More than 50% of Canadian Gen Z and Millennial consumers are turning to apps for financial guidance.

Date – 01-Aug-2024

GFT’s new Banking Disruption Index examines whether Canadian banks should collaborate with digital competitors.

GFT’s New Banking Disruption Index Reveals Shift in Canadian Consumers’ Savings Preferences

A new report from GFT, the global digital transformation company, highlights a notable shift in Canadian consumers’ savings habits. While 90% of Canadians prioritize saving, their preferences for where to save are evolving. According to GFT’s Banking Disruption Index, 57% of consumers still prefer traditional banks for their savings. However, digital challengers like neobanks are gaining ground, with 24% of Canadians opting for these tech-savvy alternatives.

The report also reveals that 74% of Canadians are not actively seeking to switch their banking providers. Nevertheless, there is a growing trend towards digital budgeting apps and other technological solutions previously associated with traditional banks. This shift is particularly pronounced among Gen Z and Millennials, with 56% turning to external tech for budgeting support.

Key Insights from the Banking Disruption Index:

• Accessibility of Funds: For 41% of consumers, easy access to their money is a significant factor in choosing where to save. Banks that integrate AI and automation into their services are better positioned to meet these demands and provide a seamless experience.
• Saving Priorities: Canadians prioritize saving for emergencies and retirement over purchases. Forty-seven percent are focusing on building emergency funds, while 41% are saving for retirement.
• Generational Differences: Digital banking adoption varies by age. Only 3% of Canadians aged 55 and up show interest in digital tools like budgeting apps, in contrast to higher adoption rates among younger generations.

“To retain their loyal customer base, banks must adapt to the technological advancements that consumers are increasingly demanding,” said Mauricio Deutsch, Banking and Capital Markets Leader at GFT Canada. “This may involve partnering with digital competitors to offer the best solutions.”

The Canadian Banking Disruption Index surveyed 2,001 consumers to gauge their saving preferences and the impact of technology on their banking decisions. The full report provides an in-depth analysis of how banks can evolve to meet customer expectations and maintain their market position. The complete report is available for download [here].