Canadian banks reach overseas to gain immigrant consumers.
By Joanne Lee-Young
Canwest News Service
February 16, 2009
VANCOUVER – Big banks in Canada promote all kinds of sports, but they have more naturally stuck to snow and ice events, or golf and tennis, even rodeos. More recently, however, RBC and Scotiabank have been vying to help more kids in Canada play cricket, that wildly popular game of more tropical and distant climes such as India, Pakistan, and Sri Lanka.
The impact has been significant, according to Ben Sennik, president of Cricket Canada: “Previously, we would just be able to get a small business like a single real estate or insurance agent to sponsor one match at a time here and there.”
For the banks, the move is much more than just a niche nod.
All of the major players are fixated on several Statistics Canada predictions: One, that by 2017, one-half of the people living in Toronto and Vancouver will identify themselves as a visible minority. Two, that by 2011, when baby boomers begin exiting the workforce in large numbers, immigrants will account for 100 per cent of the growth to our population and labour force. And three, that South Asian and Chinese communities will, in combination, number just under four million in 2017, or around 12 per cent of the total population.
Scotiabank has released new research about how Chinese consumers in Canada make investments. It said that some 56 per cent hold retirement savings plans. So-called “established Chinese consumers, those who have been in Canada more than 10 years,” are more likely to have RSPs (59 per cent) than Chinese consumers that are more recent immigrants (48 per cent).
A week earlier, the bank unveiled similar information about its South Asian consumers. About 44 per cent of them have RSP investments, compared to 59 per cent of mainstream Canadians. More established South Asian consumers (53 per cent) were likely to have RSPs, versus newer immigrants (31 per cent.)
These findings are the latest in what has become a constant barrage of statistics about how minority consumers spend and save their money. Aside from all the major banks, big and small research firms and ethnic media reporters have “all done quite a bit of work in this area,” said Doris Chang, Vancouver- based vice-president for new Canadian markets at BMO. “We have a lot of information.”
What is different now, said Chang, is that instead of just prodding these immigrant consumers to fit a Canadian style of financial services, the research is pushing banks to engage them in ways that are familiar and comfortable to them.
“We are becoming more sophisticated with our resources,” said Chang. As an example, she said that consumers in China “use the Internet an average of 2.2 hours a day, compared to people here at 1.9 hours. So it's vital to try and reach Chinese immigrants via websites.”
In another development, banks are physically heading overseas to understand these immigrants before they even arrive in Canada.
“We are 'onboarding' them over there,” said Rania Llewellyn, vice-president of multicultural banking at Scotiabank. “You need to understand where they are coming from, their approach to investments and their experience with banks. You have to segment by country because each has a different banking system, political situation, and [state of] economic stability. Also, the products available in each country are very different. In some markets, for example, credit cards are new concepts and cheques are not used as much.”
Kathy Cheng, a Toronto-based researcher at The Environics Group, echoes these thoughts. To glean information for banks about Indian and Chinese immigrant consumers in Canada, she has conducted many focus groups in Vancouver and Toronto. Next, however, she will take her sessions to Beijing and Shanghai in China, and Delhi and Ludian in India.
“Banks want to catch [these consumers] and find out as much information about them as early as possible, before they immigrate,” said Cheng. “It's not just dividing between new and more established immigrants, but also their habits and preferences as pre-immigrants.”
Also to this end, Canadian banks have been competing with each other to set up offices in these markets, tap partnerships with local banks there and sponsor workshops run by settlement agencies. Beyond peddling bank accounts and products, they are getting into the business of offering families information about schools in Canada, and teaching businesspeople work and social etiquette courses.
“No matter how connected they are back home, when they come here, everything is new,” said Chang of BMO. “It's important to get them to trust us.”
Unfortunately, the road to securing this connection is littered with cross- cultural pitfalls of all kinds, even in the very first steps.
Even though banks say they are able to navigate these by recruiting staff from the same immigrant segments they hope to court – be it Chinese or Indian, new or established Canadian – their results have been imperfect.
One common mistake, according to Huiping Iler of wintranslation.com, which does some marketing work for Canadian banks, is literal word-for-word translation.
“Often, translating in this way either doesn't make sense, or even worse, it offends,” said Iler. She cited one website where the phrase “living in Canada” was translated literally so that, in Chinese, it actually reads “alive in Canada.”
In another example, Iler said that some banks aren't taking into account more complex layout requirements when it comes to typesetting Asian languages. She pointed to one bank's webpage, where “the spacing of text is wrong, so the text looks unusually far apart. Unfortunately, without professional typesetting, this makes one of the top banks in Canada look somewhat unprofessional.”