As many developed countries face an ageing demographic, boosting immigration is seen as one solution. How can banks best serve this growing sector?

Joy web portrait

Governments in developed nations are beginning to wake up to the existential threat of a rising average age, which can have an adverse effect on economic growth through labour shortages, leading to higher labour costs, as well as a decline in productivity. According to Statista, Japan had the largest percentage of total population over 65 years in 2021 (29%), followed by Monaco (26%), Italy (24%) and Finland (23%).

According to the latest census data, 65 and older Canadians make up 19% of the population, up from 16.9% at the time of the previous census. And while there are currently 861,000 people aged 85 and older, over the next 25 years (by 2046) the population could triple to almost 2.5 million people.

For many countries such as Canada, immigration will be increasingly essential in driving future economic growth. However, the banking sector in most countries is not geared 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 high street lenders.

In an attempt to understand the experiences and unique challenges of immigrants, Scotiabank conducted research among more than 400 newcomers in Canada. The research revealed that newcomers most commonly experience feeling worried, overwhelmed and confused by their finances, and navigating through the Canadian banking system.

High rental costs, getting the right documentation and identification, signing up for a mobile phone and credit card, and finding employment were identified as the common challenges shortly after arriving in Canada. The research revealed that lack of knowledge of the financial system and cultural norms exposed newcomers to financial fraud, targeting them for internet and phone scams.

The research also revealed that newcomers take a long-term view when it comes to achieving financial success in Canada.

Based on the top five challenges, Scotiabank provided the following advice for newcomers wanting to set themselves up for success beyond the basics:

  • Build up your financial literacy;
  • Know how credit products work and how to start building credit;
  • Get access to online banking;
  • Look at the various credit card options that could be available to you;
  • Beware of fraud, such as phishing.

Importantly, Scotiabank has been developing specific tools and products, as well as advice in many languages, to help immigrants’ economic resilience. Its StartRight programme helps to demystify banking terminology, it provides online tips to assist new customers in getting up to speed with online banking and helps immigrants gain access to credit cards to build a credit score.

Such an approach is going to be increasingly important as immigrant populations expand in response to an ageing demographic. And if traditional banks don’t step into the gap to serve this segment, there are many fintechs that are looking to do just that.

For example, Pillar, a fintech start-up founded by ex-Revolut Ashutosh Bhatt and Adam Lewis, recently raised €15.6m to provide recently arrived immigrants to the UK with lending products. Similarly, Welcome Tech, a digital platform aiming to provide immigrant families in the US with services to help them thrive, has raised $30m to further expand its product offerings.

The so-called niche market is a niche market no more. And the same opportunity can be seen in serving immigrant-founded small and medium-sized enterprises.

Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight

Register to receive the Editor’s blog and in-depth coverage from the banking industry through the weekly e-newsletter.


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Top 1000 2023

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter