Should Canada’s Banks Partner With Digital Competitors?

Montreal, Canada (July 24, 2024) – For 90% of Canadian banking customers, saving is a top priority, but where they’re placing their money is shifting, according to a new report released today. The Banking Disruption Index from global digital transformation company GFT finds that 57% of consumers still prefer to save their money at traditional banks. Digital challengers like neobanks, however, are catching up with them, with 24% of Canadians saying they prefer to save with these tech-forward options.  

According to GFT’s report, nearly three quarters (74%) of Canadians say they are not actively looking to switch their banking providers. At the same time, they are increasingly gravitating toward digital budgeting apps and other capabilities that they would traditionally rely on banks for. This is especially true of Gen Z and Millennial consumers–56% are already looking to outside technology for budgeting support. 

Consumers Are Still Loyal To Their Banks - But Tech-Powered Experiences Are Shifting the Scales 

As banks work tirelessly to create the data infrastructures necessary to build the tech-driven experiences consumers demand, they have been able to rely on their customers’ loyalty to buy them time. But the growing interest in AI and other technology-driven banking experiences globally is emerging as a strong incentive to stray. 

Other findings from the Canadian Banking Disruption Index include: 

• Easily Accessible Funds Are a Top Priority for Where Consumers Save. Forty-one percent (41%) of consumers consider the ease in which they can reach their money as a large factor when considering where to save their money. With the emergence of AI tools, banks and financial institutions who incorporate automations into capabilities will be better set up to give users the seamless experience they are looking for.  

• Emergencies and Retirement are more Important to Consumers Than Purchases. The main reason that Canadians are actively saving their money is to prepare for unexpected disasters. Forty-seven percent (47%) revealed they are putting most of their saved money to an emergency fund, closely followed by 41% saving money for retirement. 

• Boomers Are Wary of Digital Banking Experiences. While Millenial and Gen Z consumers are continuously adopting more digital options, only 3% of Canadians aged 55 and up expressed interest in more technical saving methods like budgeting apps 

"If banks want to maintain the loyal customers they’ve held for so long, they need to adapt the technologies they demand," said Mauricio Deutsch, Banking and Capital Markets Leader of GFT Canada. 

" In some cases this may even require partnering with digital competition to give consumers the best options."  

GFT surveyed 2,001 Canadian consumers to understand their saving habits and preferences, as well as how technology is influencing their decision of who to bank with beyond savings. It then analyzed its findings to identify areas banks should prioritize to best cater to users, as well as maintain market share.  

The complete Canadian Banking Disruption Index offers an in-depth look at how banks can maintain customers’ loyalty, going beyond saving capabilities and hitting on other AI and technological solutions. The full report is available for download here.