Just 2 in 5 Canadians trust stores to protect their payment information.

As consumers today rely on technology for everything from reminding them to get up and walk around to applying for a mortgage on the go, the security of personal data is under scrutiny. So much so that new research from Mintel reveals that a mere one in five (22 percent) Canadians agree that businesses do a good job of protecting their customers’ personal information and just two in five (42 percent) trust stores to protect their payment information.

Despite feelings of distrust, however, it seems that some consumers aren’t willing to sacrifice the convenience of paying online for piece of mind as only one quarter (24 percent) of Canadians actually say they feel unsafe about entering their payment information when paying for products online.

“While an overwhelming majority of consumers do not trust businesses to protect their personal information, the truth is that digital payment, such as paying via a smartphone, is actually quite secure. In fact, online transactions are more popular and secure than ever before thanks to advancements in digital payments technology, demographic shifts and the evolving cybersecurity landscape. There is even evidence to suggest that offline payments are just as susceptible to data breaches as online payments,” said Sanjay Sharma, Senior Financial Services Analyst at Mintel. “In an effort to ease fears surrounding data protection, businesses offering online services should consider highlighting the increased security of online payments in order to gain consumer trust.”

32% of Canadian consumers agree that mobile payments are the payment method of the future.

Some consumers may still be wary of cybersecurity, but the everyday act of fumbling through a wallet, grabbing a credit card and punching in a PIN may soon seem outdated. Mintel research reveals nearly one in three (32 percent) Canadian consumers agree that mobile payments are the payment method of the future. Although only one in seven (15 percent) consumers have used mobile payment, seven in 10 (72 percent) say they have not used mobile payment but are aware of it, and three in 10 (29 percent) are interested in using it. Wider availability of mobile payment options may encourage usage as nearly one in six (17 percent) consumers agree they would use mobile payment technology if more stores accepted it.

“Digital payment technologies are changing how, when and where consumers buy and brands sell in an instant. Consumers are gravitating toward apps and platforms that allow them to track their spending and stay on top of where their money is going. The sheer frequency with which Canadians, particularly younger generations, are using these platforms highlights the potential for financial services companies to leverage this as a meaningful touchpoint to connect with their customers and perhaps boost satisfaction and engagement levels,” continued Sharma.

While awareness is high, usage of digital financial products and services remains low. In addition to mobile payments, the digital financial products consumers are most aware of include online investment trading (81 percent), financial rewards apps (70 percent) and cryptocurrency (69 percent). However, when it comes to actually using these products, the numbers remain quite low with less than one in five Canadians saying they have used online investment trading (18 percent) and financial rewards apps (15 percent), and a mere six percent report usage of cryptocurrency. With regard to some of the newer digital financial products and services, the majority of consumers say they haven’t even heard of them, including digital insurance apps (57 percent), robo-advisors and person-to-person lending services (52 percent respectively).

1 in 7 agree that traditional financial institutions will cease to exist in the next 50 years.

Despite slow adoption of digital financial products, Canadians are optimistic about the positive influence of technology on financial services, creating a bright spot for Canada’s FinTech industry. In fact, one in seven (14 percent) agree that traditional financial institutions will cease to exist in the next 50 years. What’s more, 29 percent of consumers overall agree technology will help smaller institutions compete with larger banks, and nearly one quarter (23 percent) believe technology will drive down banking fees and interest rates.

“This digital revolution in financial services has the potential to transform the role of traditional financial institutions, helping them create better, faster and cheaper services that make them an even more essential part of everyday life. As adoption remains low, there is an opportunity for brands to devote more resources to explaining how these products and services work on social media and in marketing collateral at their branches, as well as arranging for more in-person demonstrations to increase interest and awareness, and ultimately usage,” concluded Sharma.

Press copies of Mintel’s Consumer Attitudes towards FinTech Canada 2017 report and interviews with Sanjay Sharma, Senior Financial Services Analyst, are available on request from the press office.

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