Manulife Bank out to poach millennials from the Big Five with targeted digital banking packages
Canada’s biggest banks have a track record of swallowing up competitors – from upstart retail banks such as ING Direct to the Canadian credit card portfolios of U.S. banks including JP Morgan and Citigroup.
But another giant on the domestic financial services landscape, Manulife Financial Corp., is taking aim at the big banks’ customers with the launch of a multi-product banking package by subsidiary Manulife Bank.
After more than 25 years of nipping at the edges of retail banking dominated by Canada’s Big Five banks, Manulife Bank hopes to gain share through a combination of mobile and technology-driven products and the prospect of lower fees.
“If you ask who our target audience is, it is customers who are dealing with the big banks,” Rick Lunny, chief executive of Manulife Bank, told the Financial Post.
He said the primary target of the new bank account, credit card and travel insurance package is the millennial crowd. And one of the features is that a $10 monthly fee will be waived for customers who manage to add $100 or more to their savings that month.
While some research suggests the millennial generation is not interested in dealing with traditional financial institutions, Lunny, who worked for Canadian Imperial Bank of Commercial and Toronto-Dominion Bank earlier in his career, said Manulife’s own research shows that 80 per cent of 22- to 37-year-olds say the big banks are their primary financial institution.
He said Manulife Bank aims to capture customers in this demographic by combining digital and mobile banking – the paperless experience championed by upstart fintech companies – with the backing of the large and stable insurance company.
“We see it as a terrific opportunity there for us to go with our size and depth,” Lunny said, adding that the new package, developed over more than two years, will be backed by a strong marketing push.
For technical and artificial intelligence expertise, Manulife has partnered with four fintech firms — two in Canada, one in New York and one in Singapore, he said.
Most of those products have not been copied by the big banks, so we see a great opportunity … with this new innovative digital banking package.
The pitch is that customers will be able to sign up for four products in four minutes — including an unlimited-transaction bank account, a high-interest savings account, a no-fee cash-back credit card and travel insurance.
While high interest and low fees are traditionally used to compete with the big banks, Lunny said that after conducting market research Manulife opted to waive fees to reward savings.
“We wanted to encourage millennials to save money. They tell us that they need help with saving money,” he said.
The suite of products is a bold move for Manulife Bank, which has made modest waves in the past with such individual products as a combined mortgage and bank account, and a high-interest savings account that allows online and mobile bill payments.
“Most of those products have not been copied by the big banks, so we see a great opportunity here with our existing products, but also with this new innovative digital banking package,” Lunny said.
The bank expanded its retail reach in 2015 by rolling out more than 800 automated banking machines in variety stores across the country.
Published at Sun, 09 Jun 2019 23:00:01 +0000