Early bird gets the loyalty: Newcomers stick with their first bank choice for the long haul

Understanding newcomers and how to reach them effectively is becoming a more important priority for most organizations. SRG is now tracking this fast-growing population and their banking habits and priorities annually via its Newcomers to Canada syndicated study. We identified five key insights for those looking to reach this population segment more effectively in 2024 based on our most recent study.

  1. Newcomers are young, educated, and family-oriented – tailored financial services are essential. The demographic profile of newcomers is predominantly young and educated, many with university degrees and an average age of 36 years, painting the picture of a population in the prime of their work and family life. SRG’s study finds that newcomers are 65% more likely to be living in family households with children under 18, compared to the broader Canadian population.
  2. One of their key concerns is navigating a new and unfamiliar financial landscape – guidance and accessibility are valued. Upon arrival, newcomers focus on establishing fundamental aspects of their new life, with priorities like opening a Canadian bank account, securing housing, and obtaining wireless connectivity. Their major top-of-mind concerns include the high cost of living, affordable housing challenges, and finding stable employment, reflecting the practical aspects of starting a new life in Canada. The implication is a significant opportunity for financial institutions to provide the necessary guidance and accessible services (including explanation of their products and services in plain language) to support newcomers in these initial, crucial steps.
  3. They establish bank accounts swiftly and remain loyal – getting to them early makes a difference. An impressive 81% of newcomers establish a bank account within their first month in Canada, illustrating the essential role of banking services in their settlement. Major banks, especially the ‘Big Five,’ hold 85% of primary financial relationships, with CIBC leading, followed by TD and RBC. 85% of newcomers continue to use their first Canadian bank as their primary financial institution five years after arriving in Canada, emphasizing the significance of initial banking experiences.
  4. But, they are open to pitches from other banks. Despite strong initial loyalty, newcomers show openness to new banking relationships, with 84% expressing willingness to consider additional banking options with the right offer and product. This reflects a vibrant and competitive market for financial services within this demographic.
  5. Newcomers to Canada use a limited set of financial products in the early days. Credit cards and savings or chequing accounts are the most common. Seven-in-ten (71%) newcomers have a credit card, and 68% have a savings or chequing account, with the majority of these products held at their primary financial institution. Other notable financial products include TFSAs (22%), car loans (17%), RRSPs (16%), personal lines of credit (16%), and mortgages (16%). Loyalty programs such as PC Optimum, Costco Rewards, and Scene+ are also popular among newcomers but with lower-than-average penetration in the early days, despite newcomers’ value-seeking behaviour in shopping and banking.

Technical: Newcomers to Canada is an independent syndicated research study exploring consumer behaviours, social attitudes of recent newcomers to Canada. It is conducted and published by Solutions Research Group Consultants Inc. (SRG). This is the fifth edition of the study since 2017; The 2023 research was conducted in July 2023 and is based on a sample of 828 newcomers from parts of the world representing the vast majority of all newcomers to Canada. Those interviewed included newcomers in the past five years from China, South Asia, The Philippines, North Africa, West Asia and the Middle East, as well as Latin and Central America. Detailed interviews were conducted in Vancouver, Edmonton, Calgary, Toronto, and Montreal in multiple languages. For more information, contact robin@srgnet.com