I dislike the opacity around online banking. Online banking is critical for a growing business to save time and money. But the actual features, offered by a bank's online banking, are hidden behind a login screen.
Some useful features are not marketed. The lack of other useful features are also hidden.
I found that the only way to confirm that a financial provider could satisfy my requirements was to sign up, set up accounts, and pay to use the online banking platform.
To find the best services available to me, I became a customer of several major (and a few smaller) banks in Canada. I used them all. Now, I summarize a few ways your business can save money on financial services. So you don't have to spend time and money doing the same thing I did.
A business relies on financial service providers (we'll call them providers from here on), like banks, to be able to use its money. But the modern entrepreneur may find traditional business banking inadequate for their needs－as you'll have noticed if you've wondered why you pay for features, like cheques, that you don't use.
For those just starting out, personal accounts may be good enough, and cheaper. But you'll need to make sure the available features can accommodate a growing business.
We won't focus on table stakes (but let me know, through the Tipline, if you want me to write about that). Instead we'll highlight differentiating features－meaning, features that are available from one provider, but not others.
This way, we'll help some providers stand out from the pack and make your decision easier and more informed.
Convenient credit awareness
You may find that you want to buy credit monitoring to protect against identity theft, of yourself or others. But a similar alert feature comes included with the web app for CIBC credit cards.
We were surprised to discover that CIBC's web app has a feature which alerts us to changes to our credit record, through an integration with Equifax. The growing threat of phishing (Glossary: phishing) makes this feature very useful. The alert could be an early warning when information phished from us is being used to defraud us.
CIBC has a selection of fee-free credit cards, making the cost to you potentially $0. Versus the cost of credit monitoring at $17 per month.
Support (and health benefits)
While progress is happening, the reality is most financial institutions need us to compromise on values. Whether it be money laundering for criminal organizations or holding assets in emission-heavy enterprises, the incumbents all have their hands dirty.
If your business markets itself on certain values, Vancity Business Banking is the way to go. Vancity's structure is designed to support its members (Source: 6) and their communities. During the pandemic, we saw Vancity take the lead in helping its individual and business members get through financial difficulties (Source: 2).
Business banking members also get access to Vancity's Member Health Benefits plan which, our insider sources say, is excellent and what Vancity's own employees also get.
Vancity Business Banking packages start at $8 billed monthly, and give you access to their Health Benefits Plan, which could save you and your employees in health insurance.
Skip the extra fees for foreign currency purchases
Running a modern business means paying for services. And those payments are, sometimes, in a foreign currency. We use an HSBC credit card which has no foreign currency conversion fee (Sources: 1).
Most other payment methods add a 2.5% fee on top of each transaction. This is typically called the foreign currency conversion fee. Look through your credit card's terms to find yours.
For example, we use a German-made email provider. This is mainly because our customers appreciate that emails we receive from them will be protected by some of the strongest data protection laws in the world, better than those in Canada (let us know, through the Tipline if you want us to write about this). For that email service, we are billed in Euros (€).
We also have other foreign currency transactions, because we hunt for products from across the world to satisfy our high expectations in security and innovative features.
HSBC's World Elite Mastercard charges a fee of $150, billed annually. You'll need to weigh that against your projected transaction fees, the cost of travel insurance, and other features that come with the card.
In a nutshell
Need free credit report alerts? CIBC pulls in data from Equifax and can let you know about activity through an email alert.
Need access to a good health benefits plan? Look no further than Vancity, and rest easy knowing that you're also doing business with a supportive and ethical financial partner.
Heavy on foreign currency transactions? HSBC offers one option, of just a few in the Canadian credit card market, which can save you the common 2.5% conversion fee.
You get the most cost-effective banking by using safer practices
Is the password you use for your bank at least 16 characters long, random, and totally different from any other password you use elsewhere?
The time and cost of dealing with fraud can be massively reduced through safer practices. You and your employees should be using a password manager (Glossary: password manager). Like with Canadian financial service providers, we've also done the work of finding and using a password manager that meets our strict criteria.
The sooner you get started with a good password manager (not all password managers are made equal), the less work it is to transition. Every week that you go without a password manager, is another new account with another easy password waiting to be stolen.