The big banks may have more time than they think before their “Uber moment” arrives based on this year’s Digital Money Trends Report, which found that Canadians are still wary of fintech, even as they increasingly search for information about financial products online.
The second annual report released by online financial comparison site RateHub.ca found that Canadians to not place a high level of trust in fintech companies yet, especially compared to their counterparts in the U.S., as there are fewer players here and less awareness. In addition, fintechs in Canada are newer and Canadians tend to have entrenched loyalty to the Big Five banks, unlike the fragmented financial services south of the border.
This year’s Digital Money Trends report examines the role of fintech across personal finance sectors, and how major generational demographics are using technology to manage their finances across millennials (18 to 34), generation Xers (35 to 54) and boomers (55 and up). RateHub.ca surveyed more than 1,000 Canadians from September to November 2016. The report includes RateHub.ca traffic data, and Google search volumes data.
Online banking ranks high in trust among all respondents at 87 per cent, but the newer technologies and methods of managing money have nowhere near that level of comfort level for Canadians. For example, robo-advisors and marketplace lenders only had 11 per cent and eight per cent level of trust, respectively, while comparison websites came in at 44 per cent and contactless payments at 35 per cent.
Both generation Xers and millennials tend to compare financial products online, with 73 per cent of respondents doing so, while 71 per cent looked at online reviews prior to selecting a product. The groups were also more likely to apply for a credit card online – millennials at 47 per cent and generation Xers at 43 per cent, whereas boomers were the only generation that reported to still prefer applying for a new credit card by visiting a bank branch.
An interesting twist to the credit card research, however, is that millennials are the most loyal cohort when it comes to their credit cards: 69 per cent hold a card with their primary bank, even if it is only slightly above boomers at 66 per cent and 59 per cent generation Xers. Boomers are most likely to hold a mortgage with their primary financial institution (69 per cent), while only half of generation Xers and millennials do.
Given that online banking has been around for a while, it’s not surprising that the percentage of respondents accessing online banking using a desktop computer is similar across all ages.
Finally, Digital Money Trends found the divide between generations becomes especially apparent when looking at mobile devices, as millennials are three times more likely than boomers to access online banking using a mobile device.