Sep 12 2014

Segmenting Canadian and American Immigrant Prospects

Report  
Number  
340

North American banks continue to be motivated by profit considerations to target the largest immigrant groups. As a result, credit unions have a tremendous opportunity to actively engage those immigrant communities that are routinely ignored by banking institutions.

Bernice Cheung
Senior Consultant
Altus Strategy Group, Inc.
Jaime Christian
Associate
Altus Strategy Group, Inc.
Report Number 340

Executive Summary

Immigrants come from a variety of backgrounds – different countries, ethnicities, education, and experiences. North America has a proud and storied history of welcoming people from all over the world. For financial services, this presents a continual opportunity to engage.

What is the research about?

In both Canada and the United States, immigrants represent an increasingly important potential financial services market, expected to account for 80% of all population growth in Canada by 2031. Drawing on data from surveys of immigrant groups, interviews, and data shared by a handful of credit unions, this report identifies five key market segments, measuring the potential market in terms of membership and value and then laying out the products that each segment needs.

In Canada, the research finds that:

  • New arrivals represent about 250,000 people a year with a market value estimated at $35.1 million (M)
  • Unbanked and underbanked immigrants represent 1 million people with a market value estimated at $178M
  • Renters represent 1 million people with a market value estimated at $156M

In the United States, the research finds that:

  • New arrivals represent about 1.5 million people a year with a market value estimated at $228M
  • Unbanked and underbanked immigrants represent 15.7 million people with a market value estimated at $3.2 billion (B)
  • Renters represent 10.5 million people with a market value estimated at $1.7B

This report aims to segment Canadian and American immigrant populations based on their distinct financial product needs.

What are the credit union implications?

The potential of the immigrant market (or markets) has not gone unnoticed. The banking sectors in both Canada and the United States are working hard to build their market share in the immigrant markets. In both Canada and the United States, banks are compelled by profit considerations to target the largest immigrant groups, both ethnically and geographically. This creates an opening for credit unions, which can leverage their relatively small size to quickly target those groups and locations currently being ignored and create customized marketing and products to meet these immigrants’ unique needs.

This report is sponsored by Credit Union Central of Canada.