With an eye to future revenues and as part of their commitment to local communities, financial institutions in Canada, Australia and the US make significant efforts to attract and help immigrants. Robin Arnfield speaks to a number of leading banks about their strategies for reaching out to this potentially profitable customer segment
The Canadian and Australian governments encourage migration
to stimulate economic growth – quite a contrast with official UK government policy which is to target a reduction in immigration numbers. The US remains an attractive destination for immigrants, despite restrictions on immigration imposed by its current president. A common theme identified by Canadian banks is the need to help immigrants build credit histories by offering credit cards and educating them on how they work. With a credit history, newcomers can then acquire other services such as mobile phone and utilities contracts.
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Immigration
In November 2017, Canadian Immigration Minister Ahmed Hussen said Canada’s target was to receive 300,000 permanent immigrants in 2017. “In the past year, Canada issued over 286,000 work permits to temporary workers,” he said. Of the 296,000 permanent residents who came to Canada in 2016, 156,000 were economic class immigrants.
“Canada is an attractive destination for international students, ranking in the top 10 global international study destinations,” said Hussen. International students add an estimated C$15bn ($11.7bn) a year to Canada’s economy, and many are viewed as ideal candidates for permanent residency. In 2016, over 266,000 individuals held a study permit as an international student. Grant Halverson, CEO of Australian payments consultancy McLean Roche, tells RBI that the Australian banks and major mutuals are all well set up to cater for migrants, tourists and temporary workers.
“Also, the Australian government’s offices are very good at directing migrants to a range of banking services, and the banks and mutuals have branches in some major
countries.” New Zealand is very similar in this respect, as its four major banks are owned by Australian banks.
ATB Financial
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By GlobalDataIn Canada, Alberta Treasury Branches (ATB Financial), owned by the Canadian province of Alberta, offers Smart Start packages to meet the immediate banking and financial needs of recently arrived permanent residents, while setting these customers up for success.
John Tarnowski, executive VP, retail financial services at ATB Financial, tells RBI: “We waive the monthly fees on Unlimited Accounts for a year, and offer a progressive line of credit, which gives people access to more money as they build their credit in Canada. We offer unsecured credit cards to customers with no Canadian credit history, which can be a crucial step for newcomers
“ATB’s promise is to listen, which helps our team members connect with customers in this segment. We work hard to help immigrants understand how banking works in Canada. They could be familiar with entirely different financial systems back home.
“Before we worry about getting them an account or a line of credit, we want to ensure they understand everything, from direct deposits to interest rates to mobile payments.
“Because of our size and diversity, we can be agile in helping customers in their own languages. We’ve identified team members who can help with translating – they are happy to jump into action at a moment’s notice.” Tarnowski adds that ATB’s Global Transfers service charges low fees and allows customers to send money abroad to nearly 50 countries via ATB’s website or mobile app.
CIBC
Jason Wesley, senior consultant, public relations at CIBC, tells RBI that CIBC’s banking packages for newcomers include:
• The Welcome to Canada Banking Package offers permanent immigrants free current accounts for a year plus overdraft protection, a credit card with no deposit or credit history required, a free safety deposit box for a year, a Newcomer Mortgage, and free international transfers via the CIBC Global Money Transfer service;
• CIBC’s international students banking package includes free current accounts for the duration of their studies and access to credit cards with no deposit or credit history required, and
• CIBC’s foreign workers banking package includes free current accounts for a year, credit cards with no deposit or credit history required, access to a Mortgage for Foreign Workers, a Foreign Worker Real Estate Secured Personal Line of Credit, and free CIBC Global Money Transfers.
CIBC’s Canadian branches work with local immigration organisations to help ensure newcomers make a smooth financial transition. The bank offers financial literacy seminars for newcomers to help them understand banking in Canada. CIBC partnered with the Greater Toronto Airports Authority in 2013 to become the
GTAA’s exclusive banking sponsor. “We welcome immigrants at Toronto Pearson International Airport, where we have full-service banking centres and kiosks to assist immigrants and international students arriving at the airport,” Wesley tells RBI.
National Bank of Canada
Souad Ouared, business development manager, financial packages and affinities at National Bank of Canada, explains that in the past it was hard to obtain a credit card as a newcomer with no credit history in Canada.
“However, it’s possible for newcomers to get a National Bank credit card without a credit history, as we recognise the challenge of building credit histories in Canada. Obviously, you need a credit card in order to create a credit history, and it isn’t possible to transfer your credit history from your home country.
“We give non-profit immigration organisations financial support to help newcomers. We hold seminars with these groups about the Canadian banking system, for example explaining how credit and debit cards work.
Ouared adds: “We provide a support programme for permanent and temporary residents before their arrival, when they arrive, and after their arrival.
“They can open a National Bank Canadian dollar account online, and transfer funds to it from their bank in their home country before arriving in Canada. When they arrive in Canada, they must visit a National Bank branch to identify themselves and complete the account-opening process. Their money is already in their account before they come here, so they don’t need to bring cash to open the account. But they can’t apply for credit cards until they arrive here – they’ll get a response about their credit card application in a few days. Under certain conditions, newcomers can apply for mortgages or loans without a credit history.
“Our banking package for newcomers provides three years of benefits, which is equivalent to up to C$600 of savings.
“After newcomers arrive, we offer the Hello Canada Service that provides telephone assistance for one year after they become our client. Hello Canada goes beyond providing help with financial service products to give help with immigration and other issues such as housing or taxation.”
RBC
Ivy Chiu, senior director, newcomer client strategies at Royal Bank of Canada (RBC) highlights RBC’s products for newcomers including the RBC Newcomer Advantage package. This includes:
• Your first credit card: no credit history required and no annual fee on select cards;
• First home in Canada: with an RBC Royal Bank mortgage, no credit history required, and
• First bank account: newcomers can open the RBC No Limit bank account and pay no monthly fees for nine months. With this account, there is no limit to the number of Interac e-Transfers (domestic P2P transfers) you can send or the number of debit card transactions you can make.
“Our focus is to help them settle easily while providing advice and service going beyond a banking perspective.
“As an example of a success story, we recently worked with the community to offer newcomers advice beyond banking. Our RBC team hosted a well-attended employment event for newcomers with the Brampton Multicultural Centre near Toronto.
“This event included one of our RBC recruiters, who was able to explain how people can transfer their skills from overseas to Canada in the financial services field. The feedback from attendees was positive as these newcomers were able to tailor their resume and understand the skills they may need to develop for future employment opportunities.
“Our branches are staffed to reflect the communities in which we work and the languages our clients speak. We have dedicated staff to serve our clients with the capability to provide service in over 200 languages through our branches and Advice Centre.
“Realising that newcomers are getting acclimatised to their life here, we recently opened a first-of-its-kind branch in Brampton, Ontario called The Meeting Place. This branch focuses specifically on helping newcomers with their banking needs and beyond in a comfortable and motivating setting.
“We work closely with several Canadian organisations that specialise in helping newcomers settle into life here. One example is our partnership with ACCES Employment, which helps newcomers find meaningful employment in Canada through seminars focused on everything from pre-arrival tips to job interview prep.”
Scotiabank
Munsif Sheraly, director, multicultural banking at Scotiabank, tells RBI the bank aims to make setting up a financial plan easy and stress-free for newcomers.
“We encourage them to come in and meet an adviser or review the information on our website. Through community-focused relationships and not-for-profit sponsorship initiatives, Scotiabank Multicultural Banking sponsors and runs free financial literacy workshops for newcomers, helping them transition to Canada. Working with partners, we provide settlement and banking basics through Scotiabank-sponsored webinars internationally.
Sheraly notes: “Banking in Canada can be very different for newcomers compared to their home countries. Scotiabank offers a wide range of resources to help newcomers settle here. Many of our advisers come from different backgrounds and share similar experiences to their newcomer customers, so can offer relevant and practical advice.
“At Scotiabank, we pride ourselves in offering tailored solutions and advice. This means we listen to our customers to understand what products and solutions would best meet their needs.
“Our StartRight programme makes the transition to Canada easier by providing financial solutions specially tailored to the newcomer’s journey. Our advisors review the customer’s journey and make recommendations based on that unique story.
“Scotiabank’s relationship with China, specifically with Bank of Beijing, China Everbright Bank and Bank of Xi’an, provides newcomers with a head start in establishing Canadian banking relationships even before arriving in Canada. In November 2017, the programme was optimised to allow Chinese customers to apply online or through our partner banks – whichever is most convenient.”
Scotiabank’s StartRight Program includes:
• A range of credit cards allowing cardholders to earn rewards, cashback, or save with low interest while they build their credit history;
• Financing options to help buy or lease vehicles;
• Mortgages designed specifically for newcomers, and
• Savings and current accounts.
The Scotiabank Student Guaranteed Investment Certificate Programme – a Canadian savings account with a guaranteed interest rate, similar to a term deposit elsewhere – enables students from India, China, the Philippines and Vietnam, to meet the requirements of Immigration, Refugees and Citizenship Canada guidelines. The programme provides access to funds to pay for living expenses while studying in Canada.
Vancity
Catherine Ludgate, manager of community investment at Vancouver credit union Vancity, tells RBI that the mutual does its best for all members of the community including refugees and immigrants who may not have had access to banking back home.
“We believe everyone in our community has the right to access to banking and credit and to save money in a safe institution. Newcomers may come from countries where banking services were untrustworthy.
“To allay fears about banks, our staff provide financial literacy workshops in churches, refugee welcome houses, public libraries, or community centres. These are provided before the refugees might enter a branch to open an account, but we don’t promote our services – just the basics on how taxes and banking work in Canada.
“Newcomers are vulnerable at this point, and we wouldn’t want to sell them products like credit cards that they wouldn’t understand. Nevertheless, these people often end up as our members. They may remember that one of our staff was helpful, and then they’ll come into one of our branches and reconnect with us.
Ludgate adds: “To help immigrants build a Canadian credit history, we offer micro-credit products to help them become bankable. While we offer micro-loans and credit cards, we’re always very cautious and make sure they understand how the loans or credit cards work before we enrol them.
“We offer small personal loans and slightly larger small business loans, for example to help immigrants start a business or recertify their existing qualifications in Canada. We’re not keen on car loans, partly for environmental reasons, but might provide a car loan if a vehicle is essential for a business activity.
“I am disappointed that we don’t reach more newcomers in our service area – the amount of micro-loans we write each year is small compared to the needs.
“Micro-credit holds great promise. We’ve trained our branch staff to underwrite micro-loans as we know these loans can be life-changing to help immigrants get into productive activity.”
HSBC US
Sabine Fichaux, head of international banking for HSBC Bank USA’s Retail Bank and Wealth Management group, tells RBI: “Providing banking to immigrants is challenging due to lack of credit history, lack of US residential address, or temporary addresses that make it difficult to screen or fully identify clients by classical US standards.
“Another issue is affinity – how comfortable are banking staff in handling atypical situations and clients who potentially know nothing at all about the US banking system?
“For example, many countries don’t use credit scores, so new immigrants may not understand why credit scores are an issue or how to build one. It’s important to have staff who are attuned to those clients’ needs and to have information that helps clients navigate the US system from the beginning.
“As an international bank, HSBC is positioned to help, as we have employees who
understand those needs, and we have the right knowledge to help immigrants.
“The economic benefit is that clients who’ve found a solution from HSBC on day one of their arrival in the US, tend to consider HSBC for additional products and services
aligned to their needs.
“With HSBC, you can be eligible for a credit card or a mortgage without an established US credit history, which not only is a huge enabler for our clients, it’s also economically beneficial for HSBC as we are able to build a long-term relationship.
“In the US specifically, visas tend to be awarded to individuals with specialised skills and/or high-level managerial expertise. Those individuals tend to be higher-income earners, or on a trajectory to becoming so.
“International banks are positioned to serve these clients due to their exposure to other markets and cultures. A strong brand and the willingness to help new immigrants at the beginning of their journey in the US, or even before they arrive, as we do at HSBC, is a strong advantage, as is our presence in the local communities to help educate them on
US financial matters.”
Wells Fargo
“Wells Fargo is committed to serve every segment of our diverse communities and build lifelong customer relationships with customers who are recent immigrants to the US,” a bank spokesperson tells RBI.
“We aspire to make everyone feel welcome. One way is by ensuring our branches reflect our communities. In markets with diverse populations, we seek to hire team members who speak the languages, know the cultures and can help meet the needs of our diverse customers in those communities.
“We ensure Wells Fargo team members have the tools and support they need to work with just about any customer – whether they speak English, Spanish, Mandarin or other languages. We provide 24/7 support to customers in multiple languages. Our customer service centre supports customers in English, Spanish and Chinese, and has a language line available that can support almost any language. Each of our 13,000 ATMs feature eight language options.”
