Canadian banks are beginning to appreciate that traditional marketing approaches targetted at the mass markets effectively miss the most important part of marketing – achieving sales results.
The trend of pursuing customers in specific ethnic groups may in fact be part of a wider shift in the banking industry away from traditional mass-marketing campaigns
Source: Canadian Banks & Insurance
As we have discussed ad nauseam, old style marketing is dead. One aspect of new marketing is understanding your audience which requires detailed market segmentation, and behavioural understanding.
Canada’s big banks have no doubt taken notice of the success of ING Canada, which is focused on the mortgage market, and Capital One, which concentrates on marketing its credit card.
Mr. Murray says that’s a smart marketing move by the banks. “Banks are realizing there’s not just wealthy people and everybody else,” he says. “There are a lot of other ways to segment the market.”
But new Canadians, are not just another demographic. There are new things to learn, and the competition from foreign banks is fierce.
Despite their potential, ethnic markets still present plenty of challenges. Outside the ranks of Canada’s big banks, others with longer and stronger ties to ethnic groups have spotted the opportunity, too. For instance, global banking giant HSBC’s Canadian subsidiary has profited from its high recognition within the Chinese community, while India’s ICICI Bank has also made inroads into Canada.
But the challenge is an essential one to understand and beat.
They would be foolish not to. Retail banking is a mature industry in Canada with little opportunity to gain market share. Sustained immigration represents a rare growth opportunity that could give banks hundreds of thousands of new customers each year.
Relevance to Bankwatch:
Globalisation is passe, but real. Every country has every nationality within, and they are a large enough group to be close to dominating the marketspace.
tags: new+canadians, niche+marketing, marketing
Bankwatch 
Yes, new immigrants also often need “everything” all at once or at least in a relatively short timespan (checking/savings accounts, credit card, mortgage, car loan, etc.) – so a great cross sell opportunity as well.
However, with new Canadians, it is not just brand Recognition (e.g. HSBC, ICICI, etc) but also product availability. Unlike non-immigrants, new Canadians often want products like overseas cash remittances which are typically not available from Canadian banks (correct me if I am wrong). With companies like xoom providing wholesale solutions for remittances, there is no reason why a Canadian bank could not brand such a service quickly. Price it attractively to attract new Canadians to your bank and then cross sell like crazy! As a bonus, you earn fees on these products.
Good point about the inadequacy of the current product suite to address new Canadians. I would expect to see more alliances popping up to provide those cash remittance services soon.
“Every country has every nationality within, and they are a large enough group to be close to dominating the marketspace.”
Isn’t this far too general to be true? I can think of several large countries where it isn’t.
Which large counties did you have in mind?
In Toronto, the largest city in Canada, original “British Canadians” are in the minority. Hispanics are the largest single growth group in the US. Entire cities in the UK are predominantly of Middle Eastern descent.
Colin:
Your point may be valid in countries whose population is largely comprised of immigrants such as the US, Australia and Canada, where the original inhabitants (the ones who lived there before the British came) were long ago reduced to minority status.
Consider China, India and Russia as examples of large homogenous populations with negligible immigration where your point is not valid. Those three countries contain more than one in every three human beings on the planet.
By the way, which cities in the UK are predominantly of Middle Eastern descent?
Small typo there … I intended Middle Eastern, and South Asian. Also I accept my “dominating” comment is more related to districts and towns, and not countries.
However I still contend that the potential to banks from immigration is not adequatley captured in traditional marketing campaigns, and to ignore the impacts, would be to our peril, due to the magnitude of the opportunity.
Tthe 2001 UK census indicated 7.9% ethnic population. Much of the more recent information is anecdotal. However even from the 2000 era, there are startling stats, that when translated down to individual marketplaces are highly significant in terms of population, and potentially even more significant in terms of banking potential.
2000 examples
– Manchester – 12.9% ethnic
– London – contains 42% of Indians living in Britain
– PREDICTED INDIAN POPULATIONS, 2050 (BBC)
1 India, 1,628m (2)
2 China, 1,437m (1)
3 United States, 420m (3)
4 Indonesia, 308m (4)
5 Nigeria, 307m (9)
Source: PRB (2004 position in brackets)