Description

“The major banks in Canada continue to enjoy an oligopoly, while digital banks attract those looking for a no-fee model and better rates on deposits. With high overall satisfaction levels, it is unlikely that the competitive positioning of the banks will change, but digital challengers have a role to play as niche players.”
Sanjay Sharma, Senior Financial Services Analyst

This Report looks at the following areas:

  • Consumer behaviours and attitudes related to customer retention and loyalty in Canadian consumer banking. It explores the competitive landscape of the major banks, switching intention of consumers, factors influencing switching, satisfaction with main bank/credit union and attitudes related to customer retention and banking preferences.
  • In the context of this Report, teens refers to 13-17 year olds.

Table of Contents

  1. Overview

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

          • Top takeaways
            • Market overview
              • Outlook on customer retention and loyalty in banking
                • Figure 1: Customer retention and loyalty in banking outlook, 2022-27
              • Opportunities
                • Branch relationships foster loyalty
                  • New customer deal matters most to Asian Canadians
                    • Tangerine and Simplii have the highest net promoter scores
                      • Challenges
                        • Openness to Open Banking is low
                          • Younger consumers more likely to look for assistance in using mobile apps
                          • The Market – Market Factors

                            • Immigrants a major driver of growth
                              • Figure 2: Distribution of foreign-born population, by region of birth, 1996-2036 (projected)
                            • Frothy housing markets remain a concern
                              • Canada has an ageing population, boosting home equity products…
                                • Figure 3: Proportion of 0-14s and over-65s in the Canadian population, 1988-2068*
                              • …while teens are a promising future customer base
                                • Figure 4: RBC Mydoh Facebook ad, February 2022
                                • Figure 5: Financial habits of 13-17 year olds, 2022
                              • Inflation will make consumers more fee-sensitive
                                • Figure 6: Changes in consumer price index, January 2019-December 2021
                            • Key Players – Competitive Strategies

                              • Simplii introduces digital identity verification for newcomers to Canada
                                • RBC brings all of its personal banking under a single platform
                                  • Figure 7: Introducing RBC Vantage, July 2021
                                • Laurentian Bank unveils turnaround strategy
                                  • Canada Post, TD Bank team up to offer financial services at post offices
                                  • Key Players – Marketing Campaigns

                                    • Scotiabank tries to put financial worries to rest to get clients sleeping better
                                        • Figure 8: Scotiabank | Sleep Advisor, December 2021
                                      • Coast Capital finds new value in financial partnerships
                                          • Figure 9: Coast Capital | You’re not just our customer, we’re your partner, February 2022
                                        • CIBC turns its new logo into a portal for financial confidence
                                            • Figure 10: CIBC | Ambitions made real, September 2021
                                          • Vancity’s rebranding
                                            • Figure 11: Vancity| Be a financial force for change, March 2021
                                        • Consumer Fast Facts: Customer Retention & Loyalty in Banking

                                          • Choice of Bank

                                            • Big banks dominant choice for Canadians
                                              • Figure 12: Choice of bank, 2022
                                              • Figure 13: ATB mobile display ad, March 2022
                                            • Desjardins is the overwhelming favourite of Quebecers
                                              • Figure 14: Desjardins Facebook ad, January 2022
                                              • Figure 15: Choice of main bank, Quebec vs overall, 2022
                                            • Customer loyalty
                                              • Desjardins has the highest proportion of customers who consider it their main bank
                                                • Figure 16: Proportion of customers who consider the bank to be their main bank/credit union, 2022
                                              • Tangerine and Simplii have the highest net promoter scores
                                                • Figure 17: “I would recommend my main bank/credit union financial institution to a friend or family member” (% agree), by choice of main bank, 2022
                                                • Figure 18: Tangerine Facebook ad, October 2021
                                              • Online and challenger banks aim to carve out a niche
                                              • Switching Factors

                                                • Only a small number plan to switch…
                                                  • Figure 19: Switching intention, 2022
                                                • …fuelled by dissatisfied customers
                                                  • Figure 20: Switching intention of customers, by level of satisfaction, 2022
                                                • Low/no fees on chequing accounts is the top switching factor
                                                  • Figure 21: Neo Financial Facebook ad, January 2022
                                                  • Figure 22: Factors influencing switching, 2022
                                                • Younger customers more likely to switch for investment products and ATMs
                                                  • Figure 23: Factors influencing switching (select), 18-44s vs over-45s, 2022
                                                • Customer service is more of a top-ranked trigger for over-45s
                                                  • Figure 24: Vancity Instagram post, October 2021
                                                • New customer deal matters most to Asian Canadians
                                                  • Figure 25: RBC Facebook ad, March 2022
                                                  • Figure 26: Factors influencing switching (select), Asian Canadians vs overall, 2022
                                                • Other switching factors
                                                  • Figure 27: Meridian Credit Union Facebook ad, January 2022
                                              • Satisfaction with Main Bank

                                                • Overall satisfaction is high
                                                  • Figure 28: Overall satisfaction with main bank, 2022
                                                • Friendliness of branch staff and security of online banking rank highest in satisfaction
                                                  • Figure 29: Satisfaction with main bank attributes, February 2022
                                                • Over-55s most satisfied with branches
                                                  • Figure 30: Satisfaction with banking select attributes (% any satisfied), by age, 2022
                                                • Some differences by ethnicity emerge
                                                  • Figure 31: Satisfaction with select banking attributes (% any satisfied), Chinese Canadians and South Asians* vs overall, 2022
                                                • Digital banks lead
                                                  • Figure 32: Overall satisfaction with main bank, by choice of main bank, 2022
                                              • Branch Banking

                                                • Most customers have a good relationship with their local branch
                                                  • Figure 33: Attitudes towards branches, 2022
                                                • Over-55s have a stronger connection with bank branches
                                                  • Figure 34: Attitudes towards branches (% agree), by age, 2022
                                                • Branch relationships foster loyalty
                                                  • No significant change in branch visits envisaged
                                                    • Figure 35: Branch attitudes (% agree), 2022
                                                • Digital Trends

                                                  • Most consumers are attracted to digital banks due to no-fee banking
                                                    • Figure 36: EQ Bank Mobile display ad, March 2022
                                                    • Figure 37: Attitudes related to digital banks, 2022
                                                  • Even younger consumers seek a face-to-face connection
                                                    • Figure 38: Attitudes related to digital banks, by age, 2022
                                                    • Figure 39: Motusbank Facebook ad, November 2021
                                                  • Younger consumers more likely to look for assistance in using mobile apps
                                                    • Figure 40: Digital attitudes (% agree), 2022
                                                  • Openness to Open Banking is low
                                                      • Figure 41: General banking attitudes (% agree), 2022
                                                    • COVID-19 has not made a significant impact on trust levels
                                                    • Appendix – Data Sources and Abbreviations

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

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