Between pandemic-era behaviors and accelerated digital adoption in other parts of their lives, Canadian banks’ customers have evolved dramatically over the past two years. New data from Bain’s NPS Prism® platform reveals a step change in consumer expectations for the banking experience.
Those expectations for digital banking are higher than ever—and extend far beyond simple transactions. Customers are using digital channels for a more complex array of needs and interactions, particularly those that were previously reserved for human channels. For instance, in 2021, 55% of Canada’s banking customers who opened and set up a new account did so digitally, up from 38% in 2020.
This seemingly overnight shift in consumer behavior has disproportionately benefited banks that were digitally enabled before 2020. These winners include digital natives, like Tangerine and Simplii, and traditional banks that invested heavily in digital, like RBC.
While most banks now meet the table stakes of simple digital interactions, such as mobile check deposits or straightforward money transfers, these digital leaders go above and beyond on more involved customer episodes. When opening a new account, for example, Tangerine, Simplii, and RBC customers have higher digital adoption and lower failure rates than competitors’ customers (see Figure 1). This digital excellence contributes to a higher Net Promoter Score℠—a measure of customers’ likelihood to recommend a store or brand—for the episode, and thus, an outsized share of new customers.
Customers aren’t just satisfied with the experience of opening a new account. A seamless digital experience across episodes contributes to more loyalty overall: Tangerine and Simplii have the two highest Net Promoter Scores in Canada (see Figure 2). RBC ranks among the top five banks, making it a best-in-class traditional bank—although it still has some room for improvement to keep up with digital natives.
To catch up with these loyalty leaders, many Canadian banks have made substantial investments over the past two years. TD Canada Trust and CIBC have logged notable gains in their Net Promoter Scores for digital interactions. However, international competitors show that most Canadian banks still can do better. When it comes to key episodes, like opening a new account, Chime in the US, Monzo in the UK, and Nubank in Brazil have even higher rates of digital engagement and lower digital failure rates than Tangerine, Simplii, and RBC (see Figure 3).
Going forward, Canadian banks will need to think critically about customers’ rapidly evolving expectations for the digital experience. The next generation of industry leaders will be those that prioritize improvements to the experiences that matter most to customers.