World’s Best Banks 2021: North America

Innovation and a heightened degree of customer service helped North American banks mount a strong response to challenges posed by the pandemic.

The devastating toll caused by the Covid-19 pandemic is gradually abating in North America. Progress hinges on continued vaccine administration. The North American banking sector weathered a very difficult year in 2020, as the economic contraction combined with spiking unemployment caused significantly higher credit costs and reduced profitability. Progressive recovery is gaining momentum within the US and Canadian economies and continues to be bolstered by high levels of fiscal stimulus and the accommodative stances of their central banks.

Many North American banks responded strongly to address the unprecedented challenges. Royal Bank of Canada (RBC), Global Finance’s overall winner as 2021 Best Bank in North America, hastened employee remote-work arrangements, helped customers with more-flexible loan terms and allowed greater access to credit to ease financial burdens.

RBC placed No. 1 in customer satisfaction among the large Canadian banks according to J.D. Power rankings. This contributes not only to customer retention but also to enhanced cross-selling opportunities. Approximately 20% of Royal Bank of Canada clients use multiple products of the bank, a level that exceeds its Canadian peers. Its City National Bank subsidiary, Royal Bank of Canada’s growing franchise in the United States, focuses on corporate and institutional banking as well as wealth management. The division performed well during 2020, with revenue increasing 10% year-over-year and representing 25% of total bank revenue.

Unsurprisingly, customer use of RBC’s digital banking channels surged during the pandemic, and the bank continues to differentiate itself through aggressive development of advanced technologies and the utilization of machine learning. The bank is committed to fostering an innovation culture through partnerships with fintech firms and Big Tech, the creation of six innovation labs globally; and collaboration with research partners at top universities, with the firm’s Borealis AI research center central to the bank’s strategy. The center launched Aiden in October 2020, an AI-based electronic trading platform built in collaboration with RBC Capital Markets, to deliver high levels of execution for clients trading in US and Canadian equities.

Bank of America retains its position as Best Bank in the United States for a third year in a row, with its powerful banking franchise that includes leading positions in lending, deposit share and client service among consumer and corporate banking segments as well as wealth management. The firm is committed to delivering a high-tech, high-touch client experience and continues to enhance existing digital capabilities while also introducing innovative financial solutions. Customers are responding with higher levels of engagement. For example, Erica, the bank’s AI-driven digital personal assistant for consumer banking saw transactions increasing 67% year-over-year. More than a chatbot, this application provides more-detailed account and payment information instantly using voice recognition.

The bank is focused on fostering loyalty by offering comprehensive and integrated banking products. One such innovation, launched in October 2020, is Life Plan, a resource for online and mobile banking customers that helps define short and long-term goals in finances, family, health, work and more, and offers products to help reach those goals, with progress tracked and periodic adjustments. Additionally, the firm’s Global Banking & Markets division continues to enhance its CashPro application, with greater digital solutions for its large corporate, middle market and small-business clients to facilitate payments, receipts, liquidity, investments, foreign exchange and trade in order to maximize efficiency and working capital.

With a deposit share in excess of 30%, Butterfield Bank is the leading bank in its market and is Global Finance’s Best Bank in Bermuda for 2021. In addition to providing a range of traditional banking, wealth management, trust and custody services, Butterfield also serves a robust market for captive insurers and middle-market reinsurers. The bank’s Bermuda market has remained largely open for business during the pandemic, even though tourism, which represents 17% of GDP in Bermuda, has understandably taken a hit. Butterfield has limited exposure, however, in its loan portfolio. The bank’s traditional embrace of conservative underwriting standards, its diversified loan portfolio and solid balance sheet management stand it in a good position to benefit in the post-pandemic recovery.