RateHub, a search engine for Canadian mortgage rates that boasts 300,000 monthly users, released its first Digital Money Trends Report. The aim of the report is to take an overall look at how Canadians manage their money by analyzing how they approach mortgages, saving and investing, and credit cards.
The report took data from three sources: thirty-eight thousand Ratehub.ca mortgage rate requests from February 2012 to October 2015, 1,500 Ratehub.ca mortgage user surveys, and a RateHub banking survey of 1,000 Canadians. It also included Google search volume data, and industry information from the Bank of Canada, the Canada Mortgage and Housing Corporation, and Mortgage Professionals Canada as reference for the findings.
The overarching finding of the report is that Canadians are increasingly going online to research their financial decisions before they make them. According to RateHub, Canadians searched for mortgage-related keywords more than 700,000 times a month, and mortgage calculators took the biggest chunk with 487,000 searches.
“In a way, it’s not about creating a market, but a new way to service an existing market.” – Alyssa Furtado, CEO of RateHub
The report also found that the average Canadian has 2.4 credit cards, and one in ten have five or more cards. Canadians searched for credit card networks more than 800,000 times, and there are 158,200 monthly searches for credit card terms containing BMO, 102,500 with TD, 100,700 with RBC, 71,300 with CIBC, and 50,700 with Scotiabank.”
Alyssa Furtado, founder and CEO of RateHub, said that the company approached the report similar to how it built its business, as RateHub uses Google search data to determine the size of its market. “At RateHub we’ve been very focused on search. Google search data has been the foundation of our business model; it’s how we’ve built our traffic to over 300,000 users per month, and it’s been a profitable way to build a business,” said Furtado. “Our customers are those who are looking for an existing service (a mortgage, applying for a credit card, finding the best high-interest savings account, etc). The intent is already there. We’re not building a whole new market.”
Speaking with BetaKit about the report, Furtado makes the distinction between two common types of FinTech startups: those that are creating new markets with their services, and those like RateHub, which are disrupting already-existing services.
“Sometimes it’s difficult to understand the distinction for financial services,” she said. “Take Instagram for example. They created a market for themselves, but they didn’t invent photo sharing. Marketplace lenders like Grow or Borrowell did not create a market for people who want unsecured loans, that already exists, but they have created an alternative place to access loans. RateHub is similarly servicing those people looking for financial products already, but we’ve created a marketplace for rate and product comparisons. In a way, it’s not about creating a market, but a new way to service an existing market. The challenge that many FinTechs face is creating general awareness around a new servicing option.”
However, the company stressed that FinTech startups shouldn’t miss out on opportunities to use search to understand potential markets. According to the report, 66 percent of RateHub users are between the ages of 26-45, and this demographic is more likely to go online first, which means that the size of the search market will grow. “Never before have new companies had such an accurate looking glass into what their potential customers want,” said Kerri-Lynn McAllister, RateHub’s marketing director. “It doesn’t have to be a guessing game, analyzing search data can provide you with an informed foundation for your strategy.”
McAllister adds that the FinTech companies that leverage new consumer financial habits — which see a shift from the bank branch to the computer — will win. “The banks are not going anywhere, but the question is, will they reach customers online or partner with those companies who are? The banks will still exist, but will their branches?”