Banking on new immigrants for growth


Canada’s population increases a little more than 1.2 per cent per year, and immigration accounts for about two-thirds of that increase. Canada welcomed 271,662 new permanent residents in 2015 in addition to hundreds of thousands of international students and temporary workers, and Statistics Canada projects that immigration will continue to be a key driver of population growth in the future.

All of those people translate into big potential business for banks, and the major banks across Canada are vying for a piece of that booming market.

“The bankable population might be a quarter of that, with four people per household,” says Puneet Mann, Director of Branch Customer Experience & Multicultural Banking at Scotiabank of the total number of new immigrants per year. Sponsoring “financial education” events within a targeted community has been identified as one of the most effective ways to connect with immigrant groups, and can position a bank as a community supporter and build brand trust.

Scotiabank first piloted its newcomer program in 2008. Today the Canadian Bankers Association’s “Banking for Newcomers to Canada” website includes links to eight banks with programs for newcomers, with special features and packages that can include pre-arrival online account set-up and support, pre-approved credit cards, chequing accounts with unlimited monthly transactions or other waived fees, overdraft protection, special savings bonuses or free international money transfers.

Most new immigrants are digitally savvy, Mann says, and many prefer to research and correspond via their mobile devices. However, an in-person, face–to-face interaction is still important for the initial account set-up, “so they can build trust and have all of their questions answered,” she says.

For newcomers with permanent resident status, “it’s about helping them to get their bearings,” she says. “Are they saving for a home, a car, retirement, children’s education? We have seminars for financial literacy, building good credit, budgeting worksheets, a first-time home-buyers seminar,” offered in Spanish and Mandarin as well as English and French.

Newcomers at risk for being scammed

“How newcomers get taken advantage of surprised us—that was the catalyst for all the education we do,” says Mann.

“International students who are required by the government to bring enough money for a year’s living expenses get fraudulent e-mails from people pretending to be Immigration, Refugees and Citizenship Canada telling them to wire money, and the student thinks ‘Oh, this is the government—I’d better do it right away.’ Our financial education seminars have a lot of content teaching them how to avoid fraud and practice good consumer habits,” says Mann.

“We’re a bank and would like customers to take advantage of our services, but we teach that when you first arrive, maybe it’s better to rent than to buy a home right away until you find out where your kids are going to go to school, where your job is, what community you want to live in— guiding them so that they don’t make really big financial commitments that might not be best for them later in life.

“We do a lot of sponsorships, so we have a large CSR [Corporate Social Responsibility] component where we work with organizations—in excess of 40 across the country—where we’re focused on helping newcomers settle, providing things like language training, job-finding assistance, accreditation support,” Mann says. “That allows us to connect directly with newcomers and through our branches all across Canada. The immigration landscape changes constantly—customers and their needs are changing, so we have to be very nimble.”

Over the last five years the division’s growth has been extraordinary, she says, almost 35 per cent. “Because we’re dedicated to this we’re uniquely positioned to get our tentacles out there in the right places. But not only do we want new customers, we’re looking at loyalty – we want them to be happy with Scotiabank and to stay with us.”

Something all banks are working on

“The majority of Canadian banks are thinking about the newcomer experience,” says Shirley Malloy, TD’s Associate Vice President of Acquisition & Sales Management. “Our goal is making sure we’re helping them with their immediate needs when they first come to Canada.”

Malloy points out that often newcomers have needs like buying a car or a house on a much shorter timeline than the average customer.

“So how do we make sure we stay very connected to them and let them know we can serve the full spectrum of their needs beyond a chequing account?,” Malloy asks. “We want to make a personal connection, stay connected and encourage customers to stay connected to us.”

Malloy notes that TD has a fully-staffed 24-hour telephone line offering banking services in 200 languages, and that can also help customers find a branch with someone who speaks their language.

“We have a lot of stories of branch managers who were out in their community partnering with some of the settlement agencies” delivering seminars in a number of languages, she says. “We found that was a great way to make really a strong connection individually with customers and broadly in the community.”

“Education – giving them that help and advice, that’s going to be a continuous trend beyond just traditional banking,” says Malloy.

“At the end of the day there’s nothing in it for us if we push products on a customer that a) they don’t need and b) they don’t understand, because that’s only going to end with that customer not feeling that we cared about them as an individual—and they’re going to go across the street to a competitor.”

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