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Canadian Consumer Banking Behaviour – August 2020

This is the first in a series of monthly reports that monitor changes in Canadian consumer financial behaviour and attitudes about channel usage during the COVID-19 pandemic. Data in this report are collected via the Ipsos CFM survey, along with proprietary questions and bespoke analysis through Novantas’ DemandScape.

We are now seeing the longer-lasting impact on customer behaviors and attitudes from the extended lockdown (now relaxing into stage 3) and consequent restrictions on branch access. For example, the trend towards “Digital Ready” and “Thin-Branch Ready” has accelerated significantly in the most recent calendar quarter compared with the previous 12 months. Two-thirds of Canadians now fall into these two segments compared with 57% prior to lockdown. Additionally, only 6% now fall into the “Branch Traditionalist” segment.

Customer Attitudes Over Time

2017
2019
2020Q1
2020Q2

Sources: 2015/2017 CA Multi-Channel Survey, 2019-2020 Novantas CFM Partnership

Segment Definitions (click + to expand)

Digital Ready: Customers on the leading edge of digital adoption.

Thin-Branch Ready: Do not use the branches much, but still place some importance on access to local branches when choosing a bank.

Innovation Seekers: Use the branch frequently in spite of having little- to-no attachment to it.

Channel Mixers: Use branches a moderate amount and have a very strong emotional attachment to them.

Branch Traditionalists: Highly dependent on bank branches to serve primary chequing account needs.

As consumer behaviour continues to evolve during COVID-19 and beyond, traditional financial institutions must pursue continuous, creative and bold changes to their operating models and distribution networks in order to compete against pure-play digital companies.

Branch usage dropped 26% and ABM usage fell 19% between March and June due to the lockdown, while mobile app usage grew by 6% and online usage held steady. This suggests that mobile and online largely took up the slack from branches. Data through the end of July suggest the fall in branch usage is flattening out with ABM rising again, although online usage continues its seemingly inexorable growth.

Customer Channel Usage in Last Month

Branch
ABM
Mobile
Online
Phone

Source: Novantas’ DemandScape, Ipsos CFM Survey
Note: Point estimates represent two-month rolling averages of modeled response data

The geographical drop in branch usage seems broadly correlated with the timing and duration of the lockdown in the different provinces. BC experienced the steepest drop – 19% between March and May – followed by Alberta (16%), Ontario 15% and Quebec (14%). These provinces have stabilized since May and converged, with the gap between them narrowing from 12.2% (May) to 5.0% (July).

Branch Channel Usage in Last Month by Province

AB
BC
ON
QC
All Other

Source: Novantas’ DemandScape, Ipsos CFM Survey
Note: Point estimates represent two-month rolling averages of modeled response data

The use of online channels for new product application grew by 33% in the six months to July, mostly due to the lockdown. Mobile app usage for new product research fell by 24.5% in the three months to July, suggesting there is room to improve functionality in this area.

Customers Using Channel To Apply for New Product in Last Month

Branch
Mobile
Online
Phone

Source: Novantas’ DemandScape, Ipsos CFM Survey
Note: Point estimates represent two-month rolling averages of modeled response data

We will continue to track these and other trends in each update of this monthly report. Please email Nick Young at nyoung@novantas.com if you would like additional detail.

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