Fintech and the Canadian Consumer - Canada - March 2021

OVERVIEW
What you need to know
Key issues covered in this Report
EXECUTIVE SUMMARY
Top takeaways
Market overview
Impact of COVID-19 on Fintech and the Canadian consumer
Figure 1: Short, medium and longer-term impact of COVID-19 on financial technology and the Canadian consumer, February 2021
Opportunities
Mobile banking advantages can be highlighted to drive usage
Young women are more banking app-dependent but less interested in other financial apps
Fintech partnerships can hasten innovation in larger banks
How can Fintech help consumers?
Challenges
Is the reduction in branch visits a permanent behavioural shift or a pandemic-inspired temporary measure?
Fintechs are unlikely to be a major threat to established financial institutions
Open Banking in a Canadian context
THE MARKET – KEY TAKEAWAYS
Economic impact of COVID-19
Bank of Canada projects 4% growth in 2021
Impact of COVID-19 on Fintech
Central Banks and digital currencies
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 Fintech
Central banks and digital currencies
THE MARKET – APPS & TOOLS
Digital tools and Canadians
Artificial intelligence
Scotiabank rolls out AI-powered cashflow predictor Sofia
BMO launches AI financial advice tool and adds features to its financial planning platform
CIBC launches AI-powered virtual assistant
RBC debuts Aiden
Financial planning and advice
TD launches new financial planning and investing app
Figure 2: Find your beginning with TD GoalAssist, October 2020
Scotiabank launches Advice+, a digital, financial planning centre
Figure 3: Scotiabank – It’s You, Plus, September 2020
CIBC launches new platform to help clients build their financial plans
New digital banking features
Scotiabank simplifies digital banking with a new resource for seniors
TD unveils new digital cashflow tools
CIBC adds spending insights to mobile app
HSBC announces real-time payments tool
BMO launches new digital feature called Card Tracker
Case study: Ally Bank uses gamification to drive financial literacy
COMPANIES AND BRANDS – KEY TAKEAWAYS
Canada approves world’s first Bitcoin ETF for retail investors
Libra rebrands
New platform allows users to invest in consumer credit
COMPETITIVE STRATEGIES
Canada approves world’s first Bitcoin ETF for retail investors
Other companies follow suit
Libra rebrands
Walmart partners with Ribbit (US)
PayPal launches new service enabling users to buy, hold and sell cryptocurrency
Wealthsimple testing new feature
PayFare files to go public on the Toronto Stock Exchange
MARKETING CAMPAIGNS & LAUNCHES
BMO creates 281 pieces of content to be relevant to Millennials
Figure 4: New BMO eclipse Visa Infinite Card | My Kind of Rewards, December 2020
ATB lends its name to new digital challenger brand
Figure 5: Brightside latest Instagram post, February 2021
Challenger bank Neo raises $25 million
Hudson’s Bay and Neo Financial announce strategic partnership
Figure 6: Neo Financial Instagram post on HBC card launch, February 2021
Gemini to offer credit card with crypto rewards (US)
THE CONSUMER – KEY TAKEAWAYS
Mobile banking is the most popular Fintech tool
Online banking is preferred to mobile apps
Branch visits take a pandemic hit as digital usage accelerates
Consumers see positives in Fintech
FINTECH TOOLS AND PRODUCTS
Mobile banking is the most popular Fintech tool
Figure 7: Usage of Fintech tools, December 2020
Usage declines with age
Figure 8: Usage (net) of Fintech tools, by age, December 2020
Figure 9: Moka Facebook post, December 2020
Women are equally engaged in some tools
Figure 10: Usage of and interest in Fintech tools, by gender, December 2020
How can interest levels of women be enhanced?
Fingerprint access and mobile banking are of more interest to older non-users…
Figure 11: Interest in Fintech tools, 18-44s vs over-45s, December 2020
…while fraud detection, voice and virtual assistant access and mobile payments are of equal interest
Figure 12: LifeLock ID theft protection ad, February 2021
Cryptocurrencies are experiencing a second boom
ATTITUDES TOWARDS MOBILE APPS AND AUTOMATED BANKING
Perception of no value-add is the main hurdle for mobile banking adoption
Figure 13: Attitudes related to mobile apps and automated banking, December 2020
Mobile banking advantages can be highlighted to drive usage
Figure 14: Commerce Bank mobile banking app email ad, December 2020
Many consumers are looking for guidance and banks are responding
Figure 15: Attitudes related to mobile apps and automated banking (% agree), by age, December 2020
More than half of 18-34s are interested in using wearables for store payments
Figure 16: Amazon One: an easier way through your day, September 2020
Half find chatbots useful for answering simple questions
Figure 17: Digit Instagram post, January 2021
BANKING CHANNELS
Online banking is preferred to mobile apps
Figure 18: Banking channels usage and attitudes, December 2020
Apps favoured by younger consumers, computers favoured by older consumers
Figure 19: Banking channels usage and attitudes, by age, December 2020
Young women are more banking app-dependent than young men
Figure 20: Banking channel usage – 18-34s, by gender, December 2020
Young men more likely to download and not use financial apps
Branch visits take a pandemic hit as digital usage accelerates
Figure 21: Attitudes related to impact of COVID-19 on channel usage, December 2020
Three in four 18-34s have increased mobile banking usage due to the pandemic
Figure 22: Attitudes related to impact of COVID-19 on channel usage, by age, December 2020
Is the reduction in branch visits a permanent behavioural shift or a pandemic-inspired temporary measure?
CONSUMER IMPACT & INNOVATIONS
Consumers see positives in Fintech
Figure 23: Attitudes related to the impact of Fintech on consumers (% agree), December 2020
Men generally are more optimistic about Fintech
Figure 24: Attitudes related to the impact of Fintech on consumers (% agree), by gender, December 2020
Fintech partnerships can hasten innovation in larger banks
Older consumers more concerned about security
Figure 25: Attitudes related to the impact of Fintech on consumers (% agree), 18-44s vs over-45s, December 2020
Two in five parents are interested in apps to help children learn about finances
Figure 26: Interest in innovations, December 2020
Interest in innovations highest among 18-34s
Figure 27: Sensibill Instagram post, March 2019
Figure 28: Interest in innovations, by age, December 2020
Seniors demonstrate some interest in specialized apps
CHALLENGERS VERSUS ESTABLISHED BANKS
Big banks dominate Canadian consumer banking
Big tech far less trusted than Canadian banks
Figure 29: Attitudes towards challenger banks and Fintech impact, December 2020
The prospects of Fintech challengers
Open Banking in a Canadian context
Figure 30: Attitudes towards challenger banks and Fintech impact (% agree), by age, December 2020
Preference for humans ensures that branches will not go away
Young men are the best bet for challenger banks
Figure 31: “Fintech companies are a real alternative to banks” (% agree), by gender and age, February 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Mintel Trend Drivers
Abbreviations and terms