Small businesses are happier with the financial services they receive from credit unions than with those provided by the country’s five largest banks, a survey by the Canadian Federation of Independent Business has found.
The advocacy group asked small businesses to rate, on a scale of zero to 10, how their financial institutions performed in a range of categories, including financing, fees, account management and service quality.
Credit unions, which were assessed as a group, had topped the list when the survey was last conducted in 2019 and maintained top spot in 2022, with an overall score of 5.9. They also ranked highest in the “banking fees” and “account manager” categories. Desjardins Group rose to second place from seventh in 2019, while National Bank of Canada jumped one spot to third.
Royal Bank of Canada recorded the biggest jump by a large bank, to fourth. Canadian Imperial Bank of Commerce and Bank of Nova Scotia each moved up one place, to fifth and seventh, respectively, while Bank of Montreal and Toronto-Dominion Bank each fell one spot to sixth and eighth, respectively. Alberta Treasury Branches (ATB Financial) dropped from second in 2019 to ninth, amid criticisms of its response to the pandemic.
The report also broke down the results by the size of the small business. For those with up to four employees, National Bank came first, tripling its score from 2019. For businesses with five to 49 employees, Desjardins and National Bank lead the way.
Corinne Pohlmann, CFIB’s executive vice-president of advocacy, said there was a disconnect between the banking services offered by large banks and the needs of small businesses.
“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,” she said. “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.”
Another point of concern was that the overall top score of 5.9 was down from the 6.19 recorded by credit unions in 2019.
“It’s still concerning that the top overall score decreased and comes in below six when the highest possible score is 10,” CFIB senior policy analyst Michelle Auger said in the release.
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The CFIB report also evaluated banking services during the pandemic, considering access to pandemic financing, fee assistance, remote services and overall satisfaction. Desjardins, National Bank and the credit unions scored highest.
To improve banking for small businesses, CFIB suggests that the government enforce the Small Business Banking Code of Conduct, extend Bank Act consumer protections to small businesses, thoroughly examines bank mergers and ensure new banking technologies are both affordable and accessible.
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