Nearly one third of Canadian consumers say they’re less dependent on banks, according to EY’s 2016 Consumer Banking Survey (which polled over 2,000 consumers in Canada).
The survey links consumers’ lack of interest in banks with their increased use of fintech entrants.
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“Nearly 40% of consumers have used non-bank providers in the last 12 months,” says Paul Battista, EY’s Financial Services Advisory Leader. And, “an additional 20%, who haven’t yet used them, plan to [do so] in the near future. In other words, consumers are increasingly open to signing up for financial products with non-bank entities and […] we expect this trend to continue.”
One reason for this is most consumers (77%) already go online first to research a product, while 59% need to speak to someone to get advice.
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So, says Battista, traditional banks and financial professionals need invest in technology as well as customer experience to stay relevant.
One finding that favours banks is that the vast majority (96%) of customers trust such institutions to keep their money safe. However, 19% have little or no trust that banks provide unbiased advice.
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Still, says EY, only 15% of Canadians are both digitally and financially savvy, and that affects how comfortable they are using digital channels. Looking at financial savviness alone, two thirds of respondents say they don’t have sufficient knowledge of financial products and services.
As a result, says EY, banks and financial professionals need to start work on improving customer experience, and on researching the shift in consumer behaviours.
Consider that three of the top four reasons customers would consider using a non-bank relate to customer experience: they care about access to different products, how easy it is to set up accounts, and better online experience and functionality.
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Click here to view EY’s infographic or read the full report.
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