Governments in developed countries are beginning to realize the existential threat of a rising average age, which can have a negative effect on economic growth through labor shortages, leading to higher labor costs higher labor costs, as well as lower productivity. According to Statista, Japan had the highest percentage of the total population over 65 in 2021 (29%), followed by Monaco (26%), Italy (24%) and Finland (23%). ).
According to the latest census data, Canadians aged 65 and over represent 19% of the population, compared to 16.9% at the time of the previous census. And although there are currently 861,000 people aged 85 and over, over the next 25 years (by 2046) the population could triple to almost 2.5 million people.
For many countries like Canada, immigration will be increasingly critical to driving future economic growth. However, the banking sector in most countries is not designed to serve this segment of the population. Accessing even basic financial services can be a major challenge for many newcomers, who may lack language and financial skills, and who are considered a niche market for many street lenders.
To understand the unique experiences and challenges of immigrants, Scotiabank conducted research with more than 400 newcomers to Canada. Research found that newcomers most often feel worried, overwhelmed and confused about their finances and navigate the Canadian banking system.
High rental costs, getting the right documents and IDs, buying a mobile phone and credit card, and finding a job were identified as common challenges soon after. their arrival in Canada. Research has found that lack of knowledge of the financial system and cultural norms exposes newcomers to financial fraud, targeting them for internet and telephone scams.
The research also found that newcomers take a long-term view when it comes to financial success in Canada.
Based on the top five challenges, Scotiabank has provided the following advice for newcomers who want to prepare for success beyond the basics:
- Develop your financial literacy;
- Know how credit products work and how to start building credit;
- Access online banking services;
- Examine the different credit card options that may be available to you;
- Beware of fraud, such as phishing.
Importantly, Scotiabank has developed specific tools and products, as well as guidance in many languages, to help immigrants’ economic resilience. Its StartRight program helps demystify banking terminology, provides online counseling to help new customers learn about online banking, and helps immigrants access credit cards to build a credit score.
Such an approach will become increasingly important as immigrant populations increase in response to aging demographics. And while traditional banks aren’t closing the gap to serve this segment, many fintechs are looking to do just that.
For example, Pillar, a fintech start-up founded by ex-Revoluts Ashutosh Bhatt and Adam Lewis, recently raised €15.6 million to provide recent immigrants to the UK with loan products. Similarly, Welcome Tech, a digital platform aimed at providing immigrant families in the United States with services to help them thrive, raised $30 million to further expand its product offering.
The so-called niche market is no longer a niche market. And the same opportunity can be seen serving small and medium-sized businesses founded by immigrants.
Joy Macknight is the editor of The banker. Follow her on Twitter @joymacknight
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