The 2016 Digital Money Trends Report from Ratehub.ca looked at how Canadians interact with products like mortgages, and credit cards. It also examined how Canadians stay loyal to their financial institutions and how they use technology to look for better deals. Here’s what we learned about Canadians’ loyalty to their banks:
Boomers are most loyal to their banks
Not surprisingly, the older you are the more likely you are to stay loyal to the bank you use most when shopping for new financial products. Sixty-nine percent of Canadians 55 and older say they arranged their mortgage with their primary financial institution (compare with just 50% of generation Xers). When we asked about insurance, we saw the same pattern. Sixty-nine percent of boomers used an insurance company they already had a relationship with to take out their most recent policy (compare with just 61% of generation Xers). The only category we asked about that boomers weren’t most loyal was credit cards. Sixty-nine percent of millennials have a credit card from their financial institution, making them the most likely out of any cohort.
Canadians believe there are better rates to be had
When we asked Canadians if they thought their primary financial institution would give them the best rates, the majority said no. But, they still ended up using their main bank to buy new products. For example, 59% said they didn’t think their bank would give them the best rate for a mortgage, but 54% arranged their mortgage through the bank they use most. We’re not sure why people fail to shop around, even when they know there are better rates to be had. But with mortgage rates rising, it’s going to be even more important to look for options rather than taking your bank’s first offer.
Younger people are most likely to use a mortgage broker
How do you save money on a mortgage? At Ratehub.ca, we know it’s by using a mortgage broker. When we asked Canadians whether they used a mortgage broker to arrange their mortgage, millennials were most likely to say yes. Thirty-seven percent of millennials used a mortgage broker, compared to just 30% of generation Xers and 16% of boomers. Seventy-three percent of millennials used comparison websites to research financial products.
Bank accounts stay open a long, long time
When we asked how long people have had their oldest bank account, the numbers showed that once an account is open, it stays open a long time. Even among millennials (age 18-34), we found that 12% have held the same bank account for 20 years or longer. That suggests people are opening bank accounts in childhood and keeping them open indefinitely – meaning young Canadians are essentially inheriting their bank preference from their parents. Boomers aged 55 and over were the most likely to have held an account for 20 years or longer. A whopping 59% of boomers told us their oldest bank account was at least 20 years old.
Find the details about these stats and lots more in the 2016 Digital Money Trends Report. Our blog has other stories about what we learned from the report. Monday, we’ll post our final roundup on what we learned about how Canadians are using financial technology. See you then.