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Credit Unions and Retail Banking - Canada - February 2017

Published By :

Mintel

Published Date : Feb 2017

Category :

Banking

No. of Pages : N/A

Family relationships are an influential factor behind choice of first bank so incentivizing parents to open accounts for their children is a sound strategy.

Table of Content

OVERVIEW

Regional classifications
Income

EXECUTIVE SUMMARY
The issues
TD and RBC are the top two primary bank choices
Figure 1: Choice of primary financial institution, November 2016
Family and branch locations are dominant factors in first bank choice
Figure 2: Top reasons for choice of first bank (%), November 2016
Low fees rated as the top essential feature
Figure 3: Importance of primary financial institution features (% who rated feature as essential or preferred), November 2016
Seven in 10 consumers agree that face-to-face access helps build long-term relationships
Figure 4: Attitudes related to customer relationships, November 2016
Women and older customers have higher trust levels
Figure 5: Attitudes related to trust, November 2016
The opportunities
Incentives for parents to set up children’s accounts might help in new customer acquisition
Mobile banking apps can be made more user-friendly
Increasing trust levels
What it means

THE MARKET – WHAT YOU NEED TO KNOW
Chatbots and banking customer service
Robo-investment advisors
Digital disruption in lending
Canadian banks react to the fintech challenge
Canadian economy finishes 2016 on a strong note

MARKET FACTORS
Chatbots and banking customer service
Robo-investment advisors
Digital disruption in lending
Canadian banks react to the fintech challenge
Real estate sales activity in 2017 to mainly decline, according to the CREA
Canadian economy finishes 2016 on a strong note

KEY PLAYERS – WHAT YOU NEED TO KNOW
Credit Karma crosses the border to Canada
Peer-to-peer Lending Loop returns to the market
Hollis Wealth sold by Scotiabank to Industrial Alliance
Coast Capital going national
Erica: Bank of America’s first Artificial Intelligence voice banking system
Air Canada and CIBC launch multicurrency prepaid card for travellers
MasterCard’s bot for banks

INDUSTRY DEVELOPMENTS
Servus launches new lower interest payday loan alternative
Canadian credit unions set to benefit from Grow and Celero partnership for digital banking solutions
Credit Karma crosses the border to Canada
Peer-to-peer Lending Loop returns to the market
Coast Capital going national
Hollis Wealth sold by Scotiabank to Industrial Alliance
Canada's first ski-thru ATM opens on Whistler Mountain
Bay Street fintech fund tops $100 million mark
Fintech firm buys home improvement financing assets from TD Bank

INNOVATIONS
Marcus, Goldman Sachs’s online lender for the masses
Air Canada and CIBC launch multicurrency prepaid card for travellers
Erica: Bank of America’s first Artificial Intelligence voice banking system
Lucy launched by Thinking Capital
MasterCard’s bot for banks

MARKETING CAMPAIGNS
Select campaigns from Mintel Comperemedia
HSBC offers a cash incentive for new advance customers
Figure 6: HSBC advance chequing account mail advertisement, December 2016
BMO targets new Canadians
Figure 7: BMO New Canadian offer, Print advertisement, October 2016
Prospera markets to parents
Figure 8: Prospera credit union youth savings account mail, September 2015

THE CONSUMER – WHAT YOU NEED TO KNOW
TD and RBC are the top two primary bank choices
Family and branch locations are dominant factors when selecting first bank
Value for money among top two factors with regard to primary Financial Institute
Around half of consumers use mobile banking
Seven in 10 consumers agree that face-to-face access helps build long-term relationships
Women and older customers have higher trust levels

CHOICE OF PRIMARY FINANCIAL INSTITUTION
TD and RBC are the top two primary bank choices
Figure 9: Choice of primary financial institution, November 2016
Desjardins and Tangerine appeal to a younger clientele, BMO to older consumers
Figure 10: Choice of primary FI (select), age differences, November 2016
TD is the clear favourite among Asian Canadians
Figure 11: Choice of primary FI, overall population vs Asian Canadians, November 2016
Credit Unions and small banks play a larger role in the US

REASONS INFLUENCING CHOICE OF FIRST BANK
Family and branch locations are dominant factors
Figure 12: Top reason for choice of first bank (%), November 2016
More than half of 18-24s influenced by parents/friends
Figure 13: Choice of family related reason as #1 factor for choosing their first bank account, by age, November 2016
Branch locations increase brand familiarity

IMPORTANCE OF FEATURES IN A PRIMARY FI
Low fees rated as the top essential feature
Figure 14: Importance of primary financial institution features (% who rated feature as essential or preferred), November 2016
Branches as a source of reassurance
Mobile banking and online chat matter more to the young
Over-65s more likely to rate free chequing accounts as essential

MOBILE BANKING
Around half of consumers use mobile banking
Figure 15: Mobile banking usage, November 2016
Mobile banking usage peaks among 18-24s
Figure 16: Mobile banking usage, by age, November 2016
Canadian mobile banking usage is similar to the US
About half of users are satisfied with mobile banking capabilities
Figure 17: Attitudes related to mobile banking, November 2016
Women and older mobile banking users more satisfied
Women more likely to prefer using a phone/tablet for banking transactions
Younger mobile app users are the leaders in activity and usage
Figure 18: Attitudes related to mobile banking (select), 18-44s vs over-45s, November 2016
Over-45 mobile banking users are more likely to use tablets
One in five 18-24s began using mobile banking in the past six months
Mobile banking apps can be made more user-friendly
Making it easier to open accounts using mobile apps
Mobile banking usage trends by financial institutions

CUSTOMER RELATIONSHIPS
Seven in 10 consumers agree that face-to-face access helps build long-term relationships
Figure 19: Attitudes related to customer relationships, November 2016
RBC and Desjardins customers are more open to consolidation
Figure 20: Agreement with ‘one bank to manage all’ statement (% agree), by primary FI customers, November 2016
Younger consumers more likely to build relationships with companies that have a strong social media presence
Around half of consumers believe that financial advisors at banks/credit unions are as good as those at brokerages
Figure 21: Attitudes relating to banking services, November 2016

TRUST IN FINANCIAL INSTITUTIONS
Women and older customers have higher trust levels
Figure 22: Attitudes related to trust, November 2016
Desjardins customers relatively more confident about mistakes being fixed quickly
Figure 23: Attitudes related to correcting errors, by primary FI customers, November 2016
CIBC scores lower on trust with regard to fair treatment
Figure 24: Attitudes related to trust, by primary FI customers, November 2016
Increasing trust levels
Women and older consumers are also more confident about the safety of their personal information
Canadian banks enjoy higher levels of trust compared to US banks

APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations and terms

List of Table

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