Canada has a small financial sector. Even when the population is taken into account, it has fewer financial institutions per capita than USA does. As a result, most only consider ‘The Big Five’ to be major financial institutions.
Comprised of the Canadian Imperial Bank of Commerce, the Bank of Montreal, Toronto Dominion Bank, the Bank of Nova Scotia, and the Royal Bank of Canada, they have branches on every main street in the country.
Thanks to their accessibility and brand power, the largest banks in Canada have client bases that add up to a significant percentage of this nation’s population. For example, the Canadian Imperial Bank of Commerce and Toronto Dominion both have 11 million clients in a country of only 36 million people.
This impressive market share for the top banks in Canada virtually assures massive revenues even during tough economic times. In 2017, gross revenues ranged between $11.5 billion for Royal Bank to $36.1 Billion for Toronto Dominion.
While the lack of competition has ensured massive profits for the largest banks in Canada, has it translated into happy customers? Based on what we’ve found – it doesn’t look good. In this report, we’ll address what ordinary Canadians think about the banks they are forced to rely upon.
Bank of Montreal (BMO)
Review sites are a great source when one needs to assess the trustworthiness of a business. While some accounts can be over the top, a common theme tends to emerge as you scroll through them. TrustPilot.com is one of the better sites in this regard, as it evaluates many web and land-based businesses. As a result, most of the Big Five financial institutions have review threads on this consumer-focused site.
Spoiler alert: most comments are uniformly negative. BMO gets an especially bad rap from its customers, as its present Trustpilot score is a dismal 1.7/10.
In short, it appears BMO employees regularly take their customers for granted. An in-branch client relayed a story where they were was made to wait as their personal banker spent inordinate amounts of time entertaining phone calls of a personal nature instead of attending to their concerns.
Another client got a nasty surprise when they tried to deposit a badly-needed government cheque. They found out from the teller that their funds could be held for up to 30 days. This was despite the fact the customer had immediate financial needs to attend to.
The frustration felt by these customers has mounted to the point where some have opted to jump ship. Rather than put up with long cheque holds, inconvenient hours, and poorly designed mobile infrastructure, one reviewer opted to move his account to a credit union that offered superior service.
Toronto Dominion Bank (TD)
There are plenty of customers at Canada’s most profitable bank who have voiced their grievances online. One angry Toronto Dominion customer recounted a story where the bank tried to convince him to sign up for a car insurance package. The coverage was similar to what he had through his current insurer but cost $70/month more.
Another long-time client has also noticed a precipitous decline in the quality of TD’s customer service. After jumping through hoops on the phone to reach a person, he attempted to elevate a complaint to an operator’s supervisor, only to spend 20 minutes on hold before being disconnected.
Bank of Nova Scotia (Scotiabank)
Another common complaint among patrons of Canada’s major banks: excessive fees. One of Scotiabank’s older customers has an account which only allows 24 free transactions per month. Because of their banking needs, they rack up nearly $40/month in service charges; not a small amount when they could be on a fixed income.
In response to these issues, Scotiabank offered them a patronizing $4/month discount for being a senior – a gesture that is more about doing the minimum by still attempting to make as much money as possible.
A business owner also ran into some serious customer service issues (as well as a potential case of insider fraud). One day, he found that $30,000 had been withdrawn from his account without his knowledge.
Attempts to get the branch to investigate fell on deaf ears, as neither tellers nor the manager would let him see the details of the cheque in question. It was only after the police were contacted that corrective action was taken by the branch to refund the money.
This type of customer support and excessive fees have pushed many to use companies like WorldFirst and TransferWise for their money transfer needs.
Royal Bank of Canada (RBC)
Scotiabank isn’t the only bank that allegedly gives business owners a hard time. Another entrepreneur reports that Royal Bank fails to inform its clients of potential charges which could amount to thousands of dollars in lost capital.
This particular business owner, who had moved hundreds of thousands of dollars through their business account in a year, lost about $1,800 to overdraft charges they were never notified about.
RBC also runs into more than its share of customer service issues. One client had a substantial amount of their time wasted waiting to hear back about a loan application. It was only after dropping into their local branch on a weekend that a casual conversation revealed the news the client had been waiting weeks for: the bank couldn’t grant the amount requested.
Canadian Imperial Bank of Commerce (CIBC)
CIBC also has more than a few complaints levelled against it. For instance, one customer went to transfer the balance of an existing credit account onto a CIBC card that was offering a no-interest promotion period. Despite this, they started charging interest anyway, forcing the client to call and write multiple times each month to get the charges reversed.
Another client was faced with the heartbreaking task of closing the accounts of two loved ones who had passed away. The CIBC branch in question failed to follow simple instructions from the estate executor, which caused the process to drag out for weeks. Meanwhile, the comments made by employees to the client were often dismissive and lacking in compassion during an incredibly heart-wrenching time.
It’s not all bad, but Canadian banks need to be better!
There’s a solution today in the form of online banks which are straight up friendlier, more welcoming, are cheaper, have introductory saving rates and are generally speaking less bureaucratic.
Most Canadians have at least an acceptable relationship with their bank. They may run into occasional annoyances, but few run into truly upsetting issues. However, thanks to human nature, nightmare scenarios like the ones described above get reported far more often than great customer service.
The Canadian banking sector has many good things going for it: they are among the most stable in the world, opening hours are getting better all the time, and their profitability means investors are privy to generous dividends. For example, BMO hasn’t missed a dividend payment since 1829.
Still, most of the mentioned incidents shouldn’t ever happen. The biggest problem that the major banks in Canada have lies with customer service, both in-person and on the phone. In addition to improving how they treat their clients, offering products like no-fee chequing accounts and becoming more cost competitive with credit unions will help improve the reputation of the 5 major banks in Canada.