Commercial Banking in Canada: A Study of the Selection Criteria and Service Expectations of Treasury Officers

Abstract

Four hundred and twenty‐three Canadian financial officers were asked to participate in a national survey of bank selection criteria. One hundred and seventy questionnaires were returned, representing a response rate of 40 per cent. The survey results indicate that Schedule A banks (large, well established) are still used as the primary financial intermediary by 95 per cent of the companies represented in this study. Corporate treasurers, treasury managers, VPs of finance and chief financial officers are responsible for choosing financial intermediaries in 72 per cent of the firms surveyed. Aside from interest rate considerations, efficiency of service, reliability of service, responsiveness of contact person, service delivery and speed of response are the most highly rated decision criteria used by financial officers in their choice of financial intermediaries. Of special interest is the rapid growth in the use of Schedule B banks (small, newly developed) and near banks (trust companies, savings and loan associations). Key factors in this decision seem to hinge upon lower borrowing rates and higher interest rates on deposits as well as better overall customer service. In spite of the trend of banks towards “one‐stop‐banking centres”, financial officers tend to disagree that they would consider one location for their banking, trust and other financial needs.