Fintech threat grows as younger Canadians weigh leaving big banks

Canadian banks posted a modest gain in customer satisfaction this year, but the headline number is doing some heavy lifting. Beneath it sits a more uncomfortable finding that younger Canadians are eyeing the exit door at the highest rate in five years, and fintechs are ready to catch them.

The JD Power 2026 Canada Retail Banking Satisfaction Study, released October 15, 2026, found overall satisfaction among Big 5 banking customers rose 3 points on a 1,000-point scale.

RBC Royal Bank ranked highest among the Big 5 for a third consecutive year, with a score of 619. BMO Bank of Montreal and CIBC tied for second, each scoring 611, with TD ranking fourth at 610. Among midsize banks, Tangerine Bank held its top position for a 15th consecutive year, scoring 676, followed by ATB Financial at 650.

The study surveyed 14,038 retail banking customers across two waves, fielded in January–February 2026 and July–August 2026 and while the numbers look stable on the surface, the challenge lies in who is staying and who is reconsidering.

A generation shopping around

Among Gen Z and Gen Y customers of traditional retail banks - generations JD Power defines as those born between 1977 and 2008 - 17 per cent said they probably or definitely plan to switch their primary bank within the next 12 months.

That is the highest such figure recorded in five years. Four of the five leading reasons those younger customers cited for considering a switch relate directly to product economics: fees, interest rates, and promotional offers from competitors.

"Younger customers can be satisfied with their bank and still leave if they see a better opportunity to save money elsewhere," said Paul McAdam, senior director of banking and payments intelligence at JD Power. "When household budgets are tight, a monthly banking fee becomes an expense worth reconsidering. Traditional banks cannot take the next generation's loyalty for granted. They need to give younger Canadians a financial reason to choose them, through competitive rates, reasonable fees and clear evidence that their account delivers value."

For financial advisors and wealth managers in Canada, this dynamic carries real implications. A client base increasingly split between traditional banks and digital-first alternatives creates a more fragmented financial picture that advisors may need to navigate more actively in terms of account consolidation, cash management, and referral relationships.

Wealth Professional has previously covered the growing threat fintechs pose to traditional retail banking relationships and the pressure that creates for incumbents to demonstrate clear value.

AI: trusted for fraud, not for advice

One of the key findings in the 2026 study concerns where Canadians actually want artificial intelligence deployed in their banking experience - and what they do not want it doing.

Fraud prevention and data security topped the list of preferred AI applications at 31 per cent. Helping customers avoid service charges came second at 24 per cent, followed by optimising rewards or benefits at 20 per cent. Using AI for personal financial advice ranked well below those priorities, with just 12 per cent of respondents expressing interest.

The appetite is for AI as a financial safeguard, not as a financial guide. That gap between automation and advice is precisely the space where human advisors retain their clearest competitive advantage.

Understanding how AI is reshaping the broader advice and client relationship landscape is increasingly central to practice management in Canada, as Wealth Professional has reported in covering how Canadian banks are approaching digital advice delivery and the ongoing limitations of automated service tools.

Account benefits going unnoticed

The study also flagged a significant gap in how well banks communicate the value of the products customers already hold. Just over half of traditional bank customers (52 per cent) said they completely understand their chequing account features. More strikingly, 26 per cent said they do not know what benefits their account provides.

That figure is a problem on two fronts. For banks, it represents a retention risk: customers who do not perceive the value of their account are precisely those most likely to respond to a competitor's promotional offer. For advisors whose clients hold bank accounts as part of a broader financial plan, it is a reminder that basic financial literacy gaps persist even among engaged banking customers.

The data on AI awareness reinforces the picture. Only 12 per cent of traditional bank customers said they completely understand how their bank uses AI, and the same proportion said their bank communicates its AI use clearly. Fewer than one in five (17 per cent) are completely comfortable with their bank's use of the technology.

As covered previously in Wealth Professional's reporting on how younger Canadians are reassessing long-standing banking relationships the erosion of passive loyalty among younger cohorts is not new - but the 2026 data suggests the pace is accelerating.

The JD Power 2026 Canada Retail Banking Satisfaction Study is now in its 21st year and measures satisfaction across seven factors: trust; people; account offerings; allowing customers to bank how and when they want; saving time and money; digital channels; and resolving problems or complaints.