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Canadian Banks target new Canadians


 Canadian banks are beginning to appreciate that traditional marketing approaches targetted at the mass markets effectively miss the most important part of marketing – achieving sales results.

The trend of pursuing customers in specific ethnic groups may in fact be part of a wider shift in the banking industry away from traditional mass-marketing campaigns

Source: Canadian Banks & Insurance

As we have discussed ad nauseam, old style marketing is dead.  One aspect of new marketing is understanding your audience which requires detailed market segmentation, and behavioural understanding.

Canada’s big banks have no doubt taken notice of the success of ING Canada, which is focused on the mortgage market, and Capital One, which concentrates on marketing its credit card.

Mr. Murray says that’s a smart marketing move by the banks. “Banks are realizing there’s not just wealthy people and everybody else,” he says. “There are a lot of other ways to segment the market.”

But new Canadians, are not just another demographic.  There are new things to learn, and the competition from foreign banks is fierce.

Despite their potential, ethnic markets still present plenty of challenges. Outside the ranks of Canada’s big banks, others with longer and stronger ties to ethnic groups have spotted the opportunity, too. For instance, global banking giant HSBC’s Canadian subsidiary has profited from its high recognition within the Chinese community, while India’s ICICI Bank has also made inroads into Canada.

But the challenge is an essential one to understand and beat. 

They would be foolish not to. Retail banking is a mature industry in Canada with little opportunity to gain market share. Sustained immigration represents a rare growth opportunity that could give banks hundreds of thousands of new customers each year.

Relevance to Bankwatch:

Globalisation is passe, but real.  Every country has every nationality within, and they are a large enough group to be close to dominating the marketspace.

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Written by Colin Henderson

September 10, 2006 at 22:37

Canadian Banks analysts summarise 3rd quarter


Now that the 3rd quarter is over a thread of positiveness for at least three banks, seems to have attached to the Canadian Banks. 

Here is a summary of the analysts forecasts relative to previous analyst guidance.  These are the summary of the analysts opinions on their changes to Bank price targets, which they review each quarter.

For details, visit Canadian Banks & Insurance.

Bank of Montreal – increase of around $2 – 5 to $70 / 72

Bank of Nova Scotia – no change at $49 – $54

CIBC – no change /increase $2 to $87 – $96

National Bank of Canada – Reduced $1 to increase $1 to $67.50 – $71

Royal Bank of Canada – no change / increase $2 to $52 – $55

Toronto-Dominion Bank – no change / increase $1 to $70 – $75

 

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Written by Colin Henderson

September 8, 2006 at 08:20

Posted in Profitability

Canadian Banks get smarter about branding


 Royal Bank of Canada (RBC) lead the pack but amongst banks, TD & BMO are catching up. This from Interbrand’s list of Canada’s top 25 brands.

RBC is at an advantage, Mr. Torrance said, because the bank has been using the same brand positioning for decades. Its position as the most blue-suited of the banks also helps because it can be applied to both retail and corporate banking, he said.

Jeff Swystun, global director for Interbrand, says Canada’s top three banking brands — RBC, TD (No. 2 on the list of Canada’s top brands) and Bank of Montreal (No. 7) — have become much more sophisticated in their branding over the last five years.

Source: Canadian Banks & Insurance

Other Canadians banks are mentioned on the opposite end of the scale.

Bank of Nova Scotia and Canadian Imperial Bank of Commerce, on the other hand, are singled out for doing a poor job of defining their brands.

And here is the complete scorecard:

Rank Brand Value C$ (millions)
1 RBC 3,989.6
2 Toronto-Dominion Bank 3,167.9
3 Petro-Canada 3,064.0
4 Bell Canada 2,914.9
5 Shoppers Drug Mart 2,830.6
6 Tim Hortons 1,878.2
7 Bank of Montreal 1,854.6
8 Canadian Tire 1,634.2
9 Scotiabank 1,378.7
10 Telus 1,079.3
11 Molson 860.9
12 Husky 831.0
13 CIBC 727.8
14 Rona 668.9
15 Investors Group 313.2
16 National Bank of Canada 298.5
17 CI Investments 289.0
18 Rogers 288.4
19 Mackenzie 199.7
20 Jean Coutu 131.6
21 Macs/ Couche-Tard 128.4
22 Labatt 107.4
23 Loblaw 107.0
24 Sobeys 79.6
25 Suncor 51.3

Source: Interbrand

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Written by Colin Henderson

September 4, 2006 at 21:54

Posted in Marketing

"Canadian Banks – record earnings: runaway Canadian economy – favourable demographics; time to re-engineer! "


 This is a tough problem to have.  Lots of cash, and seemingly buoyant customer economics suggesting more profit growth. 

“Yet here we are in 2006 and the banks look stronger than ever, — ageing Baby Boomers and a lot of enthusiastic immigrants.

“There’s a good steady wind in the sails of the industry,” says Robert Pearce, president and chief executive of personal and commercial clients at Bank of Montreal. That steady wind will only get stronger with favourable demographics, he adds.”

Source: “Canadian Banks & Insurance – Mozilla Firefox”

The baby boomer wealth transfer has been long predicted for the last 20 years, and now its coming through big time.  Bank are in a great position to take advantage.

Its good timing to review some of the core activities that have been covered here recently.  This is precisely the time to invest in strategies for the future, that fit with the reality that is upon us, yet its not clear Banks’ are doing so. 

Some obvious activities:

  1. automate lending activities:  the demographic shifts require less need for lending, and combined with the commoditisation of mortgages, indicate cost elimination in this sector is essential. (nice tie in to yesterdays debate, which began here and continued here with James)
  2. automate all branch transactions for self service. Examples are passbooks, statements, cheque images, complete bill payment capability including bill presentment, interactive financial messages (account alerts), CRM fully integrating online and branch, online and ATM sales referrals, online account opening.
  3. re-engineer the call centre. Answering the phone is a waste of time for 90% of todays calls, and all we do is irritate customers.  Call centres should be focussed on sales, and levering  click to talk and here.
  4. re-engineer branch design.  Future branches don’t need vaults, and tellers.  But that’s not an overnight shift. 

What is not in the list >>>  more branches.  We don’t need that, at least not yet.   We may require more ‘feet on the street’ but lets understand branch design, and capabilities of current physical networks first.

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Written by Colin Henderson

August 27, 2006 at 22:10

Mortgages are reduced to door openers for Canadian banks


The commoditisation of mortgages until they are reduced to the banking equivalent of selling milk at the grocery store continues. They are low profit products that serve as introductions.  Mortgages are commodities to get customers in the door. 

This detailed analysis of the banks’ 3rd quarter expected results is illuminiating with regard to mortgages and the profitability pressures felt by the Canadian banks.

Canadian Banks & Insurance: BMO CM Preview of Cdn Banks Q3 2006 Earnings

New mortgages continue to be originated at tighter margins than a year earlier. There is little doubt that the residential mortgage business has been commoditized even further over the past year. Banks view this product simply as a way to get into the consumer pocketbook and to anchor the relationship.

However, there are several factors that are working in support of margins:

Faster commercial loan growth.

Less competitive posted pricing in residential mortgages. Bank of Montreal has been the most aggressive bank in discounting …  anecdotal evidence suggests that discounting by BMO off of these higher posted rates has also been reduced.

Less competition from ING in high-interest savings accounts. … declining profitability at ING Bank (not the Property and Casualty insurer) has caused a more cautious stance on pricing

This is a non-sustainable approach for banks.  Milk works as a loss leader for groceries because its cheap.  Mortgages are not cheap.  Mortgages involve the largest investment of capital of any bank product due to their size.  Banks need a better door opener.  Mortgages have become the door opener, becuase its easy for branches.  It was never a deliberate strategy.

Relevance to Bankwatch:
The loss leader concept may not be viable for banks.  The large amount of capital involved in funding mortgages means the funding requirements are not like milk even though they are now being used that way in the branches.
cc

Written by Colin Henderson

August 12, 2006 at 23:13

Ranking Canadian Banks’ Cross-Sell Potential – Forrester May 2005


Many Canadians will consider their bank for additional deposit, credit, and investment products, but not all banks’ cross-sell opportunities are created equal. Scotiabank leads the large Canadian banks in cross-sell potential. Higher customer advocacy scores from their customers help distinguish the leaders. To improve advocacy ratings and their cross-sell success, Canadian banks should make operational improvements (especially with cross-channel interactions) and revamp their sales approaches.

Read the rest of this entry »

Written by Colin Henderson

February 9, 2006 at 13:37

Posted in Canada, Online Banking

Canadian Banks – Keynote ranking July 2004


July 2004 rankings for Canada – ranking discontinued for Canada since then.

Rank Firm Score
2 Royal Bank 7.65
4 TD Canada Trust 7.40
6 Desjardins 6.98
8 National Bank of Canada 6.43
10 Citizens Bank of Canada 6.16
12 HSBC Bank 6.12
14 Laurentian Bank 5.04

Read the rest of this entry »

Written by Colin Henderson

February 9, 2006 at 13:26

Posted in Canada, Online Banking

Canadian Banks

Written by Colin Henderson

January 29, 2006 at 01:38

Posted in Canada

World Safest Banks are European, Canadian and Australian


The worlds safest banks are European, Canadian and Australian.

WORLD’S 50 SAFEST BANKS 2009 | Global Finance Magazine

New York, August 25, 2009 — With bank stability still high on corporate and investor agendas,Global Finance publishes its 18th annual list of the world’s safest banks. After two tumultuous years that saw many of the world’s most respected banks drop out of the top-50 safest banks list, the dust appears to be settling. Those banks that kept an iron grip on their risk exposure before the financial crisis blew up have consistently topped the table and maintain their standing among the top echelon in this year’s ranking. At the same time, the big name banks that lost their safest bank ranking during the credit crunch are still absent from the list as they struggle to rebuild their credit standing. The “World’s 50 Safest Banks” 2009 were selected through a comparison of the long-term credit ratings and total assets of the 500 largest banks around the world. Ratings from Moody’s, Standard & Poor’s and Fitch were used. Global Finance has published its “World’s Safest Banks” listing for 18 years and this ranking has become a recognized and trusted standard of creditworthiness for the entire financial world. “It’s been a bumpy two years for the rating agencies and many of the banks they evaluate,”says Global Finance publisher Joseph D. Giarraputo. “More than ever customers all around the world are viewing long term creditworthiness as the key feature of the banks with which they do business.”

Written by Colin Henderson

August 30, 2009 at 22:22

Posted in Uncategorized

Tagged with , ,

US Banks payments jump from days of the Beatles all the way to 2005’ish for rest of the world


For non Americans the significance that it took the President to sign an Executive Order is large. An Executive Order is required for either inconsequential items, but more often those which cannot otherwise be agreed upon by the legislative Congress who are generally governed by lobby groups, and therefore cannot make a decision.

US Banks have been stuck in the past and refusing to buy into Chip Cards. They have even been balking at PIN rather than signature. This is the country with Miles and Gallons of course. Most wanted to stick with Chip and Signature, as indicated in this recent Forbes article, which to the rest of us is nonsensical.

So the President fell on the side of common sense, and pushed through what the banks deep inside know they actually want. This really only brings them to Europe and Canada in 2005’ish, but its a good step. Not sure how they will feel about Apple Pay which hits tomorrow (Oct 20th) but thats for another day.

Obama signs chip and PIN executive order

US president Barack Obama has signed an executive order mandating the use of chip and PIN technology at executive departments and agencies for card payments.

The president called on the private sector to up its game, commending those that have taken action, including breach victims Target and Home Depot, who are now rolling out chip and PIN. Earlier today, a trade body set up to push the migration from magstripes, estimated that nearly half of US merchant terminals will accept EMV chip card payments by the end of next year.

As Mathew Shay of NRF indicated, the current credit card technology in US dates back to the days of the Beatles. It also drives the matter that kills me where Canadian Banks insist on having a mag stripe on a chip card. The only reason is because we are beside America and the Marketing folks can’t get there mind around not having american access when Canadians shop across the border.

Why is credit card data so easy to steal?

Because the technology designed to keep consumers’ confidential information secure was developed at the same time the Beatles arrived in America, says Matthew Shay, CEO of the National Retail Federation.

“We’re using essentially an 8-track tape from the 1960s,” Shay said in an interview on CNBC in January.

For once, I will say, go Obama!

Written by Colin Henderson

October 20, 2014 at 00:18

Posted in Uncategorized

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