Attitudes towards Technology in Financial Services - Canada - March 2015

INTRODUCTION
Methodology
Abbreviations
EXECUTIVE SUMMARY
The Market
Population changes brings new opportunities
The Consumer
PCs and mobile device ownership is high
Figure 1: Device ownership, December 2014
Bank accounts tend to remain at traditional banks, online-only institutions gain traction
Figure 2: Have bank account, December 2014
Internet banking remains more commonly conducted using PCs than on mobile devices
Figure 3: Usage of online banking, December 2014
Whether online or mobile, account monitoring actions are most popular
Figure 4: Banking actions (any device), December 2014
On-the-go rewards resonate, security concerns hinder interest in mobile payment
Figure 5: Interest in products and services, December 2014
Banking customers have confidence in their financial institution’s ability to keep information safe and still value personal service
Figure 6: Attitudes towards technology in financial services, December 2014
What we think
ISSUES AND INSIGHTS
Harnessing mobile’s capability to provide information on-the-go
The facts
The implications
Consumers want a more modern in-branch experience
The facts
The implications
Helping parents reach financial goals with PFM tools
The facts
The implications
Customers will respond to incentives
The facts
The implications
TREND APPLICATION
Trend: Life Hacking
Trend: Access All Areas
Trend: Help Me Help Myself
MARKET DRIVERS
Key points
Demographic overview
Canadian population count
Figure 7: Share of population of Canada, by territory/province, 2014
Canada’s population is aging and will continue to do so in the coming years
Figure 8: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Economic overview
Consumers’ economy to pick up, but risks remain
Figure 9: Household disposable income and savings rate in Canada, Q1 2008-Q1 2014
Consumer confidence may waver with falling oil prices
Canada’s employment rates remain steady
Figure 10: Canada’s unemployment rate, by gender, January 2008-January 2014
Wealth distribution in Canada
Figure 11: Canada median net worth, by province, 2012
INNOVATIONS IN TECHNOLOGY IN FINANCIAL SERVICES
Mobile apps from financial institutions
PC Plus
Cineplex-SCENE
Tangerine Bank’s biometric tools for mobile banking
TD Bank app helps customers pinch pennies
In-branch innovations
New RBC location replaces cashier's counter with work stations and touch screens
TD’s new concept “Green Branch”
Finance Management Platforms and Apps
myFinanceTracker from RBC
Mint
BillGuard
Money transfer through social media
Snapchat
Venmo payments
Ribbon
Mobile payment innovations
Apple Pay
Intuit’s GoPayment
Square Reader (Square Register App)
Wearable payment innovations
RBC and Nymi
Scotiabank and Quick Balance smartwatch app
FINANCIAL INSTITUTION OVERVIEW
Banks with Traditional Branches
TD Financial Group
RBC
Bank of Montreal (BMO)
Scotiabank
Credit Unions
Meridian Credit Union
Vancity
Online-Only Banks
Tangerine Bank (formerly ING Direct)
THE CONSUMER – DEVICE OWNERSHIP
Key points
Ownership of personal computers and mobile devices is high
Figure 12: Device ownership, December 2014
Differences in ownership of mobile devices
Figure 13: Device ownership, by age, December 2014
Tablet ownership varies less by age
THE CONSUMER – BANK ACCOUNT OWNERSHIP
Key points
Virtually all Canadians hold a bank account
Figure 14: Have bank account, December 2014
Most have their accounts with traditional branches
Figure 15: Location of account, December 2014
THE CONSUMER – USAGE OF ONLINE BANKING AND PREFERRED DEVICES
Key points
Most account holders use online banking
Figure 16: Usage of online banking, December 2014
Virtually all conduct online banking on personal computers and about half use mobile devices
Figure 17: Devices used for banking actions, December 2014
Barriers to mobile banking centre around motivation and security
Figure 18: Barriers to online banking via a mobile device, December 2014
Older consumers need motivation, younger consumers want security and functionality
THE CONSUMER – ELECTRONIC BANKING ACTIONS AND DEVICES
Key points
Online banking actions centre around account monitoring
Figure 19: Banking actions (any device), December 2014
Seniors are more conservative, younger consumers go beyond the basics
Figure 20: Banking actions (any device), by age, December 2014
Leveraging mobile banking to address needs
Figure 21: Devices used for banking actions, December 2014
Simplifying in-branch transactions
THE CONSUMER – INTEREST IN TECHNOLOGY-BASED BANKING PRODUCTS AND SERVICES
Key points
Mobile apps from banks have traction in terms of usage
Figure 22: Interest in products and services, December 2014
Banks’ mobile apps skews towards younger users
Customers want rewards on-the-go and mobile cheque deposit
Figure 23: Interest in products and services: do not use but would be interested in using, December 2014
Products and services more appealing to men and younger customers
Rewards positively influence usage
Younger banking customers want mobile cheque deposit
PFM tools pique the interests of parents
Mobile payment is of interest to younger consumers, security remains a concern
THE CONSUMER – ATTITUDES TOWARDS TECHNOLOGY IN FINANCIAL SERVICES
Key points
Summary of attitudes towards technology in financial services
Figure 24: Attitudes towards technology in financial services, December 2014
Customers have confidence in their banks
Figure 25: Attitudes towards technology in financial services (security & trust), December 2014
Middle-aged customers show softer trust and confidence in bank security
Leveraging mobile capabilities as a new channel of service delivery
Figure 26: Attitudes towards technology in financial services (satisfaction with mobile/online capabilities & perceived differentiation), December 2014
Banking customers want incentives and still value personal service
Figure 27: Attitudes towards technology in financial services (in-branch value & receptivity towards incentives), December 2014
Rewards and linkages to PFMs appeal to parents and younger customers
Quebecers are polarized in their perceptions of financial institutions
Figure 28: Attitudes towards technology in financial services: Quebec against overall population, December 2014
THE CONSUMER – ATTITUDES TOWARDS TECHNOLOGY IN FINANCIAL SERVICES AND CHINESE CANADIANS
Key points
Chinese Canadians prioritize savings
Greater propensity to own a savings account
Figure 29: Device ownership: Chinese Canadians vs overall population, December 2014
Figure 30: Have bank account: Chinese Canadians vs overall population, December 2014
Their interest in technology extends into financial services
Figure 31: Interest in products and services (use services): Chinese Canadians vs overall population, December 2014
Figure 32: Interest in products and services (do not use but would be interested in using): Chinese Canadians vs overall population, December 2014
Agreement to attitudinal statements reflect higher usage
Figure 33: Attitudes towards technology in financial services: Chinese Canadians against overall population, December 2014
THE CONSUMER – TARGET GROUPS
Key points
Four Target Groups
Figure 34: Target groups for attitudes towards technology in financial services, December 2014
Tech Enthusiasts (32%)
Conservative (25%)
Convenience-Driven (22%)
Disengaged (21%)