The Canadian Imperial Bank of Commerce expects the massive shift to digital and virtual banking to continue after the coronavirus pandemic subsides and even extends to the bottom line – and often relationship-based – mortgage business.
While routine transactions have been relocated out of stores for years, the pandemic has accelerated the trend. CIBC saw digital transaction volume grow 42 percent from two years ago, and around 92 percent of its transactions are digital. It now has more than 3 million active mobile users, up 23 percent.
Laura Dottori-Attanasio, who heads CIBC’s private and commercial banking in Canada, said these customers are unlikely to be returning to branches after the pandemic. Experience may have made them more open to virtual formats for products like mortgages, which they think are one of the bank’s least digitized offerings.
Adjusting its own budget to the pandemic shows the challenges and opportunities that CIBC will face in meeting customer preferences, she said. While distance learning has shown her how much her children can benefit from in-person tuition at school, she has also seen some online tutoring sessions work well and save hours of driving.
« Banking is no different in some ways, » said Dottori-Attanasio in an interview. “We find out what we want to do remotely or digitally versus in person. For customers, we try to be contextually relevant to them and to serve them as they would like to be served. ”
We try to be contextually relevant to them and to serve them as they would like to be served
Even with more business done online, Dottori-Attanasio does not see any major store closures as the company carried out a major overhaul of its network before the pandemic.
CIBC closed 101 banking centers in four years including the 2019 financial year and closed two more in the last financial year. It now has 1. 022.
The bank has also converted around 20 percent of its locations into « advice centers » that focus on more specialized services than traditional cashiers. The total number of branches could continue to decline, but not at a « dramatic » rate as all of the bank’s locations are currently profitable, she said.
Next year, customers with cash on hand due to economic uncertainties could release some pent-up spending, especially in the services sector, as the pandemic subsides and the economy strengthens, she said.
In 2021, more buyers are likely to seek larger suburban apartments and the downtown Toronto condominium market will remain weak, she said.
CIBC investors will look for further improvements in the bank’s mortgage business. The company was about $ 221. Residential real estate mortgages of € 2 billion. USD (173 billion. USD) at the end of the last fiscal year, an increase of 6 percent over the previous year.
CIBC shares are up 3. 6 percent this year, the best performance in the S&P / TSX Commercial Banks Index. The eight company index is down 1. 7 percent this year.
Despite early successes, Attanasio-Dottori sees more work before the mortgage business reaches its potential. The company has strengthened its sales force to attract new customers and deepen relationships with them, she said. The goal is to keep these customers when their home loans come up for renewal.
« This is one that time will tell, » she said. « I hope we can show it and not talk about it. ”
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Canadian Imperial Commercial Bank, Mortgage Loans, Coronavirus
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