There are a number of areas around the world which attract more than their fair share of expats and Canada is certainly one of them. It seems to be a mixture of a very strong economy, a very attractive lifestyle and a country which is still in the developing stage. As a consequence it seems fair to assume that Canada will become more and more popular amongst expats and a growing variety of banking services will be required.
We recently really ran a poll on the expatforum.com on behalf of Barclays International Banking asking contributors to let us know how they do their banking in their home country. There were a number of participants from the Canadian market and as a consequence we have some interesting results. We will take a look at the basic answers and then expand the argument as to why we are seeing specific trends and specific comments.
Online banking (66.67%)
The debate regarding security and reliability of online banking goes on but there is no doubt that more and more expats are relying upon this particular service. Expats in Canada voted online banking as their number one choice with 66.67% voting in favour of online banking as opposed to 70.39% in the overall poll including all countries. This is not too far away from the average for the overall poll and does somewhat reflect the developing nature of the Canadian broadband market.
It is estimated that broadband connectivity in North America will increase by around 6% in 2012 which should lead to Canadian broadband user figures of around 10.3 million. When you take into account the fact that the vast majority of these users will be centred round some of Canada’s most populated towns and cities we can assume that a number of expats will be included in these figures. Like so many developing countries there is a big difference between the rural areas and the more populated city areas in relation to not only lifestyle but also broadband usage.
While many people will argue that broadband investment should be across the country there is a need to target the more populated areas to increase the return on investment so that further projects can be undertaken. In a perfect world equal amounts of money would be spent across the country but this is not a perfect world and business/investment decisions are made by crunching numbers and potential users. However, while a 6% increase in broadband users in 2012 may not seem excessive it is certainly something to build upon.
In reality the vast majority of expats that move to Canada for the lifestyle or employment opportunities will likely have widespread experience of broadband connectivity in their former homelands. As a consequence not only will many expats automatically expect reliable and secure broadband networks but they will demand this in certain areas. Online banking has grown enormously over the last 10 or 20 years and while a number of the crinkles in the system have yet to be ironed out, great improvements have been made.
Mobile banking (8.33%)
The mobile banking figure is spot on with regards to the average for the overall poll thereby indicating mobile broadband and mobile telephone services are as popular in Canada as anywhere else. While the statement “mobile banking” is fairly broad-based we will assume that it incorporates telephone banking and mobile broadband banking for this particular piece.
Canada is a beautiful country with a beautiful countryside although many of the far-flung areas of Canada are very remote and rural to say the least. The quality, reliability and security of mobile phone services and mobile broadband services in some areas of Canada has been called into question but in reality, as we mentioned above, investment in new technology always begins in the more populated areas and expands outwards. In due course there will be improvements in mobile phone technology and mobile broadband across the country but the speed of change may well slow in some of the more remote areas or indeed alternative measures may be brought in.
Telephone banking is emerging as a definite backup service for the online arena suggesting that more and more expats are happy to use call centres as well as mobile broadband and traditional Internet connectivity. This package brings together a service and a system which should be available 24 hours a day seven days a week and is therefore more than convenient for the vast majority of people. There is nothing worse than banking on one particular service, whether this is traditional Internet connectivity, mobile broadband or telephone call centres without some form of backup.
Local branch banking (16.67%)
The idea of popping down to your local bank to arrange your finances is something which is alien to many expats and many of the worldwide population. There are literally millions upon millions of people who would not even know where their local bank was let alone who the local bank manager or local bank clerks were. However, it does seem that expats in Canada do have a fondness for their local banking community and indeed the 16.67% figure is higher than the 12.22% figure for the overall poll.
Like the vast majority of expat hotspots there is a major European, Asian and American banking presence in Canada with all of the major companies either directly or indirectly represented. As a consequence, the vast majority of expats who move to Canada will at some stage come across a banking institution which looks familiar to them. There are very few countries which are not represented by major banking institutions around the globe and Canada is certainly not one of them.
The idea of online banking may well be foreign to many people but the sad reality is that more and more banks around the world are closing their local branches in favour of telephone banking and online services. The vast majority of major banking institutions will have some form of representation on the major high streets of Canada but some of the more rural banking operations may well disappear or merge together. It is a sad fact for many people that local branch banking is coming to an end in many countries although, as we mentioned above, the days of knowing your bank manager or bank advisers have already long gone.
Other banking services (8.33%)
A number of specific country polls which were part of our overall poll indicated some interest in postal banking with an average of 4.55% of expats using this particular service. However, as with Pakistan, the number of expats using postal banking services in Canada is 0% and something which many people would expect to see.
It is a common misconception that the vast majority of those who still use postal banking services are of an older age because in reality it will depend on a number of factors. Is the Postal Service reliable? Are alternative banking services available? What is the cost of such services? How secure are they?
The vast majority of postal banking services available will incorporate non-time critical applications such as credit card applications and mortgage applications although in other countries of the world the services may be expanded a little. The truth is that there is no reason for these time delays in this day and age with Internet, telephone banking, mobile broadband and other services all available. It is far quicker to e-mail a document, signed and completed, to any banking representative as it is to stick this in the post and await a reply. Indeed in the UK the introduction of e-mail and other communication systems has eaten away at the customer base of the Royal Mail leading to a significant increase in the cost of stamps which will further alienate users. While postal banking services may not disappear completely there is no doubt that many people have no interest whatsoever.
We also gave contributors the chance to give other banking services a mention in our online poll and the main one which materialised from Canadian expats is interaction. We can assume that this means face-to-face banking facilities which go back to local branch services. However, as we touched on above there is a real risk that local bank branches will be reduced in number across the world in the years ahead. Major investment in the online arena has made many local branches uneconomical and a number of banks are literally waiting for the first excuse to close them.
Background to the poll
While the basic figures are very interesting and do show trends amongst different countries and different expats it is also worth looking at the three major issues which customers have in relation to various banking services. These are: –
The issue of security could not be more important in the minds of the vast majority of banking customers who literally depend upon a variety of different banking services. While the main potential issue seems to revolve around the Internet and online banking it is worth pointing out that no one banking service is wholly secure. Banks around the world have invested enormous amounts of money into online security and while there have been lapses in the past there is no doubt that customers need to play their own part as well.
If a bank has invested money in a secure website and online banking service but your system is open to abuse because you have no anti-virus or security software then inadvertently your whole banking service could be compromised. The vast majority of victims would blame their bank for any problems when in reality it is perhaps their own fault. Therefore it is essential that not only do banks play their role in securing online services but also customers play their part as well.
Security of mobile broadband, mobile telephone services and even local branch banking operations must also get a mention. Mobile broadband is not necessary available across the board and is something for the future but mobile telephone services and call centre operators are vital elements of the system. However, like any system these are open to abuse if left to their own devices and users should be aware of fraudulent requests and decline these at the earliest opportunity. There have been issues with regards to mobile broadband services and unsafe networks but so long as your network is password protected you should not have any problems.
No matter what type of service you put in front of a customer the issue of convenience will always play a major role in what they decide to use. Security may well be the major issue but convenience and availability are not too far behind. The most convenient banking service by far is the online banking arena followed by mobile broadband banking, telephone banking and then local branch banking. For expats in Canada there was no mention of postal banking services so we can assume that they are relatively underused in this particular area of the world.
Convenience is a must for many people because of their working hours and the fact that many people may need or want to address their finances at some of the most unsociable times of the day and night. Online banking would be the first one to spring to mind although many banks will have call centres available well into the evening and perhaps through the morning. For many people the idea of walking down to their local bank branch has its attractions although not all customers have this pleasure due to the closure of various banking branches around the world.
You can have the best service in the world, the most information to hand, the most convenient service but if it is not available as and when required this is perhaps the biggest turnoff for customers. The reliability of broadband connectivity is fairly good across some of the larger cities and towns of Canada although it may vary in some of the more rural areas. The reliability of telephone banking is there for all to see because literally you are ringing somebody and talking to them although there have been reliability issues with regards to mobile broadband banking.
Reliability may not be top of the agenda for the vast majority of expats in Canada but there is no doubt that if the service is not available as and when required they will look elsewhere. We all live in a world where every second counts and the pace of change is enormous as is the pace at which we lead our lives. If we have to wait for services to be updated, reconnected or indeed they are continually unavailable then the vast majority of people would become frustrated and look for alternative measures.
A 6% increase in broadband users in Canada in 2012 will bring the figure to around 10.3 million and while growth in this particular area is slower than many other areas of the world it is still worth mentioning. While Pakistan attracted the vast majority of votes for online banking and mobile banking, in Canada the situation is slightly different with online banking and local branch banking by far and away the more popular.
As we have mentioned on numerous occasions, while Canada has some of the most beautiful countryside and some of the most deserted villages and settlements it should be fair to assume that the vast majority of expats will move to the larger cities and towns for employment purposes. As a consequence we should also be safe in the assumption that broadband connectivity and online banking services will be readily available in the larger towns and cities so the figure of 66.67% is a little lower than the average for our poll.
For many people the opportunity to do their banking offshore and at during some of the most unsociable hours of the day or night is something which they crave and indeed many expats will have become accustomed to in their former homelands. The Internet has literally changed the banking arena in a very short space of time and the onward progression of new technologies continues. The Canadian authorities and Internet service providers have invested significant monies into the larger towns and cities and this will slowly but surely spread out into the more rural areas.
Good old-fashioned local branch banking still seems to be alive and kicking in Canada and when you bear in mind the vast majority of European, Asian and American banks will have exposure to Canada you are likely to see some familiar banking outpost. The issue of local bank branches is one which has attracted much criticism over the last few years with more and more banking corporations looking to reduce their bank portfolios in favour of online and telephone banking. The issue of postal banking seems to be relatively non-existent in Canada and this is probably along the lines of what many people would expect.
Online banking has taken the world by storm and slowly but surely security and trust issues are being addressed. The reality is that no one banking service is ever totally reliable and all parties involved need to play their part to reduce the chances of criminal and fraudulent activity as much as possible.