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Canadian Consumer Banking Behaviour | May 2021

This month’s report continues to track the transformation of Canadian channel usage into an emerging post-COVID steady state. We also drill down into the mobile app customer experience where operating platforms are fast maturing and the opportunities for competitive advantage shift to tangible differentials.

Branch usage for any purpose is leveling out at the new normal of 27% of all customers visiting in the last month. That is roughly two-thirds of the 41% who visited in the baseline usage for 2019. (See Figure 1.)

Figure 1: Branch Channel Usage – Any Purpose

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

Looking specifically at channel usage for new product purchase, mobile app and branch seem to have become largely interchangeable, with customers switching from one to another as circumstances change. (See Figure 2.)

Figure 2: 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

This is supported by examining recent trends in mobile versus branch at a provincial level e.g. in Quebec and Alberta. (See Figure 3.) Usage of these channels looks broadly inversely correlated. This indicates that consumers themselves envisage these as interchangeable channels for new product purchase, switching to mobile when branches are less accessible and vice versa.

Figure 3: Mobile vs. Branch for New Product: Quebec & Alberta

QC Branch
QC Mobile
AB Branch
AB Mobile

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

The interchangeability of mobile for branch has prompted us to drill down into the mobile app customer experience, which is the focus of the rest of this report.

In overall mobile app ratings for customer experience, CIBC jumped to the top spot in March 2021 (4.3), up from the fourth position in December 2020 and putting it ahead of Scotia (4.0) and TD (3.9). (See Figure 4.) By April, these three banks’ apps had converged on an average rating of 4, well ahead of BMO and RBC (2.9) and out of sight of NBC (2.7) and Tangerine (2.5). The upshot: of the two biggest banks, TD has been far more successful than RBC in digitizing its retail/relationship customer experience.

Figure 4: Engaged Customer Ratings – Mobile Banking Apps

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

Source: Google Play and iOS App Store Data Nov 2020 – April 2021. Engaged Customers: those providing both a score and a comment in their app feedback

Looking at trends across fiscal quarters, Scotia (3.9) and TD (3.8) led in average mobile app ratings for all F21Q1, followed by BMO (3.4), CIBC (3.3) and RBC (2.6).  Both Scotia (4.0) and TD (3.9) improved their average ratings in F21Q2, but were beaten by CIBC (4.1), which propelled itself into the top spot. This is a salutary reminder that a solipsistic focus on one’s own customer ratings may give a misleading picture unless put into the context of the whole market ecosystem.

We can see from the above that CIBC’s transformation took place between February and March 2021 and can be attributed to substantial improvements in the iOS/Android secure authentication process, particularly biometric (fingerprint) login. CIBC’s improvements can also be attributed to other factors as well, which are explored below.

Novantas/Ipiphany AI analyses verbatim Appstore feedback to isolate the specific customer experience concepts that most impact a bank app’s overall rating. (See Figure 5.) This provides a powerful explanatory schema for the positive drivers of banks’ mobile app ratings that include the user experience of the app itself, its feature functionality, the customer ecosystem and the banking experience. Together, these concepts account for two-thirds of the verbatim feedback accompanying Appstore ratings, with the remaining third accounted for by hygiene factors such as reliability and security which are now more or less table stakes in a world where the app operating systems have matured. The set of 10 high impact customer experience concepts are themselves derived from AI classification of verbatim comments to which bank ratings scores are attributed.

Figure 5: HIGH IMPACT CUSTOMER EXPERIENCE CONCEPTS

User Experience

  • App Usability
    App Easy To Navigate, App Easy to Use, Good App Design
  • App Speed
    Fast App
  • App Accessibility
    Easy to Access App, Convenient App, Good App Service
  • App Efficiency
    Efficient App, Time Saving App, Few App Steps

Feature Functionality

  • App Features
    Wide Range of App Features, Good App Features, Feature Rich App
  • App Functionality
    Effective App, App Functions Well

Customer Ecosystem

  • Customer Service Quality
    Good Service, Good Staff, Fast Service, Satisfied Customer
  • Customer Love
    Happy Customer, Customer Trust, App Makes Life Better

Banking Interaction

  • Interaction Outcome
    Good Outcome, Requirements Met, No Complaints, All OK
  • Banking Experience
    Good Banking Experience, Convenient Banking Experience, Good Experience, Good Bank

By drilling down, we can benchmark banks’ mobile app customer experience performance against each concept. For example, in FQ1 the TD app was ranked outright #1 in six out of the 10 attributes, including all those related to  user experience (app usability, speed, accessibility, efficiency), functionality and “customer love” – defined as the emotional side of the customer relationship. (See Figure 6.)

Figure 6: APP RATINGS BY CONCEPT FQ1

Scotiabank
TD Bank
BMO
CIBC
RBC
Tangerine
NBC

Source: Google Play and iOS App Store Data Nov 2020 – Jan 2021. Engaged Customers: those providing both a score and a comment in their app feedback

For FQ2, however, not only did the CIBC app emerge as overall leader, but it also claimed outright the #1 ranking in six out of the 10 core concepts, including user experience (app accessibility and efficiency), features and functionality, customer service quality and interaction outcome. (See Figure 7.)

Although we have looked across financial quarters for this analysis, Ipiphany AI applied to Appstore data provides ongoing real-time tracking that adjusts on an ongoing basis. That allows savvy bank digital teams to quickly pick up on rapidly emerging negative trends that enables them to course correct in-flight.

Figure 7: APP RATINGS BY CONCEPT FQ2

Scotiabank
TD Bank
BMO
CIBC
RBC
Tangerine
NBC

Source: Google Play and iOS App Store Data Feb 2021 – April 2021. Engaged Customers: those providing both a score and a comment in their app feedback 

We can see how the average customer service quality ratings for CIBC, Scotiabank and RBC in FQ2 are derived, based on the AI attribution of bank scores and verbatim comments to the relevant concept. (See Figure 8.)

Figure 8: APP RATINGS/VERBATIMS FOR CUSTOMER SERVICE QUALITY

CIBC (4.3 Avg.)

Efficient and good service that meets your needs, realistic
CIBC has exceptional service period and I’m extremely happy and well satisfied.
Very helpful and efficient.
Positives: Responsive customer service; Smooth, simple interface; Always improving.
Negatives: Expect offers upon every log in.

Scotiabank (3.7 AVG.)

Customer support at SB said this would be addressed, BUT they have not!

Student banking is part of my everyday life and I’ve been really impressed with the updates to the app. My favourite is checking my credit score and being able to chat with assistance any time I need.

Been great help!

Good service.

RBC (2.7 AVG.)

Can’t get through to direct investing customer support.

The app works fine, but the customer service is terrible. I use RBC direct investing and they charge $10 for a trade, but if you want actual customer service you’re looking at a 3 hour wait on hold. I thought the premium I’m paying would get me actual customer support. Wrong.

It took the rep 45 minutes to believe me it existed and eventually explain where it went.

Source: Google Play and iOS App Store Data Feb 2021 – April 2021. Engaged Customers: those providing both a score and a comment in their app feedback 

Benchmarking banks’ app customer experience dimensions is valuable because we know there is demonstrable statistical correlation between a brand’s ranking and its share of wallet. As a result, the #1 rated bank can be expected to gain disproportionate share. Thus, there is a premium to the competitive advantage that the top spot position confers. If this is the case, CIBC’s mobile app market leadership (if sustained) should be expected to turn into super-normal wallet share and therefore revenue per customer – something its rivals should watch.

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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