Survey Reveals Internet Is 'Changing The Face' Of Financial Services In Canada

by Amanda Banks, Tax-news.com, London

02 May 2001

According to a report recently released by global market research company Ipsos-Reid, Internet and technology advances are changing the face of financial services in Canada. Increasingly Canadian high net worth investors are turning to the Internet as the communication channel of choice among high net-worth investors for information services, such as account balances and financial reporting, although the preference for a one-to-one with financial advisors to manage their investments is still prevalent.

Commissioned by Optus, a Symcor customer communication business, and backed by Sun Microsystems, the study found that common Internet activities included: collecting information about financial services (67 per cent), checking bank accounts (56 per cent), viewing financial statements (56 per cent), and tracking investment performance (49 per cent). However, only 19 percent have bought or sold investments online and just 9 per cent have applied for loans, mortgages or credit cards over the Internet.

'Clearly, consumer use of the Internet for financial services is no longer a budding trend. The Internet is now entrenched as a highly effective information-gathering tool,' said Jon Hantho, president of Optus. He added: 'Some newer Internet activities have been slower to catch on, but usage will likely grow as consumers become more comfortable with the technology and as more companies offer these services. For organizations who target higher-net-worth investors, creating a strategy that incorporates the Internet to provide differentiation in customer communication is no longer an option, it has become a basic business requirement.'

The study also found that financial institutions have varying Internet services on offer but almost all operate Internet-based communications. Many of the consumers questioned during the study raised concerns that the Internet could 'commoditize' financial products and services and eventually take over from traditional sales channels.

John Wright, senior vice president of Ipsos-Reid, said: 'Interestingly, this view is unsupported by the consumer research findings. Two-thirds of consumers say that expanded use of the Internet to communicate with financial institutions will have no impact on their use of professional financial advisors. And while 11 percent suggest they may use financial advisors less, almost as many (8 per cent) say they will use financial advisors more often.'

In addition to a consumer-based survey comprising 433 high net worth Canadians, Ipsos-Reid also carried out an industry-based survey of 50 executives from top Canadian mutual fund companies, banks, investment advisors and insurance companies. Only a third of the industry professionals questioned anticipate a significant take-up for wireless/mobile-based financial transactions in the next few years. Similarly, expectations for wireless banking and investing among consumers is also low. Only one in 10 of higher-net-worth consumers said they would expect to conduct such transactions in the near future.

'Overall, it's apparent that the Internet and technology have had and will continue to have a positive impact on the [Canadian] financial services industry. Consumers will ultimately benefit in many ways, including 24/7 availability, self-service access, faster communication and personalized value-added services,' concluded Hantho.

Symcor is a Canadian leader in providing business and technology outsourcing services. The company provides individualized product and service solutions in three key business areas - Customer Communication, Item Processing and Card Management - to a broad range of customers in the banking, mutual fund, insurance, retail, telecom and utility industries.

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