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Generational Banking - Canada - January 2016

Published By :

Mintel

Published Date : Jan 2016

Category :

Banking

No. of Pages : N/A

Old is gold in Canada in terms of wealth and financial security as over-65s report having the highest amount of investments, lowest debt and feel most financially secure.

Table of Content

Overview

Regional classifications
Income

Executive Summary

The issues
Over-65s have the highest ownership of investment products
Figure 1: Ownership of savings and investment products at primary and secondary financial institutions, October 2015
Around a third of Canadians have less than $5,000 in debt
Figure 2: Amount of debt, October 2015
Around two thirds of consumers prefer face-to-face purchases of complex products
Figure 3: Attitudes related to banking channels, October 2015
Fees and customer service are the top choice factors
Figure 4: Choice factors for banking, October 2015
The opportunities
Catering to channel preferences and optimizing the multi-channel experience
Figure 5: Banking channel attitudes by age (% who agree), October 2015
Aligning choice factors to generational preferences
Figure 6: Choice factors related to age, October 2015
Dealing with women centric financial issues
Encouraging multiple product ownership using the “Stickiness Index”
Figure 7: Product stickiness index, October 2015
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 ethnically diverse
Alberta faces the brunt of the resource sector decline
Proportion of highly indebted households continues to rise

The Market – Market Factors

Canada’s population is expected to age in the coming years
Figure 8: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Figure 9: Projected trends in the age structure of the Canada population, 2014-19
The population is growing and ethnically diverse
Growth of the LGBT community
Alberta faces the brunt of the resource sector decline
Proportion of highly indebted households continues to rise
Canadian dollar slid to 12-year low of 70 cents US

Key Players – What You Need to Know

BMO starts Robo-Advisor and CIBC launches a digital advice channel
Internationally, banks are using technology to reach very young consumers
Apple Pay launches in Canada
Scotiabank and CIBC launch innovation labs

Key Players – What’s New?

Bank of Montreal Starts Robo-Advisor offering its ETFs
RBC to offer voice recognition
Apple Pay launches in Canada
Digital financial advice is helping CIBC offer 800,000 affluent retail clients access to dedicated financial advisor
Internationally, banks are using technology to reach very young consumers
Scotiabank and CIBC launch innovation labs
Customer service on social media platforms

The Consumer – What You Need to Know

Over-65s have the highest ownership of investment products while a quarter of Canadians can be termed as mass affluent
Around a third have less than $5,000 in debt
Young females are the least financially secure while older consumers most active in managing their investments
Older consumers are more demanding of quality customer service
Young males more interested in mobile offers and using social media for financial research

The Consumer – Savings and Investments

Over-65s have the highest ownership of investment products
Figure 10: Ownership of savings and investment products at primary and secondary financial institutions, October 2015
Almost a quarter of Canadians fall into the mass affluent category
Figure 11: Amount of investments, October 2015

The Consumer – Repertoire Analysis

A quarter of consumers have six or more products with their primary FI…
Figure 12: Repertoire of product ownership with primary FI, October 2015
and one product with another FI
Figure 13: Repertoire of product ownership with other FIs, October 2015
Lines of Credit are the “stickiest” product
Figure 14: Product stickiness index, October 2015

The Consumer – Household Debt

Around a third of Canadians have less than $5,000 in debt
Figure 15: Amount of debt, October 2015
Lines of credit are more likely to be held by older consumers
Figure 16: Ownership of debt products at primary and secondary financial institutions, October 2015
Albertans are more likely to be worried about debt; Quebecers less so
Figure 17: Attitudes related to debt and borrowing, October 2015
Younger Canadians more open to marketplace lenders

The Consumer – Banking Channel Preferences

Around two thirds of consumers prefer face-to-face purchases of complex products
Figure 18: Attitudes related to banking channels, October 2015
Young males more interested in mobile offers and using social media for financial research
Figure 19: Banking channel attitudes (% who agree), by age, October 2015

The Consumer – Degree of Financial Engagement

Older consumers most active in managing their investments
Figure 20: Attitudes related to interest in personal finances (% agreement), October 2015
Younger Canadians are more reliant on friends and family for their financial decision making
Figure 21: Attitudes related to knowledge of banking products, October 2015

The Consumer – Financial Security

Young females are the least financially secure
Figure 22: Attitudes related to financial security (% who agree), October 2015
Around two in five mortgage holders prioritize paying down mortgage over investments
Figure 23: Attitudes related to investing preferences, October 2015

The Consumer – Choice Factors

Fees and customer service are the top choice factors
Figure 24: Choice factors for banking, October 2015
Older consumers are more demanding of quality customer service
Introductory gifts, recommendations and mobile experience resonate with younger consumers
Figure 25: Choice factors related to age, significant differences, October 2015
Credit Unions may be in danger of losing a core competitive advantage
Figure 26: Attitudinal statement about credit unions, October 2015

Appendix – Data Sources and Abbreviations

Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

List of Table

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