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Consumer Lending - Canada - March 2015

Published By :

Mintel

Published Date : Mar 2015

Category :

Banking

No. of Pages : 88 Pages


Leveraging the goodwill generated through customer interactions while selling complex products such as mortgages, can be a catalyst for the sale of other lending products.
Table of Content

Introduction

Methodology
Abbreviations

Executive Summary

Market factors
Overall negative impact of lower oil prices on the Canadian economy
Impact of interest rates, inflation and exchange rates
Outlook on the real estate and housing market
British Columbians have the highest net worth
Household debt in Canada
Population count and growth in Canada
Companies, brands and innovation
The consumer
Most Canadians have at least one debt product
Figure 1: Ownership of lending products, January 2015
TD^ and RBC are the market leaders for consumer lending products
Figure 2: Choice of financial institution for lending products, January 2015
Having a prior banking relationship emerges as the most significant overall choice factor
Figure 3: Reasons for selecting the financial institution for lending products, January 2015
Satisfaction of factors by FI: CIBC and Tangerine lead in satisfaction scores
Figure 4: Satisfaction with factors when applying for lending products, January 2015
Young females are the most debt burdened
Figure 5: Attitudes towards borrowing, January 2015
What we think

Issues in the Market

Establishing positive banking relationships with debt burdened groups
The facts
The implications
Mortgage owners and their intention to switch financial institutions
The facts
The implications
Marketing additional lending products to existing customers
The facts
The implications
Can specialized credit card companies successfully expand into the larger consumer lending market in the coming years?
The facts
The implications

Trend Application

Trend: Help Me Help Myself
Trend: Life Hacking
Trend: FSTR HYPER

Market Drivers

Key points
Economic overview
Overall negative impact of lower oil prices on the Canadian economy
Figure 6: Canada’s GDP, by quarter, Q1 2008-Q1 2014
Figure 7: Household disposable incomes and savings in Canada, by quarter, Q1 2008-Q1 2014
Figure 8: Canada’s unemployment rate, by gender, 2008-14
Impact of Interest rates, inflation and exchange rates
Figure 9: Inflation rates in Canada, 2004-14
Outlook on the real estate and housing market
British Columbians have the highest net worth
Figure 10: Canada median net worth, by province, 2012
Household debt in Canada
Demographic overview
Population count and growth in Canada
Figure 11: Share of population of Canada, by territory/province, 2014
Canada’s population is expected to age in the coming years
Figure 12: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Figure 13: Projected trends in the age structure of the Canada population, 2014-19

Who’s Innovating?

Key themes
Quantum credit cards “impossible” to hack
Marketplace lending or person-to-person lending
Float Money (US)

Companies and Products

TD Financial Group
Overview and company information
Recent activity
RBC
Overview and company information
Recent activity
Scotiabank
Overview and company information
Recent activity
American Express
Overview and company information
Recent activity
Meridian Credit Union
Company overview
Recent activity
Capital One
Overview and company information
Recent activity

Brand Communication and Promotion

Key points
Citibank is the most active direct mailer
Figure 14: Direct acquisition mail volume related to lending, January 2014-January 2015
RBC unveils 'movie trailers' aimed at new home buyers
RRSP Loan from Tangerine
RBC’s Year of the Goat Visa Gift Card
Personal Loan from Citibank
TD’s Unsecured Line of Credit Offer

The Consumer – Ownership of Lending Products

Key points
Most Canadians have at least one debt product
Figure 15: Ownership of lending products, January 2015
Around a quarter of seniors have a mortgage product
Figure 16: Ownership of lending products, by age, January 2015
45-54s have the highest incidence of owning four or more products
Figure 17: Repertoire analysis of ownership of lending products, January 2015

The Consumer – Choice of FI for Lending Products

Key points
TD^ and RBC are the market leaders for consumer lending products
Figure 18: Choice of financial institution for lending products, January 2015

The Consumer – Choice Factors for Selecting FI

Key points
Having a prior banking relationship emerges as the most significant overall choice factor
Figure 19: Reasons for selecting the financial institution for lending products, January 2015
Reward and loyalty programs are key in credit card decisions
Figure 20: Reasons for selecting the financial institution for credit cards, January 2015
Consumers choosing mortgage provider based on previous experience
Figure 21: Reasons for selecting the financial institution for mortgages, January 2015
Loan choice factor varies by product type
Figure 22: Reasons for selecting the financial institution for loans, January 2015
Prior banking relationship is the leading choice factor when selecting line of credit
Figure 23: Reasons for selecting the financial institution for line of credit, January 2015

The Consumer – Satisfaction with Factors

Key points
Older debt product holders are significantly more satisfied with the application process
Figure 24: Satisfaction with factors when applying for lending products, January 2015
Satisfaction of factors by FI: CIBC and Tangerine lead in satisfaction scores
Figure 25: Satisfaction rank by factor, January 2015

The Consumer – Switching Lenders

Key points
Mortgage holders most likely to want to switch lenders
Figure 26: Switching intention by product, January 2015
Interest rates are the main reason for switching lenders
Figure 27: Reasons for switching lenders, January 2015

The Consumer – Attitudes towards Borrowing

Key points
Summary of attitudes towards debt and borrowing
Figure 28: Attitudes towards borrowing, January 2015
Young males more likely to use a debt counselling agency
Figure 29: Attitudes regarding debt burden and its impact on lifestyle, January 2015
Almost half of 25-44s are interested in consolidated borrowing options
Figure 30: Attitudes around comfort with debt levels, January 2015
Young males and non-Caucasian Canadians more positive on balance transfer offers
Figure 31: Attitudes regarding awareness of debt usage, January 2015
Young females are the most debt burdened
Figure 32: Difficulty with debt (% agree), by gender 18-34, January 2015

The Consumer – Chinese Canadians and Consumer Lending

Key points
Chinese Canadians under-index on ownership of lines of credit and loans
Figure 33: Ownership of lending products, Chinese Canadians vs overall population, January 2015
TD is the most popular choice among Chinese Canadians for lending products
Figure 34: Choice of financial institution for lending products, Chinese Canadians vs overall population, January 2015
Half of Chinese Canadians interested in a consolidated borrowing option
Figure 35: Select attitudes towards borrowing, Chinese Canadians vs overall population, January 2015

The Consumer – Target Groups

Key points
Three target groups
Figure 36: Target Groups, January 2015
Debt Minimalists (34%)
Savvy Borrowers (36%)
Debt Burdened (30%)

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