Survey: Opposition to bank mergers a

(October 9, 2003) Canadian banks are shrouded in myth, leaving Canadians unsure how to proceed with market consolidation in the financial services industry, according to an Environics survey for Cap Gemini Ernst & Young Canada.

The survey reveals that Canadians believe the banks to be giants not only at home, but on a global scale, with 72% believing they were in the top 50 largest financial institutions in the world. In fact, the survey points out only the Royal Bank ranks in the top 50.

This perception might be explained by the size and power of the banks when compared to other Canadian corporations — the big fish in a little pond.

“These false perceptions are myths that need to be challenged by both Canadians and policymakers if we are to end up with a more effective solution to the issues of merger and industry reform this time around,” said Paul Battista, vice-president of financial services for Cap Gemini Ernst & Young Canada.

Harder to explain is the survey’s finding that consumers do not hate their bank, contrary to accepted wisdom.

The survey asked consumers to rate the banks on factors such as trust, service to the community, value, image and innovation. For each category, the banks scored very high.

“This survey challenges the fiction that bank customers are less than pleased with their banks today — and to dispel the myth that mergers would de facto erode rather than enhance the type of service Canadians could expect from their banks tomorrow,” said Battista. “By exploring the findings of this survey, it would not be unreasonable to suggest that the often-mentioned grass roots opposition to bank mergers by Canadians may likely not exist at all.”

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca