Canadian immigrants face banking challenges—presenting banks with a growth opportunity

The trend: New immigrants to Canada often feel shut out of the traditional financial system, per the Canadian Broadcasting Corporation. They face barriers like lack of credit history, verification issues, and insufficient knowledge of the financial system. They therefore find it difficult to receive payments or pay for everyday goods and services.

There are close to 400,000 new immigrants each year, per the Financial Post, and a significant proportion of banks’ new customers stem from immigration, per The Globe and Mail. Financial services providers that can help resolve these pain points will have a competitive advantage in gaining business from this community. As a result, all of Canada’s largest banks offer specialized programs for new immigrants, per the government’s official website.

New competitors: Because of the growth opportunities immigrants represent, fintech rivals have started to target their business. For example, Beacon—which uses Bank of Montreal’s (BMO’s) services—aims to “simplify financial transactions for immigrants” with its products, per a press release. It offers:

• Easy, international  money transfers, such as the Beacon Remit service to India, addressing a gap not typically prioritized by traditional newcomer programs.
• A comprehensive all-in-one super app combining financial tools, resources, and guides tailored to help immigrants settle and build their futures, going beyond the standard products offered by major banks.
• Trust, via emphasis on Beacon’s relationship with BMO to enhance confidence among these potential customers.

What this means for banks: Canada has faced a rise in negative sentiment around immigration as unemployment has risen. In response, some banks have spoken out.

• Canadian Imperial Bank of Commerce CEO Victor Dodig emphasized that immigrants are the "lifeblood" of Canada and need broad support and fair treatment, per the Financial Post.

As a result, banks should market products and services that solve immigrants’ biggest financial pain points. They must use a welcoming and compassionate tone and ensure communications are accessible in immigrants’ languages.

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