How Canadian Youth Are Digitally Transforming the Banking Industry
There’s no doubt that today’s youth (defined as ages 16-21) are more digitally inclined than their older peers or predecessors in most aspects of life, from how they go about socializing, shopping, learning and even banking, but how digitized are Canadian youth when it comes to banking? What digital channels do they use? Which platforms have the most influence on their decision-making? These are all critical questions for any financial institution looking to attract, satisfy, and retain younger clients over the long haul.
Since RFI’s mission is to help our clients answer difficult questions to better meet the needs of customers, we’ve been helping our international clients navigate this young and unique client segment through our Youth Banking Council since 2019.
Before we go into how digitized Canadian youth are when it comes to banking, let’s start with why they are such a unique and important customer segment.
There are three main reasons:
1. How digitized are Canadian youth in their day-to-day banking?
Based on our 2022 Canada Youth Banking Study, we found that mobile banking is the number one channel through which Canadian youth conduct their day-to-day banking activities. 94% of youth reported using this method to go about their day-to-day banking.
Not only is mobile banking the most popular method of banking for Canadian youth, but it is also the most frequently used banking channel, with 70% reporting using mobile banking on a daily or weekly basis to conduct their banking activities. That’s significantly higher than the proportion of youth who visit bank branches or use ATMs at the same frequency, as shown in the graph below.
2. What channels do youth use for which activities?
When we asked Canadian youth to identify which channels they use to conduct various banking activities, three key insights surfaced:
So, what does this tell us about how digitized Canadian youth are in their day-to-day banking?
How influential are digital platforms such as social media as sources of financial advice?
When we asked 1,000 Canadian youth where they go for financial advice, a third identified social media as one of their key go-to sources, which puts social media in third place next to friends/family, and just after parents/guardians and family members.
Out of those who have identified social media as a key source of financial advice, 28% reported TikTok and 24% reported YouTube as the social media platform with the strongest influence on their banking and financial decision-making.
So what does this tell us about the influence digital platforms have over youth’s banking decision-making?
How digitized are Canadian youth when it comes to investing?
As for how influential digital tools are in Canadian youth’s investing activities, our latest findings show that 15% of Canadian youth have adopted trading/investment digital tools as an investment medium; Wealthsimple being the most popular investment tool amongst this young segment.
While 15% is not necessarily a major proportion, it nonetheless indicates the clear penetration of digital tools in Canadian youth’s investing world.
Despite digital tools having had a modest impact on how Canadian youth go about making and managing their investments, our findings show that they have had a much bigger impact in terms of what Canadian youth invest in, with digital currencies showing up as the leading asset class Canadian youth invest in, surpassing all other asset classes including mutual funds, stocks, and even ETFs.
So what does this tell us about how digitized Canadian youth are when it comes to investing?
What should financial institutions take away from these findings?
About the Author
George Kawar is the Insights Director at RFI’s Toronto office and oversees the design, roll-out and delivery of consumer-focused syndicated research within the Canadian market. George has over 10-years of research and analysis experience within the fields of finance and technology & innovation and has dedicated his career to supporting the growth of tech startups and financial institutions through market research.