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When Tangerine (formerly ING Bank of Canada) wanted to evolve from an online business to an everyday bank last year, the company turned to WealthScapes. The financial database from Environics Analytics (EA) helped Tangerine executives assess market penetration and share of wallet by product type, consumer segment and geographic areas. Using WealthScapes’ data on the assets, liabilities and net worth of Canadians, Tangerine discovered areas with wealth potential and strategic insights that helped grow their business in a more strategic, efficient and targeted way.
Since WealthScapes first launched in 2008, the database has been a natural fit for banks and other financial institutions seeking to sell mutual funds and mortgages. But WealthScapes has become increasingly valuable to marketers and analysts beyond the financial sector. Universities and charities use the data to identify high-value donors. Retailers and real estate developers draw on WealthScapes data to plan commercial and residential developments and attract retail tenants. Today, WealthScapes helps marketers in all industries and sectors develop strategies, identify high-potential markets and attract new customers.
WealthScapes’ popularity has grown as the categories of included data have expanded. The 2015 edition, launched in August, features 178 key financial and investment statistics—more than 50 new variables—including previously unavailable data on pension plans, tax-free savings accounts (TFSAs) and registered retirement savings plan (RRSP) contributions. While marketers previously relied on conventional demographic data like household income to measure affluence, WealthScapes can help them identify consumers with significant spending power beyond what their incomes would suggest. For example, retirees living on fixed incomes from pensions and registered investments may still have substantial spending power from sizable financial portfolios.
Newly available pension data in particular provide greater insight into Canadians’ financial behaviour. According to WealthScapes, the average pension value per household is $119,468—a significant source of wealth. While some areas are home to high real estate or liquid asset values, WealthScapes data indicate that pensions are more evenly distributed across the country, with a few notable exceptions. In 2014, pensions in Ottawa grew 8.2 percent to $192,330 per household—61 percent more than the national average. Similarly, Quebec City pension values grew by 6.1 percent to $158,906.
With privacy concerns growing, it may be surprising that such detailed financial data is available to marketers. But like its previous releases, WealthScapes 2015 was built using sophisticated modelling techniques and aggregated, privacy-compliant, small-area data from a variety of authoritative sources, such as the Bank of Canada, Equifax and Statistics Canada.
That privacy-friendly feature was one reason the University of British Columbia’s Development and Alumni Engagement Department (UBCDAE) turned to WealthScapes when it sought to develop prime candidates for its major gift program. Data from public records and internal university sources proved insufficient for identifying potential donors with both the capacity and willingness to make major gifts. But when analysts developed an innovative model using wealth indicators based on WealthScapes data, they were able to rank postal codes according to residents’ ability to give to charity. “We created our own giving capacity rating system based on wealth statistics at the small neighbourhood level,” said Tracey Carmichael, UBCDAE’s Director of Research and Data Analytics.
Beyond pure market applications, the annual release of WealthScapes offers a snapshot of Canadians’ overall financial health. And the latest edition offers plenty of positive data: In 2014, household net worth rose 6.1 percent, debt remained in check at 2.9 percent and real estate values grew 5.0 percent, indicating a solid but not overheated market. Despite recent economic concerns, the new data suggest that households have improved their balance sheets and are in a stronger position to weather financial stress. That’s the kind of insight that marketers in any industry can appreciate.
Peter Miron is a senior research associate at Environics Analytics and the lead developer of WealthScapes 2015
