This study of online banking shows Canadas' credit unions and challengers have work to do

I'm a big fan of primary research that pits challenger banks and credit unions head-to-head against Canada's Big 6 players. After all, that's how consumers view the market. So I was particularly pleased to see a study released this week called Best online banks and credit unions in Canada for 2024, on Moneysense.ca. The study was performed by Glenn LaCoste at Serviscor, and it's well worth a read. 

TL;DR

Serviscor assessed the online and mobile banking options across criteria ranging from desktop and mobile experience, service experience and fees experience. While one might assume that nimble digital-only banks wipe the floor of the lumbering Big 6, this is not the case.

TD, CIBC and RBC finished highest, with strong showings across the board on desktop experience, decent mobile experience and good rates. Desjardins, National, Scotia and BMO follow behind, mainly due to less complex digital offerings and weaker online rates.

After this comes the credit unions and challenger banks. Surprisingly, digital-only offerings such as Tangerine, Simplii and EQ Bank lag far behind. These brands are docked for their more streamlined and less fulsome digital offerings. (PC Financial, the lowest performer, shows a 0 for their mobile experience. This may need to be corrected).

Credit unions are recognized for their service, particularly Assiniboine and Conexus' best-in-class digital response times. However, in general their offerings fall short of the big banks. 

Key take-aways

This study ranks each financial institution's digital offerings against the ideal of a one-stop full service banking experience. Despite managing significant tech debt, the Big Six banks clearly excel in this area. This is mainly due to throwing immense resources at the problem, often to the tune of hundreds of millions of dollars each year.

The study also focuses on retail vs SMB or commercial banking. I can attest to the fact that some of the Big Six remain atrocious in these areas. Wealth management and insurance are also not studied, where some new entrants are performing strongly.

Some challenger banks and credit unions are also focused on niche areas. They don't want to create a big bank experience, which means they aren't looking to maximize their scores in this type of study. Finally, individual users were not surveyed. That comes with its own insights and challenges, particularly as many users won't have experience with multiple platforms.

There's a healthy debate about how much digital is "good enough". Will the best digital platform attract business? Can a strong digital offering stop customers from leaving? What's going to happen when open banking becomes a reality?

That said, this study is a good stab at comparing financial institution digital offerings. I particularly appreciate that some of the data is available for download and review. Financial institutions can use this to understand where they stand relative to the competition, and where they should consider investing in their platforms.

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​Methodology used

Serviscor based its ratings on a review of "hundreds of typical user tasks on each individual digital platform", plus rates & fees across five products and service interactions throughout 2023. The top firm in each category received a 10 with subsequent finishers receiving one point less, down to 1 point for 10th place (details here).

I would note that while there's nothing wrong with this scoring method, it does tend to exxagerate the difference between top finishers and less-mature competitors. A bank scoring 25 is not necessarily half as strong as a bank scoring 50.

​Please note that I was not personally involved in this study.

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​Have feedback, or would like to discuss the future of digital at challenger banks and credit unions? Contact me on LinkedIn or via email.