Financial Consumer Agency of Canada (FCAC)

1. Financial Consumer Agency of Canada (FCAC) Presented by: Martin Champoux Marketing Manager

2. Who we are: • Federal government agency that: • Helps protect consumers’ rights by ensuring that federally regulated financial institutions (FRFEs) follow the consumer protection measures set out in federal laws and regulations; and • Promote consumer awareness and foster understanding: • Financial products and related issues • Financial institutions’ obligations to consumers • Consumer rights and responsibilities • Obligations of payment network operators to consumers and merchants

3. FCAC’s initiatives • Over the last 5 years, focus has been on the following suite of products: • Mortgages • Budgeting and money management • Creditcards

4. How we utilized Environics • FCAC utilized Environics expertise to provide us with segmentations studies identifying and classifying the following statistics: • Demographics • Habits • Lifestyle trends • Advertising perceptions

5. Mortgage Segmentation Study • FCAC’s requirement was to understand who the following types of Mortgagees were: • First-time Home Buyers • Renewers & Renegotiators Results • Allowed FCAC to focus its advertising based on the research resulting in the following outcomes: • 20% increase in web traffic • 30% in use of our mortgage tools

6. Credit Card and High Debt Segmentation Study • FCAC’s requirement was to identify and personify segments of the population that have higher debt disposable income ratios in order to find them and understand how to communicate with them in a meaningful way. Results • Allowed FCAC to focus its advertising based on the research resulting in the following outcomes: • 200% increase in web visits in target area • Lowest CPV to date for FCAC

7. Next For FCAC • Focus on the followingtarget audiences: • Newcomers • UrbanAboriginals • Most-vulnerable

8. New Canadians & Urban Aboriginals Segmentation Study • Our requirement was to understand who the largest newcomer and urban aboriginal groups are. • Better understand their media preferences in order to reach these populations with relevant messaging to their financial needs.

9. New Canadians & Urban Aboriginals Segmentation Study • Top 3 Countries that represent over 30% of all new immigrants • Philippines • China • India • Currently analysing Target group imaging • Media (TV,Radio,Social Media….) • Geographic area

10. Questions ?

11. mapping financial vulnerability Rupen Seoni Vice-President and Practice Leader 416.969.2837 rupen.seoni@environicsanalytics.ca

12. BACKGROUNDWealthScapes

13. BACKGROUNDWealthScapes $439,268 $325,334 $278,459 London, ON: Average Stock Balance ($ per HH) Home Values

14. BACKGROUNDWealthScapes Provides product holdershipand aggregate balances so you can: Calculate dollars per household and per holder Determine market share and wallet share Locate and learn about geographic “hotspots” Measure sales potential for financial products

15. Financial Vulnerability Financial Vulnerability

16. FINANCIAL VULNERABILITYDefinition Debt to Income Ratios Using WealthScapes, Environics Analytics (EA) created debt profiles of the following four ratios: PRIZMC2 Debt Profiles Profiles for each type of debt were created by comparing neighbourhoods whose debt to income ratio were in the top 20% in terms of debt ratio (herein high debt), to all households that contained that particular type of debt. These profiles were created for both dollar balance and incidence (# of households) for each type of debt. Mortgage Balance Credit Card Balance Personal Loan Balance Line of Credit Balance to Disposable Income

17. FINANCIAL VULNERABILITYOverview • Areas of High Debt • Atlantic Canada - credit cards • Quebec - personal loans • Ontario – credit card, mortgage and lines of credit • Manitoba and Saskatchewan - high debt households are less common • Alberta – mortgage and lines of credit • British Columbia – mortgage, credit card and lines of credit

18. DEBT SEGMENTATIONSelection Criteria EA used WealthScapes to identify the debt holding patterns of high debt neighbourhoods Higher debt risk was assumed for neighbourhoods that had overlapping debt, i.e. these neighbourhoods held more than one high debt to income ratio Line of Credit Mortgage Personal Loan Debt Credit Card

19. DEBT SEGMENTATIONSelection Criteria Six segments were identified: High Risk – with Mortgage High Risk – with no Mortgage Potentially Less Risk Credit Card Risk Mortgage Not at Risk

20. Personifying Debt

21. BACKGROUNDPRIZMC2 Segmentation Captures: Socioeconomic status Ethnic diversity Urbanity Behaviours Attitudes/mindsets Classifies all Canadians into 1 of 66 groups based demographics, behaviours and attitudes 1st Canadian segmentation to use Social Values data to explain consumer behaviour Allows marketers to tailor communications to their target market Includes 15 Francophone neighbourhood types

22. BACKGROUNDPRIZMC2Segmentation Attitudes and consumption are still consistent across Canada “When I think about my life, I may not be getting ahead financially but I feel that I am making progress on a personal level ” “It’s acceptable that an industrial society such as ours produces some pollution ” Shop at Costco Watch Super Channel Read Reader’s Digest Jeeps and Pickup Trucks Buy Mexican dinner kits

23. EXAMPLE SEGMENTHigh Risk w/o Mortgage

24. EXAMPLE SEGMENTYoung Urban Singles & Couples 281,419 Target Segment households 25% of High Risk Excluding Mortgage households (1,139,657)* 3% of Canada excluding Quebec households (10,384,886)* Segment Highlights • Educated • Apartment dwellers • Internet users • Risk takers * Canada excluding Quebec - Benchmark

25. Demographic Overview EXAMPLE SEGMENTDemographics Young Urban Singles & Couples households are small and mainly non-family. Heads of households are young, single and range in age from their twenties to early forties. More don’t have children than do, and of those who do, their kids are very young. This group is composed of renters, in older apartment buildings that were built between 1960 and 1970. They are highly educated, and their lower than average household income may be a function of their small household size. This group is present in the labour market where they gravitate towards occupations in business, finance, administration, and sales & service. These city dwellers are less likely to be found in cars, and are more likely to commute by taking public transit, walking or bicycling. This group has a very strong ethnic presence, with an immigrant population 28% above the average and a strong presence of visible minorities. Age of Household Maintainer Rent or Own Snapshot Demographics Lifestage: Young; 49% single (never married); 33% under the age of 35 HH Size: Small; 49% one person households; 59% non family type Housing Type:72% rent vs 28% Canada excluding Quebec Education: 38% university, 16% college, 40% high school or less Job Type: 4%art/culture/recreation/sport, 6% sciences, 8% social science/education/government/religion Commuting:25% public transit, 19% walking, 3% biking Diversity:31% immigrant population compared to 24% for Canada excluding Quebec; 30% visible minority vs21% Canada excluding Quebec - Chinese, Black Mother Tongue: 32% neither English nor French as a first language Average HH Income: 29% below average at $62,635 vs $88,715 for Canada excluding Quebec Less Income ($62,635) Non-official Mother Tongue (32%) Housing Type Renters (72%) Public Transit Users (25%) हिन्दुस्तानी 漢 ⅓ 漢 Unmarried (49%) University Educated (38%) * Canada excluding Quebec - Benchmark Source: PRIZMC2; 2011 DEP Down designed by John Chapman from The Noun Project Person designed by DysSahagun from The Noun Project

26. EXAMPLE SEGMENTSocial Values Canada Average 100 Below average Above average Top 2 STRONG – Top 5 Sexual Permissiveness Young Urban Singles & Couples have a tendency to be open minded about their sexuality and often disregard the social norms on topics like premarital sex. Importance of Aesthetics It’s ‘Fashion over function’ for Young Urban Singles & Couples. They perceive the aesthetics of their possessions as a way to express themselves. Need for Escape Members of this group feel a need to regularly escape the stress and responsibility of everyday life. Penchant for Risk-Taking Young Urban Singles & Couples take risks for the emotional high and thrill of doing so. ConsumptivityYoung Urban Singles & Couples are enthusiastic about purchasing products and services in their specific areas of interest. They often read books and magazines to stay up to date with the current trends in these areas. Bottom 2 HIGH Other Relevant Values Sexual Permissiveness Importance of Aesthetics Need for Escape WEAK – Bottom 5 Attraction to Nature Though conscious of the environment, the Young Urban Singles & Couples are not necessarily attracted to nature, or any ‘simple life’ there. Concern for Appearance Young Urban Singles & Couples are not concerned with their personal appearance, they are not image-driven. Utilitarian Consumerism Usefulness is not as important as aesthetics for Young Urban Singles & Couples when making purchasing decisions. Ethical Consumerism Young Urban Singles & Couples tend not to consider the ethical nature of a company when making purchases. Saving on Principle The Young Urban Singles & Couples group does not have a tendency to save money based on their morals. If they do, it is motivated by economic conditions. • Key Points • Consider messages which illustrate that being financially responsible gives you the freedom to escape the responsibilities of life at your pleasure • Highlight that being financially responsible will allow you to easily stay up to date with the latest trends, and products • Emphasize how being fiscally sound can help you achieve your goals in life, without money being the main focus • Avoid messages that position financial responsibility as a moral obligation LOW Concern for Appearance Attraction to Nature Saving on Principle Source: 2011 PRIZMC2; Environics Research Group

29. Questions? Rupen Seoni Vice-President and Practice Leader 416.969.2837 rupen.seoni@environicsanalytics.ca