Manulife wields Amazon Prime, chatbot to battle big banks
Manulife Financial, Canada's largest life insurer, is taking on the country's large lenders with a new package of banking products designed to win over digitally savvy millennials.
The insurer's Manulife Bank has unveiled a banking package with perks aimed at appealing to a younger set: a one-year subscription to Amazon Prime service, a mobile app with artificial-intelligence features such as a chatbot and spending insights, a network of 3,500 bank machines including ones at Circle K stores, and monthly fees waived when savings are increased by C$100 ($75) a month.
"We want to be the best alternative to the big banks and attract millennial customers to help feed Manulife's growth within Canada," Manulife Bank Chief Executive Officer Rick Lunny said in an interview at the insurer's Toronto headquarters. "What this does is attract younger customers to the Manulife brand."
Manulife Bank's All-In Banking Package — which includes an everyday banking account, high-interest savings account, travel insurance and a no-fee, cash-back Visa card, for C$10 a month unless the fee is waived — marks what Lunny calls "a natural evolution" for the company. All the products can be initiated online within four minutes, according to Manulife. Its previous banking products such as mortgages have been sold through financial advisers targeting more "financially mature" clientele, Lunny said.
The move targets younger customers banking with dominant lenders such as Royal Bank of Canada as well as internet banks including Tangerine and Simplii Financial, owned by Bank of Nova Scotia and Canadian Imperial Bank of Commerce, respectively. Lunny estimates that 80% of millennials have their accounts with the big domestic banks.
Manulife, which gets most of its earnings from insurance and wealth-management businesses at home and abroad, has much larger rivals in the banking industry. Manulife Bank had C$25.5 billion of total assets as of March 31, compared with about C$1.4 trillion each at Royal Bank and Toronto-Dominion Bank, the nation's two largest lenders; C$41.3 billion at Tangerine; and C$26.3 billion at Equitable Bank, an digital lender owned by Equitable Group, according to Canada's banking regulator.
Manulife Bank started in 1993 as a branchless lender and the first federally regulated bank opened by an insurance company in Canada. Its products include a high-interest savings and checking account, credit cards and an all-in-one mortgage and banking product.
Canadian banks, alternative lenders and financial-technology firms have been seeking novel ways to woo consumers with mobile offerings and other perks in a mature domestic-banking environment, with most growth coming from stealing rivals' market share.
U.S. banks also are chasing the younger set — with mixed results. JPMorgan Chase is closing its digital-only bank, Finn, a year after rolling out the brand nationally. It found that millennial customers don't necessarily want a separate digital experience.
To build its product, Manulife looked overseas for some of the best examples of digital banking, finding inspiration in Monzo Bank Ltd. in the U.K., N26 in Europe and DBS in Asia, adding the best ideas it found to its own in-house innovations.
"This is a major step forward in the digital evolution of Manulife," Lunny said.