Consumer Finances and Priorities - Canada - February 2021

OVERVIEW
What you need to know
Key issues covered in this Report
EXECUTIVE SUMMARY
Top takeaways
Market overview
Impact of COVID-19 on consumer finances
Figure 1: Short-, medium- and longer-term impact of COVID-19 on consumer finances and priorities, January 2021
Opportunities
The prepaid and secured card market opportunity
Is the widespread pessimism justified?
How can the financial industry help Canadians manage money better?
How can the financial industry connect better with women?
Half of parents of under-18s list saving for children’s education as a priority
Challenges
Financial and mental health concerns combine to hit financially weaker Canadians
Women under more COVID-19-related financial pressure
Non-Chinese Asian Canadians less financially secure
THE MARKET – KEY TAKEAWAYS
Economic impact of COVID-19
Households sitting on a huge pile of cash
Bank of Canada projects 4% growth in 2021
Digital tools and Canadians
THE MARKET – MARKET FACTORS
Economic impact of COVID-19
Households sitting on a huge pile of cash
Bank of Canada projects 4% growth in 2021
Impact of COVID-19 on consumer finances and priorities
Figure 2: Short-, medium- and longer-term impact of COVID-19 on consumer finances and priorities, January 2021
New benefits come into force as CERB ends
Mortgage deferrals also help contain delinquencies
THE MARKET – APPS & TOOLS
Digital tools and Canadians
Scotiabank launches Advice+, a digital, financial planning centre
Figure 3: Scotiabank – It’s You, Plus, September 2020
Scotiabank simplifies digital banking with a new resource for seniors
BMO launches AI financial advice tool and adds features to its financial planning platform
TD launches new financial planning and investing app 
Figure 4: Find your beginning with TD GoalAssist, October 2020
CIBC launches new platform to help clients build their financial plans
RBC debuts Aiden
HSBC announces real-time payments tool
TD unveils new digital cash flow tools 
CIBC launches AI-powered virtual assistant
BMO launches new digital feature called Card Tracker
Scotiabank rolls out AI-powered cash flow predictor Sofia
Debt management apps can help some borrowers
Splitwise
epost
Debt Manager
Canadian Mortgage app
Debt planner pay-off
PocketGuard
Wellspent helps users “Tinder” their spending
Figure 5: Wellspent | Reflection | Basic, June 2019
COMPANIES AND BRANDS – KEY TAKEAWAYS
Challenger bank Neo raises $25 million
Borrowell to acquire Refresh Financial
Capital One stops ‘risky’ buy-now-pay-later credit card transactions
RBC offers Snapchatters COVID career help
Simplii became the first Canadian bank to let clients use their credit cards for global money transfers
The Canucks’ newest preferred partner is a Canadian start-up that helps build credit easily
COMPETITIVE STRATEGIES
Borrowell to acquire Refresh Financial
Challenger bank Neo raises $25 million
Rakuten partners with Google Pay
Wealth One aiming for profitability amid tensions with China
Wealthsimple testing new feature
Capital One stops ‘risky’ buy-now-pay-later credit card transactions
MARKETING CAMPAIGNS
RBC offers Snapchatters COVID career help
Simplii became the first Canadian bank to let clients use their credit cards for global money transfers
Figure 6: Simplii Twitter and Facebook ads, December 2020
Sweeter than Honey: Capital One Shopping
Figure 7: Capital One Shopping – Fondue, November 2020
The Canucks’ newest preferred partner is a Canadian start-up that helps build credit easily
THE CONSUMER – KEY TAKEAWAYS
One in four have a secured credit card
Two in five have cut spending due to the COVID-19 pandemic
Majority feel in control of their finances
Women under more COVID-19 related financial pressure
Half have been negatively impacted financially by COVID-19
Saving is the top overall priority
USE OF FINANCING
One in four have a secured credit card
Figure 8: Usage of financial products and services, November 2020
Secured and prepaid credit cards are growing
Figure 9: Usage of financial products and services, by age, November 2020
The prepaid and secured card market opportunity
Figure 10: Chatr secured credit card email campaign, November 2020
Alternative financial services providers: servicing a short-term need at a high cost
Unsecured lines of credit held more by higher income earners and over-35s
Figure 11: ScotiaLine personal line of credit email campaign, January 2021
Second mortgages: the need for caution
PERSONAL FINANCES
Two in five have cut spending due to the COVID-19 pandemic.
Figure 12: Personal finances attitudes & behaviours, November 2020
Majority feel in control of finances but find it hard to save
Figure 13: Personal finance attitudes, November 2020
Over-55s best placed financially
Figure 14: Personal finances attitudes & behaviours (select), by age, November 2020
Figure 15: Personal finance attitudes (select), 18-54s vs over-55s, November 2020
Non-Chinese Asian Canadians less financially secure
Figure 16: Personal finances attitudes & behaviours (select), non-Chinese Asian Canadians vs overall, November 2020
Figure 17: Personal finance attitudes (select), non-Chinese Asians vs overall, November 2020
Women under more COVID-19-related financial pressure
Figure 18: Personal finances attitudes & behaviours (select), men vs women, November 2020
How can the financial industry connect better with women?
Figure 19: SoFi Women in Leadership YouTube screenshot, March 2020
Figure 20: BMO | Jane’s Story, March 2020
IMPACT OF COVID-19
Half have been negatively impacted financially by COVID-19
Figure 21: Impact of COVID-19 on finances, November 2020
Impact is inversely related to age
Figure 22: Impact of COVID-19 on finances (% agree), by age, November 2020
Financial and mental health concerns combine to hit financially weaker Canadians
Figure 23: “The COVID-19 pandemic has negatively impacted my finances” (% agree), by current financial situation, November 2020
Most Canadians are worried about the future: but is the widespread pessimism justified?
Figure 24: General attitudes related to economic future, November 2020
FINANCIAL PRIORITIES
Saving is the top overall priority
Figure 25: Financial priorities, November 2020
Paying for day-to-day living expenses is the top short-term priority
Figure 26: Short-term vs long-term financial priority, November 2020
Age/lifestage determine strength of priorities
Figure 27: Financial priorities, by age, November 2020
Half of parents of under-18s list saving for children’s education as a priority
Figure 28: Desjardins Facebook ad, September 2020
A fifth of over-65s are keen on giving to charities
Women have a few differing priorities
Figure 29: Financial priorities (select), men vs women, November 2020
Investing is a higher priority for Chinese Canadians
Figure 30: Financial priorities (select), differences by ethnicity, November 2020
How can the financial industry help Canadians manage money better?
CONSUMER CONFIDENCE AND FINANCIAL LITERACY
Half of Canadians feel their finances are in good shape
Figure 31: Attitudes related to consumer confidence, November 2020
Over-55s are most confident about their finances
Figure 32: Attitudes related to consumer confidence, 18-54s vs over-55s, November 2020
Women are more worried
Figure 33: Attitudes related to consumer confidence (select), men vs women, November 2020
More than half spend time researching best ways to save/invest
Figure 34: Attitudes related to financial knowledge, November 2020
Figure 35: Moka Facebook post, December 2020
Young men are most engaged and confident …
Figure 36: Select attitudes related to financial knowledge (% agree), by age and gender, November 2020
Figure 37: Manulife investments mobile advertisement, May 2018
… while those with HHI >$150,000/year are also in a distinct tier of financial confidence
Figure 38: Select attitudes related to financial knowledge (% agree), HHI $150,000/year or more vs overall, November 2020
Figure 39: Scotia direct online advertisement, October 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Mintel Trend Drivers
Abbreviations and terms