CBA – Consumer Information – Technology and Banking: A Survey of Consumer Attitudes

Executive Summary

The percentage of Canadians who bank primarily through the Internet has doubled in the past two years, according to Technology and Banking: A Survey of Consumer Attitudes. The poll also shows Canadians use a variety of means to conduct banking transactions, and expect improvements in banking through technology to continue.

In the survey, conducted nationwide by The Strategic Counsel, 16 per cent of respondents say the Internet is the primary means through which they conduct the majority of their financial transactions, compared with eight per cent in a similar CBA poll two years ago. The new survey also shows approximately one-third (34 per cent) of respondents now do at least some of their banking online.

Not surprisingly, the increase in online transactions is offset by slight decreases among those who do most of their banking through automatic banking machines and by telephone. Those who primarily use ABMs declined from 45 per cent to 40 per cent, while those who say they bank mainly by phone declined slightly from 10 per cent to eight per cent. Meanwhile, the number surveyed who say they bank in person remained constant at 30 per cent.

The poll clearly shows Canadians use a variety of banking services to meet their needs and that they find these services beneficial. For example, 86 per cent of respondents feel debit cards have improved banking for them, while 85 per cent of respondents feel the same way about access to a national network of ABMs. Almost as many (79 per cent) say the ability to conduct transactions over the telephone or on-line has improved banking for them.

Last year, Canada s six largest banks alone spent $3.7 billion on technology more than double the $1.8 billion in annual spending five years ago and a cumulative total of close to $17 billion over the past five years. The survey indicates a large majority of Canadians (88 per cent) expect banks to continue to be technology innovators and to introduce or expand technologies that will improve the banking experience for their customers.

Three out of four Canadians (76 per cent) believe technologies available through their financial institution, including ABMs, telephone and online banking, make their personal banking more convenient. Respondents say these technologies make banking more convenient by saving them time and money (26 per cent), allowing 24 hour-a-day access (39 per cent) to banking services and providing banking services from any location (25 per cent). In addition, 88 per cent of Canadians think future technological advances made by Canada s banks will improve their banking experience even more.

According to the polling results, the trend towards the use of online banking will continue to rise. Of those surveyed, 56 per cent expect to be conducting banking transactions through the Internet within the next two to three years, compared with 46 per cent in 2000.

The survey found that eighteen to 34 year-olds are the highest users of online banking. Twenty-one per cent report that it is their main way of conducting financial transactions. This represents a significant increase over 2000 when 11 per cent of respondents in this age group cited on-line banking as their main way of conducting transactions. But technology is having a greater impact than ever on how a majority of Canadians manage their personal financial affairs. Two-thirds (67 per cent) of survey respondents agree that technology and the Internet are changing the way they manage and conduct their personal financial affairs, up from 55 per cent in 2000.

Technology and Banking: A Survey of Consumer Attitudes confirms Canadians reputation as enthusiastic adopters of electronic banking technology. CBA statistics indicate that more than 85 per cent of retail banking transactions in Canada are now conducted electronically.

In fact, Canadians are world leaders in the use of both debit cards and ABMs. According to the Bank for International Settlements (BIS) Canadians made 54.3 debit card transactions per person in 1999, compared with 44.2 in the Netherlands, 41.3 in France and 27.5 in the USA. BIS figures also show that Canada logged 53.4 ABM transactions per Canadian in 1999, compared to 39.9 in the USA and 35.0 in Sweden.

And according to Interac, Canadians use card-based payments (debit or credit) more than two to one over paper-based payments (cash or cheques). This resulted in over 2.2 billion debit card transactions worth more than $94 billion being processed through the Interac network in 2001. Similarly, there were nearly 1.3 billion ABM transactions logged through the six largest banks in 2001 and over 47 million on-line banking transactions completed in 2000.

In order to meet the needs of consumers who bank electronically, Canada s banks have increased the number of access points for banking services over the last decade. In 2000, Canada had over 151 access points for banking services (including branches, automated banking machines and debit card terminals) per 10,000 people, compared with 72 access points per 10,000 people in 1995 and 6.0 per 10,000 in 1990.

Technology and Banking: A Survey of Consumer Attitudes was carried out between April 25th and May 2nd among a random sampling of 1200 adult Canadians aged 18 and over. A sample of 1200 is considered accurate plus or minus 2.9 percentage points, 19 times out of 20.

July 9, 2002