A new report from the Canadian Federation of Independent Business (CFIB) shows small and medium-sized businesses prefer credit unions to Canada’s big banking institutions.
Called Battle of the Banks, the report shows what CFIB calls a “disturbing trend: the smaller the business, the lower the overall bank score,” based on the survey of nearly 13,000 respondents.
The report found credit unions did the best job of serving entrepreneurs in areas such as financing, fees, experience with account managers, and service.
"Banks need to pay close attention to the report's findings if they are serious about serving the small business market," said CFIB vice president of research Doug Bruce.
The results are interesting given the amount of marketing Canada’s big banks do to cater to the small business market. While Canada’s big banks were designated earlier this year as “too big to be allowed to fail,” by the Office of the Superintendent of Financial Institutions (OFSI), the survey suggest they are falling down when it comes to serving small businesses.
According to the report, credit unions achieved the highest overall score among respondents of 7.4 out of 10, with the best marks in financing (6.0), fees (7.5) and account management (7.2). Of the big five banks that scored the highest, Bank of Montreal and Scotiabank were tied at 5.0 out of 10, while CIBC was named “the worst big bank for small business,” at 3.0. ATB Financial had the lowest overall score among Canada’s banks, of 2.7.
"Access to affordable financing and banking services is essential for hard-working entrepreneurs, and it's clear that all of the banks should do more to serve small business clients," said CFIB president and CEO Dan Kelly.
It’s the second time since 2009 that CFIB has conducted the survey. In 2009, it also found that credit unions ranked the highest among small and medium-sized businesses. Bank of Montreal and Scotiabank both moved up in the ranks over the past three years, while ATB Financial dropped from 3rd place in the overall rankings to 10th spot.