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Canadian Consumer Banking Behaviour | January 2021

In this month’s bulletin that analyzes Canadian customer channel behaviour through December, we are starting to discern a systemic, permanent step-change in the way Canadians are using branches and digital channels to fulfill their financial-services needs. A comparison of the 11 months beginning February 2020 with the prior-year period shows a 27% reduction in the number of Canadians who reported visiting a branch in the average month: 30.1% in 2020 versus 41.1% in the same period in 2019.

We expect to see this gap grow even larger as we begin to report the full-year trends staring with March 2020, when the COVID-19 pandemic took hold of the country. But even the data so far represent the biggest single step-change in recent Canadian banking history. Of course, this is due to the banks’ and consumers’ responses to the COVID-19-induced lockdown, but the question is how much of this behaviour will revert to typical when and if normal conditions resume? The way banks and FIs are answering this question is causing many of them to consider reconfiguring every aspect of their distribution, sales and service paradigms to reflect the new realities.

Branch Channel Usage – Any Purpose | By Province

AB
BC
ON
QC
All Other
Overall

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

The percentage of customers visiting branches in December in BC, Alberta and Other Provinces continued to tick up, while Ontario visits remained steady. Visits in Quebec, however, continued to fall. This broadly reflects the timing of the reinstatement of more strenuous lockdown conditions in Quebec and parts of Ontario. We would expect Alberta and other western provinces to follow this trend in January.

Branch Channel Usage – Any Purpose | 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

Looking at visits specifically directed at new product purchase, there was a similar 20% increase in branch and mobile visits in December – a seasonality trend that wasn’t apparent in December 2019.

An analysis of prior-year trends indicates, however, that this December increase may be tied to the bringing forward of purchases usually made in January due to concerns about future lockdowns.

Channel Usage – New Product

Branch
Mobile Apps
Online
Phone

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

The inextricability of mobile app and branch usage trends is particularly interesting, suggesting these two channels are becoming largely interchangeable.

This month, we look at the surprising differences in the way each bank’s apps are rated between customers with devices on Android (Google) and iOS (Apple) platforms. Scotiabank (4.0) and TD (3.9) have the highest engaged customer scores in December on Android compared with the market average of 3.6. CIBC and BMO have lower scores of 2.8, while NBC is at the bottom of the pack with 2.5.

Engaged Customer Ratings – Mobile Banking Apps | Android

Overall Rating (Average)
Scotiabank
TD Bank
BMO
CIBC
RBC
Tangerine
NBC

Source: Apple/Google Appstore data via Ipiphany/Touchpoint Group (Engaged Customers = NPS Ratings with verbal feedback.)

The positions are somewhat reversed for iOS users, however, where CIBC and BMO lead with average December scores of 3.9 while TD and Scotiabank are close to the market average at 3.5.

Overall, Scotiabank and TD are still the market leaders because there are five times as many Android as iOS users. Still, it may make sense for banks to prioritize their development efforts for one platform over another if customers on that platform use the bank’s services more frequently or have commensurately higher net worth, depositing or borrowing potential.

Engaged Customer Ratings – Mobile Banking Apps | iOS

Overall Rating (Average)
Scotiabank
TD Bank
BMO
CIBC
RBC
Tangerine
NBC

Source: Apple/Google Appstore data via Ipiphany/Touchpoint Group (Engaged Customers = NPS Ratings with verbal feedback.)

But why should apps from the same bank with ostensibly identical user interfaces be rated so differently across each platform? The table stakes for app ratings seem to be fundamental security and reliability issues such as the authentication experience at login and basic functionality such as cheque depositing etc. As long as the app fulfills these basic needs, additional functionality, more intuitive U/I and customer support register incrementally towards the higher score. But if something goes wrong with the fundamentals (which is most likely when an upgrade takes place), then the extra functionality is deemed largely irrelevant. As a result, the different platform scores tend to reflect the robustness of each bank app’s own operating system on each platform when a fundamental system change takes place, such as an app upgrade.

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 to be subscribed.

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