Sanjay Sharma
Sanjay Sharma is a Senior Financial Services Analyst for the Canadian region at Mintel. He researches and writes reports on the Canadian financial services industry.

Many newcomers have difficulty accessing credit in their first few years because their credit history may not be recognized in Canada. This can increase the likelihood of accessing expensive alternative financial services to borrow money. Diverse cultural and religious beliefs, such as the Muslim prohibition against receiving or paying interest on money, can also make it challenging for some newcomers to obtain financial products and services that meet their needs. Offering credit through a credit card or a line of credit is an important first step in building the financial confidence of ethnic Canadians, particularly those without a strong credit history in the country.

New Canadians (defined as those living in Canada for less than five years) are looking for long-term banking relationships as they establish roots in a new country. Recommendations are one of the most important factors for new Canadians when it comes to choosing their first bank, according to Mintel research on multicultural marketing for financial services. Given their unfamiliarity with the Canadian banking system, it is not surprising to see reliance on suggestions from friends or family. With the importance of recommendations to new Canadians, incentivising current customers to refer their friends and family can resonate.

A branch can humanize the finance experience

Four in five new Canadians look for a local branch as they prefer to speak to a human while familiarizing themselves with the Canadian financial system. They are more likely to view branch visits as a way to cement a long-term relationship. More than three-quarters of non-native English speakers would prefer to have branch staff that speaks their native language, according to Mintel research on multicultural marketing for financial services.

With many new Canadians likely feeling overwhelmed in unfamiliar surroundings, having branch employees’ converse in their language is a source of comfort and an excellent way to forge long-term relationships. These conversations may also help in overcoming invisible barriers that could be bothering new Canadians (family restrictions, religious prohibitions against interest, etc).

Four in five new Canadians look for a local branch as they prefer to speak to a human while familiarizing themselves with the Canadian financial system.

Helping new Canadians overcome language barriers

Many newcomers experience a language barrier when seeking employment or accessing financial information and services. Some newcomers may be from countries that do not have comparable financial products and services and do not have comparable words in their language to accurately translate Canadian financial terms and concepts. Newcomers with sufficient language and literacy skills, such as their Canadian-born counterparts, may find it difficult to understand the technical language used in letters received from the Canada Revenue Agency and financial institutions or used in contracts. Plain language and multilingual financial communication materials are important in reducing some of these barriers. While many banks offer collateral in multiple languages, perhaps a one-on-one information session in their native languages with personal bankers might resonate more.

What we think

New Canadians are similar to the overall population in their inclination to favour Canadian banks with local branches when choosing a financial institution. Although some new Canadians decide their bank before they land in Canada, most do not, relying on recommendations from friends and family. As they settle into a new country, there may be visible and invisible barriers to overcome with regard to finances. Visible barriers include language difficulties and navigating a new financial system. Invisible barriers can include trust, religious issues and challenges for women and dependent seniors. Financial institutions need to help them overcome these barriers with sensitivity and help through human and other resources.