How traditional FIs can shine by showing Canadians the way this tax season

Like just about everything else in the last year, tax season promises to be one of the most complicated in recent memory, with consumers asking more questions—two in particular:

What does work from home mean for my taxes?

The 5 million Canadians who were forced to work from home for the first time during the pandemic will be wondering what exactly they can write off. Office supplies? That new printer or monitor? Or even rent?

How do I handle all these government grants?

For the 9 million consumers who collected CERB, how does that factor into their income tax? What about reporting government subsidies like the CIB or EI, considering that in May 2020, the unemployment rate almost doubled from its average of 7.7 percent to 13.7 percent (2.6 million Canadians)? And what about the impact on small businesses that received wage subsidies and other grants?

To make matters more stressful, because of the late tax deadline last year, many Canadians may be feeling like they’ve just gone through this process. This year more than ever, they’ll be looking for financial expertise.

It’s a chance for organizations like H&R Block as well as banks, credit unions, and pension/benefit providers to meet a pressing consumer need while challenging the online competition. Intuit TurboTax saw its customer base grow by an astounding 70 percent in 2020 (compared with 7 percent in 2019), due largely to the pandemic keeping consumers at home. 

To counter this kind of growth, traditional FIs need to re-think their tax-season promotions and develop communications that:

1. Target the message.

Research from Accenture shows that 91 percent of consumers are more likely to buy from a brand that provides relevant offers and recommendations. With that in mind:

  • Speak directly to consumers and demonstrate an understanding of their current need state—e.g.: “We know you might feel daunted tackling this year’s more complicated taxes, and we’re here to help you get through it and maximize your return.”
  • Personalize the message to individual consumer segments—families, young professionals, newcomers, small businesses—to increase impact. 

2. Deliver it through the right channel. 

Crafting the right message is pointless if it never gets in front of the consumer, so this is the time to take a close look at channel strategies to ensure they’re making the maximum impact and generating the best possible ROI.

While many organizations are taking a digital-heavy approach during the pandemic, keep in mind that digital fatigue is on the rise, so a healthy mix of digital and physical is essential. The two together drive a much higher response than they do on their own. Consider that 72 percent of consumers prefer to engage with brands through multiple channels before making a purchase, and year-over-year, brands with a strong multichannel approach see a 9.5% increase on annual revenue. 

With their bricks-and-mortar physicality, traditional FIs are generally able to offer a more personalized customer experience. This is the time for them to make the most of it.