Big banks have nothing to fear, but need to learn, from fintech, Salesforce says

Fintech might be among the loudest sectors in a booming industry, but a new Ipsos survey conducted on behalf of Salesforce.com indicates that Canadians aren’t willing to close the books on their bank’s local branches just yet.

According to the survey, which Salesforce released in September, more than 80 per cent of Canadians – millennials and baby boomers alike – have only conducted banking-related business with a major financial institution, while only 24 per cent solely conduct their business online.

Those numbers don’t surprise Maura Drew-Lytle, director of media relations for the Canadian Bankers Association (CBA).

“A big part of what banks offer customers is a sense of trust,” she says. “Some of it’s almost taken for granted – you just know that if you make a payment or transfer it’s going to go through, and that your personal information will be protected.”

She notes that the CBA conducts its own public opinion poll every year, and that according to this year’s survey 84 per cent of Canadians have a favourable impression of Canadian banks in general – a number that rises to 93 per cent when it comes to their bank in particular – while 87 per cent see them as stable and secure.

“Those are very strong numbers that I think demonstrate Canadians trust their banks,” Drew-Lytle says.

However, the survey also discovered that 79 per cent of Canadians conduct at least part of their banking online using a desktop or laptop, and that 64 per cent use a mobile device.

According to Rohit Mahna, Salesforce’s GM of financial services, results like that point to Canada’s leading banks benefitting from the trust Canadians place in them – a trust illustrated by Salesforce’s research as well as the CBA’s – only if they continue to keep up with the current pace of digital disruption, and that fintechs are setting the bar.

“Something we really found in the research was that Canada’s big banks need to adapt – they need to understand what the next generation of disruptors – the fintech firms – are doing, and why they’re doing it,” he says.

Fintechs are far more focused than banks on the customer experience, Mahna says, and customer expectations are fundamentally changing.

“Today’s customers are looking for an AirBNB experience when they work with a bank… and fintech firms are laser-focused on that,” he says. “That’s why they were created, and the large banks are realizing that they need to embrace that if they want to keep their customers.”

Rather than regarding fintechs as disruptors out to take over their market share, banks should regard them as partners, Mahna says.

“Banks have an unbelievable knowledge of products and services, really understand the regulatory landscape, not only in Canada but around the world,” he says. “Fintechs, on the other hand, are innovative, agile… they’re very complementary when you think about it. ”

For her part, Drew-Lytle disagrees with Mahna’s assertion that banks could be in danger of being eclipsed by fintechs if they don’t adopt an innovation mindset; and though she agrees the two sectors should collaborate she notes that the banking industry has never considered fintechs their enemies to begin with.

“Really, when you think about it, banks are the original fintechs,” she says. “Things that seem almost old-fashioned now, like ABMs and online banking, were pretty cutting-edge technologies when they were first introduced.”

Many banks already see fintechs as partners, Drew-Lytle says, with the leading banks frequently acquiring smaller fintechs, or running hubs of their own.

“Banks are always looking for ways to make banking more convenient and accessible for customers while maintaining their safety,” she says, noting that according to the CBA’s most recent survey 75 per cent of Canadians give banks good marks for introducing technology that helps make banking more convenient.

“I think the [Salesforce] survey is good in that it reinforces what our views were, though I think it may be surprising to certain people who didn’t see things that way,” she says. “We think that having fintechs out there is good for consumers, because it A) creates more competition, and B) it spurs innovation.”

Other results from the survey include:

  • Only nine per cent of Canadians rely solely on a person at a financial institution, while only 24 per cent of Canadians (including 27 per cent of millennials and 15 per cent of baby boomers) solely access or manage their finances online;
  • 65 per cent of survey respondents access their finances both online and in person, with 60 per cent reporting a visit to a financial institution’s physical branch in the past month;
  • 77 per cent of respondents feel online banking is part of everyday life, but 74 per cent also believe it’s unlikely that there will be no more bank branches five years from now;
  • 64 per cent of respondents either currently use a mobile device to access or manage their finances or would be willing to do so;
  • Among the 74 per cent of respondents who use apps, 62 per cent had used one to access or manage their finances in the preceding 12 months;
  • When asked why they liked banking online, respondents’ top three answers were, in order, “I can access my account anytime/anywhere” (cited by 79 per cent), “It’s an easier way to pay bills” (cited by 74 per cent), and “It saves me time” (cited by 68 per cent);
  • Women were slightly more likely (49 per cent versus 38 per cent) to have used their mobile devices to access or manage their finances during the preceding year than men.

To conduct the survey, Ipsos polled 1000 Canadians online between July 8 and 14, 2016, in both English and French.

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Eric Emin Wood
Eric Emin Wood
Former editor of ITBusiness.ca turned consultant with public relations firm Porter Novelli. When not writing for the tech industry enjoys photography, movies, travelling, the Oxford comma, and will talk your ear off about animation if you give him an opening.

Featured Story

How the CTO can Maintain Cloud Momentum Across the Enterprise

Embracing cloud is easy for some individuals. But embedding widespread cloud adoption at the enterprise level is...

Related Tech News

Get ITBusiness Delivered

Our experienced team of journalists brings you engaging content targeted to IT professionals and line-of-business executives delivered directly to your inbox.

Featured Tech Jobs