Canadian banks look to newcomers as key source of client growth
October 5, 2022
By Victoria News |
Canada is banking on newcomers to help keep the economy humming along, while banks themselves are eying the hundreds of thousands of people coming to the country every year as a key source of client growth.
Those efforts have been growing along with the number of newcomers, including more efforts to secure people as customers before they even arrive in Canada.
“We’re seeing it as a big focus across all categories of banks, not just the big banks,” said Abhishek Sinha, banking transformation leader at EY Canada.
“Whether you talk to the Big Five or you talk to the next tier after that, or even the credit union segment, newcomers and penetrating that market segment is super important.”
The efforts come as Canada has been welcoming record numbers of newcomers, with an aim to bring in 432,000 permanent residents this year, rising to 451,000 by 2024, while the first half of the 2010s saw the average number of newcomers sit around 260,000.
The segment, which the federal government says accounts for almost all of Canada’s labour force growth and roughly three quarters of population growth, has pushed banks to create partnerships like one recently announced between RBC and ICICI Bank, India’s largest.
“With immigration levels expected to rise to record levels, we’ve announced a collaboration agreement with ICICI Bank Canada,” said RBC chief executive Dave McKay on an analyst call in August.
Some student visa classes require students to put down cash deposits, and the program allows those to seamlessly be transferred to an RBC account in Canada. The program is starting with students but RBC wants to later expand the pipeline of account transfers to a wider field.
“As part of our agreement, ICICI Bank Canada will refer all newcomer clients to RBC over time, making it easier for them to open a bank account upon arrival,” said McKay.