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COVID-19 and the Canadian Consumer

Canadian banks have made significant changes to their operations due to COVID-19, but there’s more work to be done.

Many customers don’t think that banks are providing necessary features to help them cope with the crisis – even when those features are already in place. The ability to provide what customers want and need will be more important than ever in coming months, whether these customers return to the branch or use digital channels for their banking needs.

As part of its ongoing research into how banks and their customers are responding to the COVID-19 crisis, Novantas recently surveyed financial decision makers in more than 500 Canadian households. The goal was to measure how consumers are changing their banking behavior during the pandemic, as well as their perceptions about how the banking industry has responded to the crisis.

Novantas will continue to monitor the impact that COVID-19 is having on the Canadian banking industry and its customers.

Customers feel that their financial institutions aren’t delivering useful bank features during the crisis. Depending on actual implementation, there’s room to either improve these features or build more awareness about them.

Consumer Ranking of Bank Features During COVID-19: Most Useful vs. Aware of Implementation

Most Useful
Aware of Implementation

Source: Novantas Research | 2020 Canadian Consumer Responses to COVID-19 (N=514), weighted on age / income / primary bank type

Questions Asked (press + to expand)

Q Which of the following features would you find most useful from your primary bank during the coronavirus crisis? [Select all that apply]

Q Which of the following features, if any, has [Field-Q8_Primary] implemented in response to the coronavirus crisis? [Select all that apply]

Consumer Ranking of Bank Features During COVID-19: Most Useful vs. Aware of Implementation

Source: Novantas Research | 2020 Canadian Consumer Responses to COVID-19 (N=514), weighted on age / income / primary bank type

Questions Asked (press + to expand)

Q Which of the following features would you find most useful from your primary bank during the coronavirus crisis? [Select all that apply]

Q Which of the following features, if any, has [Field-Q8_Primary] implemented in response to the coronavirus crisis? [Select all that apply]

Channel usage for a new product has seen a decisive shift to online and mobile, with branch dropping notably.

National Customer Channel Usage for New Product

Branch
Phone
Online
Mobile

Source: DemandScape/CFM
Note: Point estimates represent 3-month rolling averages of modeled response data

Change in Customer Penetration

2018 Avg vs 2019 Avg
2019 Avg vs 2020 Q1 Avg
2020 Q2 Avg vs 2019 Q2 Avg
Online
+1.4%
-2.7%
-3.5%
Branch
-2.3%
-17.4%
-25.1%
Mobile
+5.0%
+28.9%
+64.8%
Phone
-29.4%
+22.0%
+38.7%

And 22% of consumers indicate they are unlikely to return to the branch in a post-COVID world. What can be done to encourage digital migration elsewhere?

Consumer Likelihood to Return to a Bank Branch

Somewhat / Very Unlikely
Very / Somewhat Likely
Neither Likely Nor Unlikely

``Somewhat / Very Unlikely`` by Consumer Segment

Internet Ready
Innovation Seeker
Thin-branch Ready
Channel Mixer
Branch Traditionalist

Consumer Segment Definitions for “Somewhat / Very Unlikely” Chart (press + to expand)

Digital Ready: Branch detached. Apathetic about bank relationships. Not branch dependent, and conduct most banking through online channels.

Innovation Seeker: Branch detached. Does not prioritize access to branches when choosing a bank, but still does sometimes visit.

Thin-Branch Ready: Not branch dependent and often uses other channels for banking activities. Still prefers banks with branches and the knowledge that they can easily visit if needed.

Channel Mixer: Branch attached but only visit for some banking activities. May use other channels, but values access to branches when choosing their bank.

Branch Traditionalist: Strong relationship with bank branch. Places high value in its services, and prefers visiting the branch for most banking activities.

Source: Novantas Research | 2020 Canadian Consumer Responses to COVID-19 (N=514), weighted on age / income / primary bank type

Survey says – ramp up advice in non-branch channels. Aside from simple deposit tasks, the main reason Canadian consumers would return to a branch is to discuss their finances.

Reasons for Returning to a Bank Branch

Source: Novantas Research | 2020 Canadian Consumer Responses to COVID-19 (N=514), weighted on age / income / primary bank type
Q Which of the following are reasons you would return to the bank branch after COVID-19 restrictions are lifted? [Select all that apply]

Reasons for Returning to a Bank Branch

Source: Novantas Research | 2020 Canadian Consumer Responses to COVID-19 (N=514), weighted on age / income / primary bank type
Q Which of the following are reasons you would return to the bank branch after COVID-19 restrictions are lifted? [Select all that apply]

Stay up-to-date on the latest banking trends
Stay up-to-date on the latest banking trends

For more information, contact Novantas Marketing

+1 (212) 953-4444