Where Banks Fall Short

Three out of four Canadian bank customers say their primary bank fails to meet their expectations. That’s according to a recent survey by FIS, whose findings identify key areas where banks must improve.

Banks get high marks for things like in-person service, convenience and online connectivity, but fall short in terms of fairness of fees, following through on promises, rewarding loyalty and transparency of pricing. These shortcomings are something to heed for all bank challengers, including mortgage brokers and credit unions.


As a whole, Canadian banks got a 76 out of 100 satisfaction rating (with 100 being the goal). Credit unions fared notably better, scoring 88 out of 100.

Those most happy with banks tend to be older (45-64 years old), while less satisfied consumers tend to be younger (35-44). That younger demographic does 30% more transactions at alternative financial service providers.

Based on FIS findings, banks have three key opportunities to build consumer trust. These are all areas where they underperform:

  • Providing easy-to-understand pricing and terms
  • Following through on promises (although FIS’s report was a bit vague on this point)
  • Being fully transparent on fees and charges

Many brokers and credit unions (but far from all), already do a banner job in these three areas by:

  • Not posting unrealistically high mortgage rates
    • Leading the pack are competitive mortgage brokers and forward-thinking lenders like Meridian Credit Union, all of whom openly advertise better-than-average pricing on their websites
    • By contrast, banks typically advertise above-market posted or special-offer rates, forcing customers to negotiate to obtain competitive discounts. As a case in point, only one of the Big 6 Banks (BMO) is advertising a reasonable 5-year fixed rate (2.59%) at the time of this story, and that’s for a restricted mortgage.
  • Offering products with fair prepayment charges
    • Versus painful bank penalties based on “discounts” from artificially high posted rates
    • Note: Some brokers sell deeply discounted rates with penalties that are just as bad as the banks, if not worse, but any broker worth his/her salt unambiguously explains the tradeoff of those products, while simultaneously offering less restrictive alternatives.

As is visible in the chart above, reliability and security are also crucial to bank customers. Virtually all serious bank challengers also build those elements into their marketing playbooks.

Side Note: FIS’s survey included 1,000 financial decision-makers in Canada, aged 18-75, who have a chequing account, or equivalent, with a financial institution.

  1. I think your site needs to re-name yourself broker trends, you’ve really veered off course….and are of course literally owned by the brokers

    1. Hey there Jimmy, It appears you’ve taken no issue with the facts themselves, suggesting CMT’s affiliation alone undermines this story. That’s a bit fallacious, if one might say so. Incidentally, the story also includes positive points about CUs. Once you decide on our new name, perhaps you’ll want to include “Credit Unions” in the title as well.


      1. Rob, I have many issues with what your wrote:

        First, the first sentence of this article is nowhere to be found in the published survey results. In fact, it seems that most of what you wrote just jumps to conclusions that suit you. Nowhere does it say that 3 in 4 Canadian bank customers are not having their expectations met. This is talked about on a global level, which also included your beloved credit unions. In fact, the survey finds that all FI’s are failing to meet customer expectations globally. It states that globally, credit unions aren’t failing to meet expectations by as much banks, but still are none the less.

        Secondly, once you have finished with your diatribe about how banks are bad and credit unions are good, you then bring mortgage brokers into the discussion, which if you’d read the survey, you would know are not discussed in any way. You then state that they are great at meeting expectations for all of the things that all financial institutions globally showed as falling short…..with no data to pack up your assertion to boot.

        So yes, i am very comfortable in saying that you are not writing about mortgage trends.

        1. You’re way off base on this one, Jimmy.

          FIS’s report prominently states that “75% of banked consumers in Canada believe bank performance falls below their expectations.” FIS goes on to provide various data supporting this finding. It appears you did not read the full report.

          Furthermore, and contrary to your second incorrect assumption, none of us have a general belief that “banks are bad.” Quite the opposite. We’re simply not averse to saying that banks fall short in different areas relative to brokers and credit unions. For that matter, we’d be the first to admit that banks are generally superior to non-bank mortgage providers in various ways (one-stop financial services, branch availability, security, $1 million+ loans, etc.).

          The reality is, banks, brokers and credit unions are all important players in the mortgage market. Comparing the way they do business is to be expected from a publication that covers the mortgage industry, regardless of what a survey includes or doesn’t include. There are no claims in the article that we would not stand behind, and those observations (e.g., that banks base penalties on posted rate discounts, that they advertise higher than true rates, and so on) are not exactly wild assertions that require scientific studies.

          As a general comment, you have a history of being pretty critical about the site. That’s your prerogative and we never have a problem with people keeping us on our toes. But in the future, I would humbly suggest that it’s better to walk to your conclusions than jump to them.


          P.S. With respect to your question about why all your posts aren’t showing up, note that when you post under multiple aliases from different invalidated email addresses, the system thinks you’re trying to pretend to be different people commenting on the same topic. It then flags your posts as spam. It’s best if you post under a consistent pseudonym and email address.

  2. I think there is common agreement on a few simple points. I know of no one who has not complained that fee increases at banks just come out of nowhere and are ALWAYS higher than inflationary trends. I also have observed a universal adverse reaction to always having to ask a bank for a better deal before you get it. I understand this is just commerce but it is hard to watch a endless array of bank commercials telling us how much they want to help us and then finding out the relationship is the same as with your cell phone company: you only get the best offer when you quit.

    It is hard to connect the infinitely helpful customer service folks with the desire to see the average customer pay more than the relentless negotiator. we understand this dynamic on a used car lot but not at a financial institution that ends
    every conversation with “is there anything else I can help you with today” Naturally I understand the business model but I think the hypocrisy gets to people eventually.

  3. Despite the propaganda, the Canadian banking system sucks. Well, all reserve banking is an unfair system with the bank owners (not shareholders, but the CEO and large percentage owners) the new aristocracy. For thousands of years, the main resource was land, whoever owned the land, controlled everything. Our economy is now greatly diversified, but is ultimately dependent on currency and finance, which is more and more intertwined globally. Banks have access to the National Reserve Banks for cheap money, which they then lend at higher rates. Give me $1,000,000,000 at 0.75% interest and I will look like a genius lending out in mortgages at 2%.
    Although I hope it doesn’t happen, I am really curious what would happen if the Canadian Real-Estate marked dropped 20-30%, I would expect that the big Canadian banks would be in a similar situation to what happened in U.S.. I also think that the Bank of Canada would act fast and pump more low interest money in the economy. For all those who think that interest rates are going to shoot up, dream on! I am looking forward to the times when I will get paid to take a mortgage out like in some European countries.
    But specifically, the Canadian system lacks true competition – I really hope that CU and new banks will appear more and more.
    Rant over!

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