Despite the increasing availability of alternative banking and financial technology as channels for the Canadian consumer to build their wealth and savings over time, the majority of Canadians still bank with one of the so-called Big Five banks: BMO, CIBC, RBC Royal Bank, Scotiabank and TD Canada Trust. All five of these major players are investing in fintech infrastructure at a relatively equivalent rate: the effective gap between fintech service availability from bank to bank has narrowed over time such that each member of the Big Five is now able to offer such incentives as robo-advisorship, cloud-based computing improvements, and partnerships with mobile payments technology developers such as Apple Pay.
Customer satisfaction with the Big Five banks is becoming a narrower race as a result of these changes. Financial technology provisions that improve efficiency and ease of access, rather than in-branch services, are becoming the denominator for satisfaction according to a new report by JD Power.
Fintech, in short, is not just appealing to Canadian financial customers by way of offering more affordable access to financial products. In a mobile-service-devoted population of users, the perceived convenience of a loan or financial product/service is becoming just as important as the outright cost of that product. The caveat for the Big Five is that they must maintain the overhead cost of physical branch operations even as this shift becomes more pronounced.
What do studies like this tell us about the future of fintech development? Certainly some branches of fintech will remain devoted to servicing the customer groups that the Big Five banks are unable to accommodate. However, fintech models are revolutionizing the user experience as well – and firms that create a low-friction, highly rewarding and reactive method of interaction with their customers will be poised for success in the future.