Customer satisfaction is lower for big banks than for credit unions
Canada’s big banks need to do more to serve their small business customers according to new research from the Canadian Federation of Independent Business.
The organization has just released the third and last part of its Financing Main Street research series, revealing that credit unions rank higher in small business customer satisfaction than the Big Five banks. Satisfaction in the banks has generally fallen between 2019 and 2022.
"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 Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB.
Using metrics including financing, fees, account manager and service (such as access to online banking or easy-to-read bank statements), CFIB ranked the banks and credit unions from 0 to 10 with credit unions leading over the three year period and scoring an overall 5.97 points in the latest report and coming top in fees and account manager rankings.
Financing is one area where the big banks win, with National Bank (5.53) topping the rankings for the smallest businesses with up to four employees, and also top along with Desjardins for those businesses with 5-49 employees.
Room to improve
Desjardins and National Bank also saw their overall scores improve, jumping to second and third place respectively behind RBC in the banking rankings. CIBC and Scotiabank also improved while BMO and TD were down slightly. ATB Financial dropped the most to sit in ninth place overall.
"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."
CFIB says that financial institutions can improve their small business customer service by increasing access to 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.
The organization is also urging the government to ensure that FIs adhere to the Small Business Banking Code of Conduct, expand the consumer provisions of the Bank Act to include small businesses, carefully review banking M&A, and ensure new banking/payment entrants and technologies are affordable and accessible to small businesses.
"Small businesses deserve efficient, responsive, and helpful banking services," Pohlmann concluded.
