BankingRegionalTalking Shop

Talking Shop: Use a Non-Canadian Bank for Cash Management in Canada?

By April 29, 2021No Comments

Editor’s note: NeuGroup brings members together to answer questions and help each other in a variety of forums, including online communities—one of many benefits of membership. Talking Shop shares valuable insights from these members-only exchanges, anonymously. Send us your responses: [email protected].

Member question: “Has anyone successfully used a non-Canadian bank for its primary cash management bank in Canada? If so, who? If not, why, and which Canadian bank are you using?

  • “Our understanding is we need to have a Canadian bank, but we are struggling to validate if that is still true and why. We currently have many service and technical issues [with our bank].”

Peer answer 1: “My previous company experiences have led me to avoid using [the bank you use] in Canada. They are difficult to work with, don’t use standard BAI or payment formats, etc. These lead to difficult integrations with an ERP or TMS.

  • “On the other hand, I have had good experiences with ScotiaBank, RBC and Bank of Montreal. Only Canadian banks have the portals available to do the provincial tax payments, one reason to continue to use them. Collections are easier with a Canadian bank as your receipts bank.
  • “I am considering a split approach currently. For example, using [one US bank] for electronic payments (as they are a large provider for us globally for this) and leaving receipts, check payments and tax payments at one of our Canadian partner banks.”

Peer answer 2: “While we use a Canadian bank in Canada, we did explore using a non-Canadian bank, but that non-Canadian bank also cleared through the Canadian bank.

  • “From our experience, ordinarily, it wouldn’t be an issue, but if you have any deposits, etc. that you need to track, you get stuck with having to wait for the correspondent bank to respond.”

Peer answer 3: “We’ve gone through a similar transition. We were using [two US banks] for AR and payments. Both operated in Canada through partner banks at the time: TD Bank and RBC.

  • “In 2019, we transitioned to Scotiabank at the request of our local business who was having collections challenges working with [a US bank’s] structure.
  • “With any bank transition comes the usual change management issues, but the business is happy and there are no major pain points from a treasury perspective.”

Other peers use: JPMorgan, RBC and HSBC.

Justin Jones

Author Justin Jones

More posts by Justin Jones