More than two out of five Canadian bank customers (43%) are open to using computer-generated advice and services, independent of a human advisor, according to a report by Accenture.
Canadian consumers welcome robo-advice from banks to determine how to allocate their investments (77%), determine the type of bank account to open (76%), and plan for retirement (70%).
Read: Banks vs. robos: competition will transform industry, says BoC
The report is based on a survey of more than 4,000 retail bank customers in North America, including 1,210 in Canada.
“Robo-advice is gaining significant traction in the wealth management industry in Canada, and our research shows that consumers are open to working with robo-advisors for their retail banking needs,” said Bob Vokes, managing director of Accenture’s Canadian financial services practice. “Consumers are excited about the potential savings and accuracy that robo-advice offers. We are now seeing leading financial services players starting to embrace intelligent automation and robotics to simplify and improve the customer experience.”
This year’s survey found that speed and convenience (50% for Canada vs. 49% for U.S.) and lower costs (33% for Canada vs. 27% for U.S.) were cited by respondents as the primary benefits of robo-advice, with millennials and mass-affluent consumers expressing the most interest in the service. Mass-affluent consumers are defined as those earning over $100,000 in annual income.
Non-traditional banks continue to gain momentum
The survey found that Canadian consumers are increasingly willing to bank with non-traditional players, closing the gap with those switching to national banks. Nine percent of Canadian consumers broadened their banking relationship with a new financial services provider in the past year.
Among those respondents who have broadened their banking relationship to other providers, 21% joined a non-traditional provider (online-only bank, payments providers, retailer or insurer), versus 29% who switched to a large regional or national bank. Of those Canadians who switched, 15% of consumers ages 55+ joined an online-only bank, up from only 5% who did the same last year. Millennial switchers increased the move to non-traditional providers from 24% in 2015 to 27% this year. Consumers ages 35-54 had a reverse trend: 30% moved to non-traditional providers in 2015, down to 24% in 2016.
Read: Industry reacts to robos aligning with advisors
Among Canadians, 23% would consider switching to a branchless bank, which is up eight percentage points from last year. Across North America, 26% of millennials would consider switching to a branchless bank (up three percentage points from last year), and 34% of mass affluent consumers would do so, up 10 percentage points from 2015.
Online channel dominant, but branches still relevant
Today, 21% of Canadian survey respondents use the branch at least weekly, and it remains the second most preferred channel, after online.
By a wide margin, Canadians who use the branch prefer “full service branches,” which include extended office hours and full sales support, over all other formats (64%). However, 19% of millennials prefer “light branches” – highly automated with videoconferencing access to remote specialists.
According to the survey, the vast majority (87%) of Canadian consumers say that they will use the branch in the future. Respondents said they anticipate using the branch two years from now because “I trust my bank more when speaking to someone in person” (50% vs. 48% for U.S.), and “I receive more value from my bank when speaking to someone in person” (49% vs. 47%).
Despite security breaches, customers willing to share data
Sixteen percent of Canadian respondents have experienced at least one incident of their financial data being hacked online over the past two years. Consumers remain willing to share their data in order to receive better service from their bank.
Nearly two-thirds (62%) of Canadian respondents said they would give their banks direct access to personal information, such as mortgage, credit card and student loan data, so their bank can use it to present them with suitable products and services. Respondents want banks to use their data to provide access to lower prices, faster service (such as rapid loan approval), more relevant advice, and personalized offers based on location.