Chequing acquisition is shifting from branch-led to marketing-led dynamics. Consumer perceptions of convenience and distinctiveness, led by investments across the purchase funnel, are playing a bigger role in driving acquisition performance.
Given their scale advantage, the Big 5 national banks enjoy the highest scores for perceived convenience and distinctiveness and, as a result, received an outsized share of acquisition in Canada in 2019.
But competition for new customers remains fierce. The 2019 Canadian Shopper Survey reveals significant challenges for Canada’s Big 5 banks as they seek to stay relevant over the next decade.
First, banks need to attract younger customers. Second, Canadian consumers — just like those in other parts of the world — are growing more comfortable with non-banks. Third, branches are far less important to consumers than they used to be, at least for sales and service.
There’s no doubt that there will be expensive trade-offs for Canadian banks moving forward. As interest rates continue to shift, traditional banks risk losing customers and/or deposits based on rate alone. Those trends will only be exacerbated if current value propositions are undifferentiated and/or unsubstantiated. Banks must closely examine the trade-offs between price, incentives, products, features and marketing to determine how to compete most efficiently and effectively.
Principal, San Francisco
Research Manager, Chicago