As Renu Sodhi hands out a pair of complimentary green bangles and balloons to yet another visitor at a South Asian festival in Toronto, the bank manager hopes those promotional goodies will go a long way towards building awareness about her bank.

"We are very active within the community and we want to build better relationships," says the TD Financial Group employee.

Sodhi says that as a lead sponsor for the Gerrard India Festival, the bank earns good mileage from its investment — this year, almost 175,000 visitors attended the two-day festival.

TD isn't the only bank "building relationships" in Canada's growing ethnic communities. Almost every top bank in Canada has trained its eyes on groups such as the South Asian and Chinese communities in recent months. These two groups combined will number more than four million by 2017, according to figures from Statistics Canada — more than 12 per cent of the Canadian population.

Moreover, Statistics Canada says that in a decade, half of all visible minorities in the country will be Chinese or South Asian, with Toronto, Vancouver and Montreal predicted to house more than 75 per cent of all visible minorities.

Numbers like that are making bankers such as TD's Serge Lapointe, vice-president of marketing, sit up and take notice. He says immigrants from Asia, for example, already constitute a big percentage of total migrants to Canada, and thus have become a market worth paying specific attention to if a company is looking to expand its customer base.

Last year, newcomers from China accounted for 13 per cent of all immigration to Canada, while those from India, the Philippines and Pakistan constituted 12, 7 and 4.9 per cent respectively, according to Citizenship and Immigration Canada.

Kathy Cheng, associate vice-president of Ipsos-Reid, says immigration is very important for businesses, because according to recent statistics, it "represents two-thirds of all population growth in the country and it's likely to be the only source of growth until 2030."

Investing patterns

Apart from the numbers, says Cheng, the unique traits of investing, saving and the cultural makeup of these two big communities — Chinese and South Asian — are such that financial institutions are one of the industries most likely to benefit from their business.

For instance, she says Ipsos-Reid's research revealed that education is one of the top five priorities for people in these two ethnic communities. In contrast, education did not figure into the top five priorities for the rest of the general Canadian population in the company's research.

"These communities are [then] more likely to buy into RESPs for their children," Cheng said.

Knowing the value these ethnic groups attach to education, RBC Financial Group has introduced seven new Canadian high school scholarships valued at $2,000 each for newcomers across the country.

And "to better understand" the unique needs of the new immigrant, says RBC's Mark Whitmell, director of cultural markets, the bank commissioned its own community study in September.

Whitmell says that when these newcomers were asked what made them feel "truly settled" in Canada, there were marked differences in the responses. Thirty-one per cent of South Asian new immigrants said the key factor is owning a home. Chinese new immigrants cited having a good job (43 per cent) as the No. 1 indicator of being "settled" in their new home country.

Drawing insights from these findings, Whitmell says his company has added more content to its website, and now offers clients more advice on how to buy or sell a house in Canada — as well as details about how to qualify for a mortgage.

Going one step further — to attract business from members of the Chinese community even before they land on Canadian soil — RBC is running advertisements in the in-flight magazines aboard Chinese aircraft to generate awareness about the bank for newcomers traveling to Canada.

TD Bank's Lapointe says his bank's community involvement, word-of-mouth publicity, and its own diverse hiring policies and strategic marketing have all resulted in what he terms a huge equity and share among the ethnic communities. According to a recent Solutions Research Group syndicated survey, of all the top six banks TD has a 43 per cent market share within Canada's South Asian population and a 29 per cent market share within the Chinese community

The SRG survey states that the big six banks account for 84 per cent of all primary financial institution relationships among the major ethnic groups, surveyed in Toronto Vancouver and Montreal. Other domestic banks, credit unions and foreign-owned banks' subsidiaries account for the rest.

Also, banks are coming to understand that hiring people from within ethnic communities makes great business sense.

To understand their needs better, the U.S based State Farm now has actively started hiring many more Chinese claim adjusters, for example. "Speaking in their language [Cantonese or Mandarin] provides a very big comfort zone for them as they are able to effectively communicate their needs better," says Andrew Lau, a Canadian State Farm Insurance agent in Toronto.

Ipsos' Cheng, citing research, says many newcomers in the Chinese community revealed that when it comes to their financial or health needs, they'd be able to communicate their thoughts better and even trust the person a tad more if he or she spoke their language.

"A lot of the understanding of the [ethnic] communities comes from our staff that belong to those communities," says Winnie Leong, district vice-president at ScotiaBank in Vancouver.

In charge of several branches there, Leong says she has six focus groups consisting of the staff from various ethnic communities who regularly meet and discuss key events or festivals important to the community, while also discussing other key strategies.

For instance, Leong says the bank knows that many Asians have a business-oriented or entrepreneurial mindset, so it recently ran ads in the Sing Tao and Ming Pao papers in Vancouver and Toronto advertising a small business startup contest which could earn the winners a Sony laptop.

Growing communities

While the Filipino and the Korean community are comparatively small in Canada now, they are pegged to grow in the near future. The former will reach the half a million mark by 2017, states Statistics Canada.

To build equity within the Filipino community, Scotia Bank sponsored the Mabuhay Philippines Toronto Summer Festival at the Metro Convention Centre this year.

Understanding these communities' unique needs is important in order for financial institutions to figure out more effective strategies to address them. For instance, one unique trait among the South Asian and Chinese community is that they do not actively subscribe to the credit card culture, says Cheng.

"[Many] mainstream Canadians grow up in the debt culture — one needs to borrow — but the Chinese and South Asian communities tend not to carry a balance," she says. "In that, they are less likely to use the credit card as a borrowing product."

She adds, "even if they borrow, they will pay it back very soon or immediately. For most [of these communities], a credit card is for building a credit history in the country or for urgent needs."

With all these different characteristics mixed into the Canadian consumer population, Solution Research Group's president Kaan Yigit says one-size-fits-all marketing strategies are becoming less effective. He says it's becoming crucial for bankers and businesses to devise separate marketing strategies for specific target communities.

Lau, says the benefits of doing so are enormous. "These new consumers need a bit of hand-holding at first, as they are new to the country, and if one becomes their friend and adviser the chances are you are better likely to succeed with them. But first you must gain their trust."

For instance, Lau says, many who come into his office in Scarborough, Ont., want a savings component built into their life insurance policy (Canadians of Chinese and South Asian origin, say bankers, generally have a higher propensity to save than the general population). But Lau says he makes sure he tells them that the premiums will rise for this type of plan, and that one shouldn't start paying high premiums at the very onset of a policy.

Yigit says building a good business relationship with newcomers to the country is crucial, because once these customers choose a bank for their primary transactions it could lead to bigger things for the bank in the future as they mature and look for things such as a loan for a car or house, or to spend on renovations.

As for TD's Sodhi, she says she's seen the results of personal interaction through her job as a manager in Toronto, and going the extra mile for the customer is paying off in the long run.

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