Banks need to do whatever they can to stay competitive these days. Two months ago it was because mortgage deals were so good that banks wanted to scoop up as many mortgage consumers as they could. Now, it’s because there are much fewer buyers on the market; and so, banks need to desperately try to cling onto what they still can. CIBC has made their second bold move of the year, in trying to do just that.
First CIBC closed FirstLine, their mortgage broker channel, earlier this year. The intent was to stop paying broker commissions, start getting more customers into branches, and pocket more of the money from their own mortgages. And while that may sound like a good strategy, their second quarter of this month showed zero growth – a sign that their plan may not be working. So, now the bank has doubled the amount of locations that are to be open on Sunday, in an attempt to lure more customers in and perhaps show more positive numbers in their next quarterly report.
TD was the first to open on Sundays, and now CIBC will expand the hours in 107 of their branches to also make them available to customers on Sunday. TD is still the leader by far, having 407 branches open on Sunday. Bank of Montreal comes in third, with only 35 branches open on Sunday throughout the country.
But it’s not just a simple matter of picking out some branches, declaring them open on Sunday, and seeing a flood of customers coming into the branch wanting to buy mortgages and other bank products. Careful market research needs to be done, competing banks in the area need to be looked at, as well as how well they’re doing. Banks, when considering making the Sunday expansion, need to also consider whether they can compete in that market – whether or not the customers that are currently there will come into their bank instead of a competitor’s. They also need to make sure that the number of customers that are available will make it worth the operating and payroll expenses it will take to keep the branch open that extra day.
But CIBC is ready.
“From a financial standpoint it makes sense for us,” said Larry Tomei, senior vice president of retail distribution at CIBC. “It’s the folks who are living busy lives during the week and need the time, in particular on Saturdays and Sundays, to come in and have deeper conversations around advice. It’s new immigrants, it’s baby boomers, it’s people who just can’t find the time.”
RBC, Canada’s largest bank, says that they have not opened on Sundays because it doesn’t make good financial sense – for them, or their customers. Instead, they have turned their attention toward mobile banking and online banking.
“While some institutions have narrowly defined convenience and access around branches opening late or on weekends, we believe it is more than that and have taken a different approach to this need,” said a spokesperson at RBC. “For us, convenience and access is about being able to serve our clients through the channel they choose.”
So when it comes to banking, which would you prefer? To walk into an open branch on Sunday and speak to someone? Or to be able to pick up your phone or laptop at any time and log into your account?
