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Banking Channel Usage and Preferences - Canada - July 2016

Published By :

Mintel

Published Date : Jul 2016

Category :

Banking

No. of Pages : N/A

The merging of digital and human channels in the form of chatbots and robo-advisors is the next key development in the world of banking channels.

Table of Content

Overview

Regional classifications
Income

Executive Summary

The issues
Age is a key determinant of payment methods used
Figure 1: Payment methods used in the last three months, May 2016
Around one in four 18-34s has used a payment app with Starbucks being the most popular
Figure 2: Use of mobile payment apps, May 2016
Channel preference is transaction dependent
Figure 3: Transactions and channels used, May 2016
The opportunities
Branches are still influential and relevant
Figure 4: Attitudes about bank branches, May 2016
Overcoming barriers to mobile banking adoption
Figure 5: Reasons for not using mobile banking, May 2016
Increased mobile banking adoption is a matter of time but monetization requires strategizing
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 becoming more ethnically diverse
Growth of the LGBT community
Canada’s economy disappoints; risk of contraction in the second quarter
Mobile phone ownership in Canada

Market Factors

Canada’s population is expected to age in the coming years
Figure 6: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Figure 7: Projected trends in the age structure of the Canada population, 2014-19
Women outnumber men in Canada
The population is growing and becoming ethnically diverse
Growth of the LGBT community
Business sentiment improves but remains subdued overall
Canada’s economy disappoints; risk of contraction in the second quarter
Mobile phone ownership in Canada

Key Players – What You Need to Know

Canada's Big 5 banks sign up for Apple Pay; Samsung to arrive soon
RBC first to offer free Interac e-transfer payments for all personal chequing accounts
MasterCard Canada planning to roll out 'selfie pay' in Canada this summer
PayPal launches peer-to-peer payments in Canada
Meridian introduces Sweep
Mobile bank marketing creatives

Innovations

MasterCard Canada planning to roll out 'selfie pay' in Canada
MintChip launch brings Canadian-made digital cash to consumers
Zenbanx to offer cheap, mobile currency exchange service
RBC first to offer free Interac e-transfer payments
PayPal launches peer-to-peer payments in Canada
Tangerine Bank rebuilds mobile app for biometric authentication
Digital banking upheaval the focus of Ivey’s new lab
Meridian introduces Sweep – A feature that ‘sweeps’ money daily
Tangerine and Ryerson University partner to open FinTech incubator
Suretap and Points partner up to bring loyalty program to mobile wallet
Bank of America and other banks expanding cardless ATMs across the US
Grow announces partnership with First West Credit Union
New mobile payment entrants
Canada's ‘big 5’ banks sign up for Apple Pay
Samsung Pay coming to Canada in late 2016
New Walmart Pay app adds to mobile payments fray
LG moves into the international mobile payments market

Marketing Campaigns

Interac’s new advertisement – ‘The Surprise’
Figure 8: Interac’s new be in the black ad, “the surprise”, May 2016
Scotiabank’s social contests
Mobile bank marketing creatives
Figure 9: Overview of CIBC mobile banking app creatives, May 2016
Figure 10: Overview of BMO mobile banking app creatives, May 2016
Figure 11: Overview of Desjardins mobile banking app creatives, May 2016
RBC promotes its free Interac transfers for personal checking accounts
Figure 12: RBC print advertising for free e-transfers, May 2016

The Consumer – What You Need to Know

Age is a key determinant of payment methods used
Around one in four 18-34s has used a payment app
Channel preference is transaction dependent
Perception of no value-add, security concerns and lack of comfort are key reasons for non-adoption of mobile banking
Branches are still influential and relevant

Payment Methods

Age is a key determinant of payment methods used
Figure 13: Payment methods used in the last three months, May 2016
Women have a higher usage of debit cards
Figure 14: significant differences in payment methods used, by gender, May 2016
French speakers more likely to use debit and secured credit cards…
Figure 15: significant differences in payment methods used, by language spoken at home, May 2016
…while Chinese Canadians strongly favour credit over debit cards
Figure 16: significant differences in payment methods used, Chinese Canadians vs overall population, May 2016
LGBTs have distinct payment preferences
Figure 17: significant differences, payment methods used; Overall population vs LGBTs, May 2016

Usage of Mobile Payment Apps

Around one in four 18-34s have used a payment app
Figure 18: Use of mobile payment apps, May 2016
Starbucks is the most popular app
Figure 19: Usage of payment apps, by age, May 2016
Young males and Asian Canadians are most enthused about mobile payment apps and offers
Figure 20: Attitudes about mobile shopping and payments, May 2016

Channels and Transactions

Channel preference is transaction dependent
Figure 21: Transactions and channels used, May 2016
Online and ATMs have the highest overall usage
Figure 22: Channel usage in the past three months (% who have used), May 2016
Buying investments/financial planning, loan applications, customer service and account opening more likely to be done in a branch…
Figure 23: Branch activities performed in the past three months, May 2016
…while online is the most used channel overall
Figure 24: Online banking activities performed in the past three months, May 2016
Call centres are the top choice for customer service enquiries
Correspondence analysis for channels and transactions
Methodology
Withdrawing money, bill payments and checking account balances are the most common transactions: Digital, human and ATM channels have distinct transactional functions
Figure 25: Correspondence analysis – Channel usage for each transaction, May 2016

Mobile Banking

Perception of no value-add, security concerns and lack of comfort are the top three reasons for non-adoption
Figure 26: Reasons for not using mobile banking, May 2016
Older consumers more likely to cite lack of benefits, lack of comfort
Security and data collection issues are a common concern
Customer satisfaction with mobile banking apps
Figure 27: Screenshots of the Desjardins mobile banking app, May 2016
Increased adoption is a matter of time but monetization requires strategizing
Most consumers are open to or neutral about fingerprint recognition
Figure 28: Attitudes about mobile banking, May 2016
Checking account balance and bill payments are the most common mobile banking activities
Figure 29: Mobile banking transactions, May 2016
Figure 30: CIBC mobile cheque deposit advertisement, July 2015

Channel Preferences and Attitudes

Branches are still influential and relevant
Figure 31: Attitudes about bank branches, May 2016
Two in three consumers have visited a branch in the past three months
Figure 32: Branch activities performed in the past three months, May 2016
Younger consumers more likely to be influenced by branch staff
Around half of consumers agree that online banks cannot meet all their banking needs
Figure 33: Attitudes about online banks, May 2016
Younger consumers more impatient with call centre wait times
Figure 34: Agreement with statements on banking, May 2016
Consumers generally neutral about online financial advice and credit union technology

Appendix – Data Sources and Abbreviations

Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

List of Table

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