CMA is pleased to showcase, in partnership with Yahoo Canada, a consumer finance study to better understand Canadians' perceptions on Canadian banking today.
By Shannon Kelley, Market Research Analyst, Yahoo Canada
Once upon a time, in a land far, far away with no smartphones, Canadians tended to be loyal to their banks. No longer is that the case. Yahoo recently conducted a consumer finance study to better understand Canadians' perceptions of the banking industry.
We surveyed a nationally representative group of more than 1200 individuals across the country with equal representation among women and men and across English and French speakers. We found that the majority of today's Canadian consumer of financial products and services are willing to consider changing their bank, regularly take advantage of new offers they come across, and consistently access financial news online to better inform themselves. These trends are particularly true when it comes to New Canadians, millennials and students. By embracing this data, Canadian banks can better position themselves to attract and retain customers.
Our data reveals an increasingly fragmented landscape when it comes to Canadians' loyalty to their current banks. 13% of Canadians in our study had switched their main banking provider in the past 2-3 years. The data show an even higher tendency to change banking providers among New Canadians (33%) and millennials (22%). We also find that the overall number of Canadians who switch their primary bank is growing: 19% of Canadians reported switching their banks in the last five years -- and this number jumps with regard to New Canadians and millennials: 39% and 29% respectively report having changed their bank in the last five years. Overall, about half of Canadians are not loyal to their banks, with 66% of New Canadians reporting they would switch to a new bank if they see an opportunity for better service or more savings.
So, what are Canadians looking for as they contemplate changing their primary bank? Overall, one quarter of Canadians report they would switch their bank if they could access simpler products and services elsewhere. New Canadians (38%) and millennials (37%) are even more interested than the general population in accessing easy-to-use products and services. We also saw some interesting trends when we asked Canadians why they would leave their banks. Here's what we found: 34% thought their bank does not fit their needs; 24% indicated their bank is not convenient; 21% indicated they wanted more offerings from their bank; 21% indicated they needed better service from their bank; and 21% indicated they had a bad experience at their current bank.
Given this landscape, what's the best way to reach new clients today? The answer is online and via mobile. Our study indicates that millennials are more likely to be drawn in by new services and deals: 28% of millennials reported needing another service their current bank does not offer, while 20% of millennials reported that they got "a good deal" (cash reward or prize) when they switched banks. The influence of online -- and particularly mobile -- products, services, and information cannot be overlooked: our study found that millennials and students (18 - 30 years old) are more influenced by online sources, with 1 in 5 reporting they switched their banking provider after learning about alternatives through an online source. Millennials and students also greatly prefer online and mobile banking products and services over other traditional methods of interaction. Our study also showed that across all major banks, 31% of customers use mobile apps to conduct their banking transactions, and that a bank's website is more important to customers than the range of products offered or the opening hours of a given branch.
The profile and preferences of today's Canadian banking customer is certainly changing. We're seeing a great level of openness from young Canadians and New Canadians -- all with increasing spending power -- with regard to the banking sector. New Canadians, millennials, and students are all looking for competitive prices, an array of products and services, and mobile accessibility. Canadian banks are in a unique position to leverage this data to better serve both current and new customers.