
    • Branch visits are down due to COVID-19
      • Figure 30: Citibank Video banking ad, October 2020
    • ATM use and non-digital services are the top reasons for branch visits
      • Figure 31: Reasons for branch visits, February 2020
    • Close to half of over-45s use branches for services that cannot be done online
      • Figure 32: Reasons for branch visits (select), 18-44s vs over-45s, February 2020
    • Tellers still matter
    • Mass affluent investors more likely to visit branch financial advisor
    • Reluctance to use digital remains a reason for branch visits
    • Online and challenger banks aim to carve out a niche
      • Figure 33: Neo Financial Instagram post, March 2021
  13. Encouraging More Branch Visits

    • Sanitization and surrounding environment more likely to encourage visits
      • Figure 34: Features that would encourage more branch visits, February 2021
    • Cleanliness and a pleasant environment are key
      • Figure 35: Scotiabank new branch Facebook ad, September 2020
    • Other features that would encourage visits
    • Older consumers less likely to change their habits
      • Figure 36: Features that would encourage more branch visits, by age, February 2020
    • Non-visitors will be harder to induce
      • Figure 37: Features that would encourage more branch visits, those who have visited vs not visited not a branch, February 2020
    • Branch banking amidst COVID-19 related safety concerns
      • Figure 38: Scotiabank bonus at branch advertisement, October 2020
  14. Attitudes towards Branches

    • A physical presence is important to most customers
      • Figure 39: Attitudes towards bank branches, February 2021
    • Post-COVID-19 likely to see lower foot traffic in branches
    • Some are questioning the value of branches
      • Figure 40: Branches vs automation, by age, February 2021
    • Reorienting beaches to focus on value added services
  15. General Attitudes towards Banking

    • Most customers prefer established institutions with a long history
      • Figure 41: Banking related attitudes, February 2021
    • Strong call for the financial industry to do more to promote financial literacy
    • Over-55s more likely to feel that switching is not worth the hassle
    • Half of 18-44s interested in shared financial products
      • Figure 42: EQ Bank Joint account email ad, July 2020
    • COVID-19 is accelerating the digital transformation
      • Figure 43: Tech related banking attitudes, February 2021
  16. Appendix – Data Sources and Abbreviations

    • Data sources
    • Consumer survey data
    • Consumer qualitative research
    • Mintel Trend Drivers
    • Abbreviations and terms

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