Canada Priority & Retail Banking Report 2020: Understanding the general banking habits of mass market and mass affluent Canadian consumers September 2020

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www.rfigroup.com Copyright Retail Finance Intelligence Limited Commercial in Confidence 4 R F i G R O U P – CANADA PRIORITY & RETAIL BANKING REPORT Contents

1. Research Methodology

2. Market Context

3. Focus area one: Financial and Banking Literacy

4. Focus area two: Impact of COVID-19

5. Market Report • Main financial institution • Priority banking • Investment products • Chequing accounts • Savings accounts • Credit cards • Personal loans • Mortgages • Channels

www.rfigroup.com Copyright RFi Group Holdings Limited Commercial in Confidence 5 R F i G R O U P – CANADA PRIORITY & RETAIL BANKING REPORT Methodology

• Fieldwork for the Canada Priority & Retail Banking council is conducted online bi-annually in the first and second half of the year.

• 2,000 consumers were interviewed in April/May 2020.

• Respondents are representative of the Canadian market by age, gender, region and income. To qualify as ‘banked’ respondents must hold a minimum of one banking product with a financial institution in their local market.

• Respondents form a nationally representative sample which is then boosted to ensure an even split between the Mass Market and Mass Affluent segments. The nationally representative sample has been used wherever the total market is reported. When reporting on the affluent market the boost has been included.

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• Main financial institution / Priority banking • Investment products • Chequing accounts / Savings accounts • Credit cards • Personal loans • Mortgages • Channels

www.rfigroup.com Copyright RFi Group Holdings Limited Commercial in Confidence 7 R F i G R O U P – CANADA PRIORITY & RETAIL BANKING REPORT Main Financial Institution: Advocacy The average Net Promoter Score among all MFIs went down significantly over the past 12 months.

How likely are you to recommend your main financial institution to a friend or colleague? By MFI Detractors (0-6) Passives (7-8) Promoters (9-10) NPS 100% 60

90% 51 50 80% 43% 42% 46 43% 47% 45 53% 51% 49% 48% 47% 70% 63% 59% 60% 41 39 40 60% 36

50% 30 30 38% 29 28 28 37% 40% 24 32% 32% 41% 21 34% 35% 35% 20 30% 34% 29% 25% 26% 20% 10 10% 21% 19% 20% 16% 19% 20% 18% 11% 13% 15% 13% 15% 0% 0 Credit unions National Simplii Tangerine Desjardins RBC Royal BMO Bank of TD Canada CIBC Total (H1 Total (H1 Bank of Financial Bank Montreal Trust 2019) 2020) Canada Base: Retail banking customers (H2 2019: Credit unions: n=35, National : n=63, Tangerine: n=79, Simplii Financial: n=93, Desjardins: n=144, Scotiabank: n=208, RBC Royal Bank: n=335, BMO : n=235, TD Canada Trust: n=406, CIBC: n=244, Total (H1 2019): n=1,550, Total (H1 2020): n=1,550). Tests for significance were carried out on this question.

www.rfigroup.com Copyright RFi Group Holdings Limited Commercial in Confidence 8 R F i G R O U P – CANADA PRIORITY & RETAIL BANKING REPORT Main Financial Institution: Switching Drivers One-in-five customers who switched claimed that they were unhappy with their MFI, driven primarily by their unhappiness with fees/charger and negative customers service experiences.

Why are you considering switching your main banking relationship? 14% customers are Likely to switch (6+/10) - By MFI likely to switch their MFI in the next 12 BMO Bank of Montreal CIBC TD Canada Trust RBC Royal Bank Total months 50% 45% What are you unhappy with? 51% - Customer service 40% 40% - Fees and charges 35% 37% - Rates on savings 30% 25% 22% 21% 20% 20% 20% 15% 12% 11% 10% 8% 8% 5% 0% My personal Another institution I am unhappy with I want access to I opened a deposit Changes on where It is inconvenient I took out a loan circumstances have has offered an my main financial better investment account with my payroll is banking with my product with changed incentive to move institution and wealth another institution deposited main financial another institution my banking there management and moved all of institution and moved all of products and my accounts there my accounts there services

Base: Retail banking customers that intend to switch (6+/10) MFI in the next 12 months (20H1: BMO Bank of Montreal: n=42, CIBC: n=38, TD Canada Trust: n=76, RBC Royal Bank: n=37, Total: n=273) *Small sample size (<30), use indicatively Base: Retail banking customers who are unhappy with their main financial institution (20H1: n=43) Note; Responses add to more than 100% because respondents could select more than 1 option. Note: ↑ - Significantly higher than other segments ↓ - Significantly lower than other segments www.rfigroup.com Copyright RFi Group Holdings Limited Commercial in Confidence 9 R F i G R O U P – CANADA PRIORITY & RETAIL BANKING REPORT Chequing Accounts: Drivers of Satisfaction While customer service is considered as satisfactory, clients would be more satisfied with their chequing account provider if they had lower fees and charges.

KEY Satisfaction with chequing account provider and key drivers of overall Maintain satisfaction Leverage 1 Customer service Chequing account holders 3 2 2 Debit card access

7 3 Online banking services

4 Fees and charges

13 11 1 5 Minimum balance requirement

6

8 6 Phone banking services (Mean (Mean score out of 10) 7 Mobile banking app 9 5

12 8 Overdraft facility attributes 4 9 Access to foreign currencies

10 Interest rates

11 Domestic ATM locations Satisfaction with

Lower priorities 10 Immediate priorities 12 Overseas ATM access

Correlation with overall satisfaction 13 Branch locations Base: Chequing account relationships (H1 2020: 776-1,518). Note: Respondents that selected ‘I don’t know what this feature is’ or ‘this feature is not applicable to my account’ were removed from analysis.

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