If You’re Canadian You’re Probably Giving Around $2,200-$2,800 To Your Bank

The Slow Bleed

Imagine taking a stack of 280 one hundred dollar bills and lighting them on fire, sounds crazy right?

According to a study by Ratehub, Canadians are being absolutely shelled by the big banks. It’s a slow bleed and can often go unnoticed, but over time these fees average out to $2,200-$2,800 per Canadian citizen, depending on which generation you belong to.

The average millennial has already dished out $760 in banking charges over their lifetime. For boomers, that number grows to $2,200. However, it’s gen-Xers who top the ranking, with a whopping $2,800 paid in banking fees on average so far.

Canadians”aren’t paying attention, and it’s costing them,” said Alex Conde, director of content marketing at Ratehub.

Millennial and boomer survey respondents reported paying around $8 a month in fees, which works out to just under $100 per year. Gen-Xers said they had been paying $13 on average, or almost $160 a year. Ratehub assumed each generation has held a chequing account for a third of their lives to be able to arrive at lifespan price estimates, Conde said.

Millennials are likely more aware of online banking options, while boomers are probably enjoying bank-fee waivers due to higher account balances or using multiple financial products with the same institutions, Conde said.

Nonetheless, the survey found that a large chunk of Canadians, for example millennials, tend to stick with the same primary bank account for a long period of time. Those aged 24 to 38, have held the same chequing account for an average of eight years. For gen-Xers (ages 39-53) the average is 18 years, while boomers (ages 54-74) have held on to the same bank accounts for 23 years typically

We wrote previously about how banks are like religions, people are often born into them.

What’s Up, Fintech?

These huge fees is one reason companies like Mogo (MOGO), ZayZoon, Monzo and Wealthfront just to name a few have really taken off. ZayZoon CEO went on BNN to discuss how his company could have helped the recent government shutdown situation in the US.

The banks are some of the oldest instituions we use today. With loads of regulations in Canada banks have been left in the dust with regards to the tech boom.

Big banks have always acted as middlemen between someone’s wealth and debt, or an investment. Some investors have cut out the bank’s investing platforms and invest through apps like Robinhood and Questrade.

However, while many people do still people buy stocks through an account with a big bank, many of the other features banks offer are being utilized less, partially because the apps and websites that hold them and their information are so poorly designed.

In the 2016 UVIC survey ranking trust among Canadian brands.

TD ranked 98th among 240 brands. Other major banks did not fare much better: RBC was 155th, Scotiabank 94th, Bank of Montreal 86th. CIBC came in at 74th — higher than its competitors, but far behind top-ranked Mountain Equipment Co-op, President’s Choice and Costco. Or, to put it another way, with Colgate coming in 43rd, Canadians trust their toothpaste more than those who handle their money.

The answer to dodging the banks’ monopoly? Embracing fintech.

Mogo is a fintech company who has built a great app that has attracted over 700,000 members. Mogo’s app does what the big banks have not been able to accomplish as of yet, keep users happy. Mogo users have given the app very favourable views, especially when contrasted with RBC and Scotiabank’s reviews as seen above.

 

Mogo app interface

Mogo offers 6 main services:

Canada’s first free credit monitoring solution – knowing your credit score is the first step to being financially fit and can help you on a path to accessing the best credit rates.

MogoProtect – Digital solution designed to help protect you against identity fraud. At $8.99/month, MogoProtect is the lowest cost identity fraud solution in Canada with real time alerts notifying you of hard credit checks on your Equifax bureau through a mobile app.

MogoCard – Control your spending and set your savings goal with Canada’s first digital spending account with a free Mogo Platinum Prepaid Visa® card.

MogoCrypto – Invest in bitcoin through Canada’s first and only mobile solution that allows members to buy and sell through an app without any funding or withdrawal fees.

MogoMortgage – Buy a home and focus on getting mortgage free. Mogo is the only mortgage broker in Canada offering the ability to track your mortgage within a mobile app.

MogoMoney – Access smart credit if you need it. MogoMoney is Canada’s digital loan solution with a “Level-up” program that rewards consumers for consistent payments and Mogo is the only consumer finance company offering the ability to track your loan through a mobile app.

The fintech sector is not a trend and is not determined whether crypto takes over banking, or on the end of the spectrum, becomes irrelevant. The partnership between finance and technology is one that makes a lot of sense and is not going anywhere, Mogo has consistently shown itself to be a consumer favourite through its positive reviews and growing user base

 

Disclaimer: Mogo is a paid client of High Energy Trading, click here to read full disclosure.

High Energy Trading is not a licensed broker-dealer, market maker, investment advisor, or underwriter. All information that we provide is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities

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