by MorinvilleNews.com Staff
A Canadian Federation of Independent Business report has learned that small businesses continue to be more satisfied with the overall level of service provided by credit unions rather than the Big Five Banks. Overall, satisfaction with banking services in 2022 is lower than in 2019; credit unions have remained strong.
“While big banks hold most of the small business market share, they’re not serving their small business clients as well as credit unions do. Banking fees remain a major cost constraint; many small businesses find it hard to contact someone at the bank directly, and they feel like their unique banking needs are not being taken seriously,” said Executive Vice-President of Advocacy Corinne Pohlmann.
Credit Unions pulled a 5.97 rating out of 10 in the most recent report, a number that balances factors including financing, fees, account manager and service (such as access to online banking or easy-to-read bank statements).
When it came to financing among the smallest businesses (up to four employees), National Bank received the best score (5.53), nearly tripling its score since 2019. For small businesses (5-49 employees), Desjardins and National Bank were at the top, followed by credit unions.
Desjardins jumped from seventh place in 2019 to second in 2022. Also improving since 2019 was National Bank, which came in third. Royal Bank of Canada (RBC) moved from ninth place to fourth overall and was the highest-scoring bank among the Big Five. The Canadian Imperial Bank of Commerce (CIBC) and Scotiabank climbed one spot, while Bank of Montreal (BMO) and TD Canada Trust (TD) fell by one. CFIB said ATB Financial dropped from second place in 2019 to ninth place in the most recent report, as many businesses felt that the bank failed to understand the struggles and challenges that they encountered throughout the pandemic.
“While there were some positive changes in the rankings, it’s still concerning that the top overall score decreased and comes in below 6.0. when the highest possible score is 10.0,” said Michelle Auger, CFIB senior policy analyst. “It shows there’s still a lot of room for improvement for all financial institutions, even the top-rated ones.”
Small businesses also evaluated their banking experience during the pandemic in four separate categories: access to pandemic financing, assistance with fees and/or payments, remote service offering, and general satisfaction.
Desjardins, National Bank and credit unions received the highest scores, while the rest of the big banks were placed toward the lower end of the scoring range.
CFIB is recommending government implement banking changes to make it easier for small businesses to access financing and improve the quality and affordability of banking:
- Ensure that financial institutions adhere to the Small Business Banking Code of Conduct.
- Expand the consumer provisions of the Bank Act to include small businesses.
- Carefully review banking mergers and acquisitions.
- Ensure new banking/payment entrants and technologies are affordable and accessible to small businesses.
The business advocacy group is also calling for low-cost financing for small businesses, ensuring small business bankers get to know their clients, and not promoting credit cards as a main alternative source of long-term financing.
“Small businesses deserve efficient, responsive, and helpful banking services,” Pohlmann concluded.
Those interested in more details can find the third and last report in the Canadian Federation of Independent Business (CFIB)’s Financing Main Street research series online.
