Canadian banks can do more to spur digital and multi-channel banking

13 June 2017 5 min. read

With consumers becoming increasingly tech-savvy, Canadian banks have rolled out a number of innovations to help them go about business, however a new study from Oliver Wyman states they could still do more.

Through the addition of digital channels through which consumers can perform a variety of bank transactions, banks have have diluted the need for a range of, what used to be, traditional forms of banking. 

The proliferation of new digital channels through which the customers of banks can perform transactions has led to considerable changes in the dynamics for more traditional customer journeys. In a new report from Oliver Wyman, titled 'Point of View: Consumer Banking in Canada: Omnichannel Strategy', the management consulting firm explores current channel uptake trends among Canadian banking system customers. The report is based on 4,000 Canadian respondents, and focused on key trends, including digital banking needs, attitudes, and behaviours.

Behavioural segmentation of Canadian consumers

Use of digital channels among Canadian respondents is relatively high, 90% use at least one, with both internet and mobile channels being leveraged. The consumers also continue to visit branches, at 65% of respondents, while 80% of respondents value the convenience of physical branches.

Across the segment as a whole, 9% of respondents say that use branches only, with no use of online channels for any transactions. Around 16% of respondents use both branches and online/mobile channels for simple transactions, but continue to use branches at least twice per month

The largest segment of respondents are relatively ‘digital-centric’, opting to use both branches and online/mobile channels for simple transactions, but visit the branch once a month or less. A further 13% of respondents values the branch, but doesn’t use it for simple transactions. Finally, 21% of respondents also leverage digital channels to access value pricing/product features.

Age distribution by behaviour segment

The research does note considerable differences between the behaviours of various consumer groups. Those using branches only tend to be older, with 35% of the category between 55-70 and 31% over 71, millennials account for 10% of the category. Interestingly however, the research finds that digital optimisers are less likely to be heavily inhabited by millennials, although the millennial group is the most likely to have a ‘branch in mind only’ (20%). Those aged 71 and over tend to be less likely to use digital channels, while those between 35-70 have relatively similar distribution profiles across the channels surveyed.

Percent of branch transactions by type

The consultancy firm also asked respondents about their behaviour around branches, as well as the total percentage, on average, of that transaction per year. Depositing cash was the most frequently exercised activity at the bank branch, with an average of 6.7 visits per years, while 42% of the type of transaction involved a visit to a branch. Updating my passbook/bank book took second spot, cited by 38% of respondents as a branch activity, with an average of 3.6 visits per year.

Depositing a cheque, withdrawing cash and reviewing account information were all relatively frequent activities, at 4.6, 4.5 and 4.5 visits per years on average – although each of these activities came in at less than a third of that kind of activity. Bill paying was the lowest branch related activity, at 7% of all such transactions – accounting for 2 visits per years.

Mystery shopper waterfall of informed functions

To better understand the way in which respondents are made aware of digital options for various transaction types, the consultancy firm sent mystery shoppers to open accounts at various institutions.

The results – the firm notes – show that during a key period of attentiveness from a customer, many of the institutions did not inform the mystery shoppers of the digital options available. The bank was keen to inform customers of the debit card (93%) as well as online banking (86%), however, other digital options, such as web bill pay (7%), mobile banking (43%) and e-statements (50%) were less well advertised.

The mystery shopper in addition explored the kinds of digital channels that they could sign-up for/get in the branch itself. While the debit card was relatively high, 79%, digital channels stood at 57% for online banking, 43% for e-statements and 43% for mobile banking. In terms of e-statements, which can significantly reduce paper waste, 57% of mystery shoppers were offered it by default, for 36% it was not mentioned, while 7% had an opt-in option for paper statements.

Percent of population and total branch transactions

While digital penetration is relatively high among Canadians in the banking segment, the research points out that currently more can be done to convert customers to digital channels. As it stands, 9% of the population accounts for 39% of branch transactions, with 16% of the multi-channel users account for more than 50% of branch transactions.

The digital-centric respondents, on the other hand, account for 7% of transactions – while the other two groups – which make up a total of 34% of respondents – do not use branches at all.