Canadians prioritize financial resilience but which bank helps most?

Index reports how households are coping with the pandemic impact and how they believe their FI is supporting them

Canadians prioritize financial resilience but which bank helps most?
Steve Randall

This year has reinforced the importance of maintaining financial resilience for Canadian households.

And as they bolster their defences, more than half now have new or improved expectation that their financial institution has their back.

The October 2020 edition of the Seymour Financial Resilience Index TM, a new measure that was launched in May this year, shows that there is some work to do to build the financial resilience that is recognized as crucial.

Just 28% of households said that they are already financially resilient but with a mean financial resilience score above 54 nationally, most households are “approaching resilience” according to the index.

More than three quarters of households reported having excellent, very good or good credit scores in October, but only 36% of these are “financially resilient”.

Despite government support programs, 340,000 households said they were “financially vulnerable” between June and October, and there were 700,000 more households reporting as “extremely vulnerable” in this period. These two segments combined represent 10.64 million adults. 

How FIs are helping
As well as tracking how Canadian families are coping with their finances, the index also looks at the extent to which they feel well supported by their financial institutions (FIs).

Among those who said they are financially resilient, 54% of respondents rate their primary FI highly for helping to improve their financial wellness (as of October 2020) compared to less than three in ten of those whose finances are “vulnerable” or “extremely vulnerable”.

Of the major Canadian banks, BMO is ranked top with 7 out of 10 respondents (where BMO is the primary FI) saying it had helped to improve their financial wellness as of October, compared to 37% for CIBC, 36% for TD, 35% for RBC and 34% for Scotiabank.

Eloise Duncan, CEO and founder of Seymour Management Consulting, said that measuring how FIs are helping customers is a key part of the index along with tracking Canadians’ financial wellness.

"We wanted to help build accountability within the financial industry for banks, credit unions and others to help improve the financial well-being of their customers throughout their lives,” she said. “With the COVID-19 pandemic and increased financial hardship and vulnerability a persistent issue, this is more important than ever."