Resilient Canadian consumers are looking forward to growth, with Matt Fabian
In this week’s episode of HTLMTS, I speak to Matt Fabian, TransUnion Canada's Director for Research and Consulting. Matt spoke to me about the credit resilience he’s seen displayed during the COVID-19 pandemic and the early shoots of growth that have recently become visible.
And also about BNPL and whether these new lenders might nip in and gather that growth for themselves before the big players have time to react. Matt has over 20 years experience in Candian financial services and access to a treasure trove of data, so he’s perfectly placed to fill us all in.
You can find more of Matt's work at https://www.transunion.ca/business and more on the Pulse studies he mentioned at https://www.transunion.ca/consumer-pulse-study
You can hear more about lending to immigrants on episode 11 of this show
If you have any feedback, questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.
Regards,
Brendan
The full transcript with timestamps is below:
Matt Fabian 0:00
Then we actually saw the opposite, right? We saw that these are people that actually have very healthy credit portfolios, they've got credit cards, they've got auto loans, they've got a full wallet of credit product, it's not that they can't get it. And so you know, it's probably a convenience thing, or it's probably, you know, the ability to split the payments into a manageable set of equal payments, whatever it is, there's something different that's drawing people to buy now pay later or that type of vehicle.
Brendan Le Grange 0:46
Welcome back to How to Lend Money to Strangers, the podcast about lending strategies around the world and across the credit lifecycle. Today, I'm speaking to Matt Fabian, Head of Research and Consulting for TransUnion in Canada - which means that we were colleagues for four years, albeit at long distance. Matt has 20 years of experience in the financial services and management consulting, including roles in customer analytics, building client strategy, data analytics, and modelling, credit cards insurance and wealth management, and is a recognised speaker and contributor to media that includes CBC BNN, Bloomberg, Globe and Mail. It's that background - plus the fact that he has access to one of the largest consumer credit databases in Canada - that make him ideally placed to tell us how COVID has impacted that market.
Let's get into it, you've brought out the credit industry indicator (CII). For the five years leading up to COVID it was never really breaking out of the 95 - 105 band, or very rarely, and then suddenly hitting 64 in peak COVID. Do you want to talk a bit about what the Credit Industry Indicator is? And then what can we gather from the huge dip and recovery we're seeing, is that reflective of what's happening?
Matt Fabian 2:04
So, as you know, the credit industry indicator is something we've been working on for a couple of years, and we've launched it in Canada, the US, India, and in Latin America, Hong Kong, and South Africa are coming. And so essentially, we've tried to build a model that identifies consumer credit health at a market level in a single metric. And we've taken hundreds of different credit variables and rolled them up into four key, if you want to call them, factors.
And we've kind of looked at the value chain of credit and said, you know, you start on one side, you've got demand, you got 'how many people are actually looking for credit' and is that going up or down? And then corresponding to that is supply, and so are lenders satisfying the demand? Or are they restricting it? Or, you know, are lenders really seeking to grow acquisition despite lower demand, and so there may be having to dip into higher risk categories to get those customers. So how do those two play off? And then once you have your universe of consumers that have credit, we look at behaviours - are they making payments? are they increasing balances? are they using credit more? are they using revolving credit? And what does that mean? And then the final piece, obviously, is the performance. So is risk going up is risk going down? Are we seeing higher delinquencies, bankruptcies, that kind of thing.
And so each of those is correlated to one another across many, many variables. And they're all interrelated. And so the model is quite complex. And it actually looks to figure out what's driving what and which direction to the arrows go. And then we roll all that up into a single number.
So what we've seen in Canada is, you know, Canada was relatively flat for a long time, the last real economic crisis we had, and it was a regional one, but a big one for us given that we're an oil producing country, was when the the cost of oil dropped, almost, I think at some point it hit a negative, around 2015. And so that caused high levels of unemployment in certain regions, our dollar dropped, and so there were several macroeconomic consequences that impacted that as a result, we started to see quality of credit and the credit industry indicators slowly drop. There were a few little spikes down, but nothing major, but it was tilted downward for a little while.
It took a while, maybe a year and a half to recover from that as oil prices rebounded. You know, things like supply and demand kick back in, there was always sort of a demand for credit even more in some cases in those areas where people were losing jobs, but supply had dried up putting these oil patch playbooks in if you want to call it that, where they were building very specific lending restrictions and risk restrictions on those areas, just to be cautious. And so the amount of lending slowed in those regions. It really then flattened out for a couple of years and the government put in very low interest rates for a long period of time. So our prime rate dropped down 2.25% And it's really just stayed there since then. And so you A monthly payment got cheaper. And so all of a sudden, credit got a little bit affordable. And we saw sort of a little bit of a rebound in that index. Not a lot, it was really, I'd caught almost flat for two, three years heading into COVID.
Right at the tail end of 2019, early 2020, we started to see a little bit of a deterioration there, they did raise the interest rates, so cost of debt got a little bit higher. We've had a pretty heated mortgage market in Canada for about three years where prices have grown 30-40% year over year and so affordability has become quite an issue, then, you know, people taking on those larger mortgages, that obviously affects the amount of disposable income they have available for covering other expenses, including other debt. And so we did see a little bit of a crunch there, but nothing disastrous. Back in 2018, the Government of Canada put a new regulation and it was called the B-20 mortgage rule. And it was really designed for this. So you know, depending on how much deposit you put on, or downpayment you put on your home and whether it was insured or not insured, you needed to demonstrate no matter what the interest rate was that you could afford that home or those payments on that home at 2% higher than that. So it was almost like stress testing and individual. And so that was really meant to help be a shock absorber for the spike in housing. So coming into the COVID, around March, we had just started to drop lower than 99-98 range, and it dropped down to 64 within four months - it's the largest and most severe drop we've modelled, going back 10 years.
And even when we had, you know, an even bigger oil crisis in 2010, or coming off the global financial crisis, there was a drop but not to the severity. And I think it has to do with the speed with which COVID and the associated lockdown and economic measures were implemented. But also COVID didn't hit a particular region, it didn't hit a particular sector. This was everybody. It was widespread. As most people would know, wherever you live.
Canada had one of the lower unemployment rates coming into COVID. We were at 6.5%. Within four months, we were at 14%. And we saw GDP drop, we saw a whole bunch of macroeconomic measures drop that really influenced that. The other thing that happened with lockdowns was that there was just no spending, there's nowhere to spend. And since then, kind of coming out of it, we started to see almost the same slope of a very severe recovery.
Then there was a wave two. So in certain provinces and certain areas of Canada, the lockdowns were reinstated to some degree. But since then we've started to see more and more of a reopening of Canada, we're not quite to pre pandemic levels, we're kind of in around 93-95 range, you know, where we were around 105, as you said, but, you know, it's sloping in the right direction. And, you know, we're hoping barring any kind of fourth wave or or any big reversal in policy or something, you know, over the next month or two, we'll get very close to where we were pre-pandemic.
Brendan Le Grange 7:52
What's very interesting with this measure, and being able to break it down into those four sub sectors is that all of them dropped together through the June/ July peak of COVID. But actually, supply of credit was one of the first to rebound. And demand followed. Now in the more recent months demand's the strongest performing of those ain, as consumers get back to pretty much their normal lives. But early on in the crisis, everybody was concerned and worrying about how would we react and how people were going to take uncertainty in the future and translate that through into availability of credit. And what we're seeing here is everybody took pull back for a while, but the Canadian lenders seem to have been pretty quick getting back to supply credit to the market.
Lenders are maybe still a little bit behind pre-pandemic levels, but actually, it didn't go nearly as badly as I might have done.
Matt Fabian 8:43
Yeah, I think there are a couple things, especially in Canada that really were unique. So during the crisis, the government stepped in and provided subsidies to small businesses, and medium sized businesses to support workers that were being laid off temporarily by this and so they were able to maintain their their pay. There were direct subsidies to consumers that had lost employment or had employment severely reduced to cover just daily expenses. So the Government of Canada spent hundreds and hundreds of billions to drive support across Canadians that needed it. I think that really helped. We didn't see bankruptcies or foreclosures or anything like that, to the extent that people were bracing for.
I think the other thing, lenders in Canada typically don't offer deferrals on products - like payment holidays, or skip payments, things like that. They do them as a one off, as a marketing thing, a one month or two month offer, but not to the extent that they did here and so the the entire financial community jumped in and offered deferrals across any product and the duration was anywhere from one to six months depending on the product and depending how you negotiate it with your lender. Obviously, those balances still need to get paid. So it'll extend that debt, but it got people through that tough patch. And so yeah, they're still elevated household debt was a concern coming in, that people lose their jobs, the high rates of unemployment that we saw now is when this elevated household debt is really going to catch up to people and cause this industry crisis. And it didn't happen - because of the combination of government subsidies and the lenders being able to jump in and provide relief.
And Canadian consumers, we've noticed, just generally are very resilient. Headlines in a lot of newspapers and business magazines for probably seven years have been 'Canadians carry the most household debt out of the G7 countries' but look at the other side of the balance sheet - the amount of wealth Canadian consumer has been accumulating at the same time has been growing at the same rate or faster.
The other thing that we noticed was consumer behaviour changed, which was really interesting. Some of it was taking the subsidies and doing this, some it was taking the payment holiday and doing this, and some of it was just people doing it on their own: but we've seen the largest stockpile of cash going into bank accounts that we've ever seen, of just new deposits that came in over COVID. And so there's this big pot of cash that consumers are holding onto right now.
And I think the provision for credit losses that most of the banks had forecasts through COVID were relatively high and nothing came to fruition, right. They didn't see the link. And in fact, delinquency rates have been dropping, even when deferrals ran off as the freezes expired. We thought, well, you know, the people taking deferrals are probably the people that need it. Once they don't have that option anymore. We're gonna see delinquency rates amongst that population increase... and it didn't. So it did, it's increased slightly, but not to the levels that we had thought. And so I think lenders looked at that brand. And they just said, No, we're ready, we're ready to jump back in and you know, ourselves from a supply perspective, we tighten the reins, you know, it was prudent from a risk perspective what we did, but we're ready to start to get back out and you know, reengage with consumers and lend.
To be fair, it's been the lower risk consumers that have been engaging a lot, we have seen sort of the higher risk tiers, the subprime consumers, still stay on the sidelines a little bit. And I think they did take a little bit of a shock as a result of this, you know, those are the folks that maybe couldn't get credit. We started doing a survey, and we asked them, you know, why haven't you engaged and a lot of them are still worried about, I'm not sure I'll qualify, I'm not sure I want to go and you know, tell get get told I can't get credit. And so there's a bit of an education needs to happen, I think, a little bit of conversation between the lenders and the consumers. So you're right, demand did increase. But it was one segment, it was lower risk segment that really engaged lenders were all in. And I think now they're waiting for the rest of Canadian consumers to jump in.
Brendan Le Grange 12:40
This is a similar message to what was coming through in the UK, that the biggest protection during COVID was owning a house, where property prices have just been rising faster and faster since COVID hit. So it wasn't a subprime housing crisis, where the security underneath the mortgage was at risk, the securities just become more valuable. Also, if you had the mortgage, you know, that's your single biggest monthly expense, and you could get a deferral on that. Whereas if it was your rental, it wasn't so easy. So if you had a house, you could have stockpiled a little bit of savings, you could have paid down some consumer debt that was more expensive. So now you're back possibly stronger than before, financially, at least in the short term. And maybe that's reflecting summary, if I look at your origination numbers 44% year over year growth in mortgage origination, so still a lot of activity happening in mortgages, low risk product, relatively high income needs. In other markets, things like credit cards, instalment loans aren't doing as well, but bankcard at 12% is still showing quite a degree of interest. But I do see instalment loans slightly down. And maybe that's reflective of those different parts of the market where near prime subprime consumers more likely to take an instalment loan, and maybe there's less activity happening there, then the mortgage were the opposite.
Matt Fabian 14:02
Yeah, right. Well, I mean, the one thing we didn't see through COVID was a slowdown in mortgages. And so mortgage origination, as you say, just kept moving along at a hectic pace. In addition to that, the housing prices in Canada continued to go up, they've cooled off in the last I'd say, quarter and a bit. But by cool off, I mean, instead of 25% year over year, they're at about 8% year over year, which would have been probably an extreme five years ago. But now it seems to him. The fact that demand was still increasing while prices increased. And so you know, that demand continues. And, you know, a couple things, I think contribute to that, especially in Canada, where the concentration of workers in Canada or in big cities, I think 90% of the population lives within two hours of the US border, and so it's very consolidated into major markets. And so you know, we see those prices in the big cities like Toronto, Vancouver, Montreal. parallels international scale cities that the prices are going up, they're going up everywhere, but not at that rate. It's the big cities that are driving it. I think one of the things that happened with COVID was, you know, behaviorally, we've changed as a society a little bit, there was this shift to remote work, right. And a lot of people that had been commuting for years and living in cities to be close to their office, found themselves working from home, and all of a sudden looking at their house that's in Toronto that is appreciated in value by, you know, over the last five years, maybe 234 times. There are people in Toronto, you know, in a home they bought 15 years ago for 300,000, that's now worth over $2 million. You think about the equity in that home. And you think that, you know, they really only live there because it's on a subway line or train line to get to the office, which they don't have to get to anymore. And so they started looking at lifestyle and saying, hey, could I go farther out, get a larger piece of property, maybe in the country or in the suburbs? That if I don't have to worry about the commute, then, you know, why am I here? That's not everyone. But there's enough that did that where we started to see that migration out. That shift in people's attitudes and behaviours towards where they work, has had a big influence on the market, and how people manage that as well, because you could sell the house, pay off all your debt, or pay down some of your debt and still move into a really nice home outside of the city. As we start to reopen, different companies are mandating back to work, some companies are keeping more of a flexible schedule. And so I think people are still, you know, waiting out over the next little while to see exactly what that's gonna look like for them, we'll see if that behaviour lingers, I can't speak for everyone, I can speak for myself, I've been home since the pandemic started. And you know, I've gotten used to this cadence of working from home, our company is going to be a lot more flexible in terms of work hours and coming in. And so you know, I wouldn't be I'm not going to be but I could easily be one of these people moving farther away on a lake somewhere that's a little bit nicer. And,
Brendan Le Grange 17:00
and let's stay on that idea of behaviours. And talk a little bit more about spending products or credit card, obviously, during the lockdown. Initially, credit cards took a really big hit because the stronghold of travel and entertainment were the ones most heavily locked down. And consumers weren't out spending as much. So we saw a big drop off in credit card spend activity. And that coincided with a move towards digital that a few years ago would have helped credit card. But this time it coincided with the arrival of online natives, like buy now pay later. And I wonder what your thoughts are, as we're seeing good signs of recovery in Canada? Do you think credit cards are going to be able to bounce back to pre pandemic levels and grow from there? Or is Canada having the same bigger merchants or big threat coming to credit cards from Buy now pay later and similar? Online only competitors?
Matt Fabian 18:01
It's certainly here. And it's certainly something that the lenders and card issuers are talking about more and more, I would say compared to markets like the US and the UK, Canada is still pretty far behind in the point of sale or buy now pay later space, we are seeing some of the bigger players come into the market and start to take some share and start to work on it. We did ask consumers are you aware of buy now pay later, and it was only I think about 10 or 15% that we're in Canada, and much smaller percentage. So they've used it. So it's early days, and it's a relatively new, it's not new in the fact that point of sale has been available in Canada forever. From a retail finance perspective, if you go into a retailer and buy a couch or a TV and have it put on credit, the fact that you can do that for much broader set of categories and kind of do it not at the retailer. But just as a as a thing is probably new to Canadians. And so that uptake isn't there. But it's certainly something that the Canadian market is aware of, then we see the impact it's having in the US and in UK and other markets. And I think they're bracing for that reality. What's happening with credit cards right now, you know, as you said, the spending did drop as a result of COVID big ticket items like travel entertainment went down. We haven't seen that bounce back, we have seen spend starting to recover slightly, but still not at the levels it was previously we did see a lot of consumers making larger payments on their card to kind of start to leverage that card a little bit. Canadian consumers aren't as card heavy at all. You think about a place like I know, you know Hong Kong very well in that market where it was very common for people to have five or more cards in their wallet. In Canada, it's about two and there's a lot of issuers and so it's a very hyper competitive market already from an origination acquisition perspective. I think once you add something like a point of sale, buy now pay later, it creates this external threat to the market that they're keenly aware of. And they're looking at how they either can adopt that and partner with that or utilise that or compete with it. And so yeah, it'll be interesting. seem to see the two things that credit card companies do. Right? You can acquire more customers and build your pipeline, when you get a lockdown to the magnitude that we had an acquisition basically shuts down. And you know, when you don't have that acquisition channel to build the pipeline, then you rely on your back book strategies like credit limit increases, and balance transfers and things like that to build up your revenue for the year. But when those aren't available to you, either, because your risk Department says we can't do that right now. It's COVID. You really tied so they did struggle, we are starting to see a lot of those programmes starting to kick back in we have started to see credit limit increases. So they're getting more active in terms of managing their portfolios. But I think you're right, they are still looking at what we're still not seeing spend rates, where they are, what else can we do. And then there is, as you say, this looming and inevitable, I think, surge of buy now pay later and POS type financing that we're starting to see but not to the extent that we're seeing in other markets,
Brendan Le Grange 20:57
the credit cards had a perfect storm of things that were difficult during lockdown. But as a bit of a silver lining that deleveraging that's happened does also mean that they do have quite a lot of available pre approved credit with customers. So as they think about meeting this underlying demand for instant approvals, instant access to credit, at least, they've got these customers who've got these large open to buy on their credit cards gives them some leeway to to fight back. And, as you mentioned, the risk never quite materialised. And I'm seeing here, you report your delinquencies, not just as an average across the books, but you've got vintage curves. And we can see even the credit cards open in 2020 are performing within the historical range or right on the historical level, so no extra risk. And that was the other big concern, maybe lost within all the averages are going to be these pockets or consumers who's opening a credit card or loan in COVID. Maybe most of them would be low risk. But surely, we're going to take on risk we don't understand. And actually looking at the seeing it as a vintage laid out, you're seeing that even those accounts opened during COVID are not performing any worse than those open over the last four or five years. So credit card issuers can look at that and say, Well, we had this perfect storm, our high revenue market segments were closed, spend was locked down, the rewards we normally give air miles became irrelevant for a few years. So it became harder to compete. Bad, risk wise, our book stood up, and we have this capital in the market. So now if they can think of a way to engage the customers who they do have a relationship with, they're not starting from zero.
Matt Fabian 22:42
Yeah, you're absolutely right. The other thing that's interesting is, we just did a quick study again, we don't have a huge sample in Canada on Buy now pay later or point of sale. But we did look at volume of inquiries and some other things around point of sale financing, to try and get an early read of the market. Look at those consumers to see, you know, what does their wallet look like and do a little myth busting. And I think perception was well the people that are going to be drawn to POS financing are probably higher risk don't qualify for credit, probably younger impulse buy kind of stuff. And we saw actually the opposite, right, we saw that these are people that actually have very healthy credit portfolios, they've got credit cards, they've got auto loans, they've got a full wallet of credit product, it's not that they can't get it. And so you know, it's probably a convenience thing, or it's probably, you know, the ability to split the payments into a manageable set of equal payments, whatever it is, there's something different that's drawing people to that type of vehicle. But the other thing from a credit card perspective that we did notice is, and we've seen this in the US in a study that they've just recently did was that the people that are utilising Buy now pay later point of sale financing, we haven't seen that happen at the expense of credit card balances. So we've still seen the same amount of balance and spend on their credit cards. While they're engaging in POS. You know, that's also good news to credit card issuer because it's not an or it could be an end,
Brendan Le Grange 24:01
we should also be reading those IDs in the context of disappearing cash. And so all forms of non cash transactions should be able to increase together.
We've spoken in depth on credit cards and mortgages, maybe we can just shoot through some of the other major product categories and get a sense of where they are.
Matt Fabian 24:27
They're really five main categories in Canada. There's few others student loans I won't talk about but and then some other smaller loans that we won't talk about but just briefly, you know, the the auto loan or the auto financing sector in Canada has been relatively healthy. We saw this pent up demand coming out of COVID Obviously with people not being able to get onto lots and buy cars and once that demand was released, we saw a huge surge in volume of vehicle sales which translate into a large volume of auto loans. That demand has since been satisfied. Now what we're Seeing is a little bit of an acquisition drop off, not because of demand, but because of supply, right? We're seeing because of the chip shortages globally, we're seeing a lot of car lot sitting empty. And we seen a shift towards luxury vehicles, trucks, you know, that's where chips are going. And so we have seen the average price of the vehicle and therefore the average auto loan go up.
Brendan Le Grange 25:20
And that's one of those ones. That's a bit counterintuitive to the economic theory, where in normally in a global crisis, you wouldn't expect demand for new vehicles to increase. But we saw that in the UK as well, because this was an underlying health issue. consumers wanted to move away from public transport. And despite the fact you're in a major financial recession, demand for for cars went up
Matt Fabian 25:45
and discretionary spend too, right, I'm not going on that $25,000 vacation to Australia, this year, I'll get a new car.
Brendan Le Grange 25:51
Yeah, that's a good point. Luxury is where you can find them. It's been a really prolonged period at home. And as you say, certain luxury items have been off the charts. So people have made savings and reassigning them where they can.
Matt Fabian 26:04
Yeah, the one product you talked about earlier instalment loans or personal loans, it's been an interesting shift in the industry. Over the past few years in Canada, we've seen this emergence, I'd say in last six years of subprime lenders coming in and offering small personal loans to really develop the underserved or credit, invisible portion of the Canadian market. And some of them have really been able to take a strong foothold and really build up, you know, sizable business, and they're making more of a dent, right, where they were probably 1% of the overall asset base of outstanding personal loans. They're now up into, you know, the 15 18% 20% range. In the US, we saw them go coming out of 2010, from 8%, to 32%. So not as drastic market share grab in Canada, but I mean, it's still growing. But what's happened is we've seen essentially this bifurcation of the market, we've seen this emergence of smaller column fintechs, if you want or alternative lenders, that are really catering to pockets of the market, that the larger banks either don't want to or don't have the capability to serve as effectively. And they're building a really strong foothold there. Whereas we're seeing the banks seeing this and saying, Well, we got to get back into that personal loan business. So they're coming back. So that personal sector starting to grow, we did see it drop off, you know, through COVID. Whereas, where people were taking personal loans, we saw larger size loans. So lenders were were lending less in terms of volume, but willing to lend more in terms of amount,
Brendan Le Grange 27:37
which mirrors the UK experience quite closely where we did see an uptick in higher value, lower risk loans, for things like household improvements alongside people being stuck in their homes for a long time. But then what we saw was, the more day to day personal loans were far more reactive to how open the economy was. So they dropped much further when we locked down and recovered much quicker when the economy opened. But we needed to be able to travel on holiday, or there needed to be stores open for people to go to. So those smaller value loans were very spiky.
Matt Fabian 28:11
And then the final product that I'll touch on is lines of credit. Interesting, because lines of credit are typically loyalty style lending. So the big banks that offer lines of credit, they don't use it as an acquisition tool. They use it as a cross sell to their very best customers. They'll talk to you about why don't you take out a line of credit for renovation or whatever rainy day you need an emergency repair on your roof, whatever it is, right. And so because of those conversations happened last during COVID, we saw a huge drop off where we did see high growth was the lines of credit that were tied to home equity secured line of credit using your home as the security. We did see a huge increase there. And I think the same reasons that you just mentioned, you know, you're looking at, well, I'm home, I'm not going anywhere. So now's the time for home renovation. So similar to instalment loans, we saw a huge drop off in new acquisition, but we did see a slight increase in the size of the loans which were those bigger ticket securitized loans since COVID. You know, I shouldn't say COVID is over. It's not but you know, as the lockdown restrictions have eased in the economy starts to reopen. We have seen lines of credit start to take off again. from a risk perspective, the banks have opened those channels up again, I think, you know, we're expecting to see that return to normal.
Brendan Le Grange 29:29
And that seems to be the theme then for where the market is today that we hit in the early days of COVID. In the oil index, one of the worst crisis's we've had a huge amount of concern in those early days what's going to happen to house prices what's going to happen to delinquencies and if we look at the actual delinquencies, what actually happened during that period, even when we take into account the paying down off payment holidays, delinquency, maybe had a little spike here or there but it's not Actually all that different from going in, and now, people have weathered the storm pretty well. As you said, it's not over, there's still the risk that lockdowns could reemerge. But for the most part, as we're sitting here, would you say it's fair to say Canada's in the recovery stage? Getting quite close towards pre pandemic?
Matt Fabian 30:20
Yeah, I would say definitely. That's the case. You know, the conversations we have with lenders are, they're all in for growth right now. And they're looking for it. So the two big things that that are circulating in the industry right now are, where do we find it? Have behaviours changed permanently? And how do we leverage that Canada's population organically hasn't grown, we're a country that relies a lot on immigration to build jobs employment satisfy the demand there, that came to a standstill through COVID, as well, as you know, the international flights were shut down, immigration was largely shut down. And so as that opens up, banks are looking at ways to engage new Canadians earlier. And often, different lenders are better or worse at it. And you know, you come in any country with not a lot of credit history, if at all in that country. And so the rate that you build up credit becomes slow, and sometimes a sticking point for some immigrants who had great credit, where they came from. And so thanks for trying to figure out how do we ramp that up as an acquisition opportunity. The other big thing on the horizon is interest rates. So interest rates remain low inflation rates been the highest in Canada, that it's been in many, many years, well over the target inflation rate. Right now, the Bank of Canada is saying that they consider that transitory they consider it just a byproduct of coming out of a lockdown, and then sort of the explosion of commerce that's happening. And they expect over the course of the rest of this year and into 2022, that it will stabilise back down to the rate but there is concern that if it doesn't, they have to take monetary policy measures, which could be an increase in interest rates, and you know, consumers that have taken on that additional debt all of a sudden have to pay more for it. We're doing some research on that right now, to kind of estimate, you know, what would that look like? I think those are the two things on the horizon. But sure, the overall sentiment, for sure you're you're right on in Canada, that reactivation growth and back to normal.
Brendan Le Grange 32:07
And I know that you've just had your Financial Services Summit. So people might have seen your speaking there. But if anybody wants to find out more from you about these industry numbers, or indeed, about that research that's ongoing, what's the easiest way for them to get a hold of you,
Matt Fabian 32:23
You can always Google "TransUnion Canada research" and type in "TransUnion Consumer Pulse Survey", you'll get access to all of the consumer research that we're doing. Currently, the surveys are out there across the world. So no matter where you're tuning in, from, hopefully there's a region can look at that research as well. Otherwise, you know, if you go on the TransUnion, Canada website, under our events, we have quarterly webinars where we're updating the market on you know, what we're seeing and download a lot of our fact sheets and things from previous webinars.
Brendan Le Grange 32:51
Great, thank you. Very informative and good to see sort of a pretty stable position despite what we've all been through. I'll put those links in the show as well. Now appreciate it. Thank you. Thanks. And thank you all for listening. If you're interested in the topic of lending to immigrants, you can learn more in Episode 11 of the show, where I speak to Misha Espiov of Nova Credit about just that topic. If you're enjoying the content in general, please remember to subscribe, rate and share the show and I'll see you next Thursday. This has been How to Lend Money to Strangers the podcast about lending strategies around the world and across the credit lifecycle.