By Prateek Swain

Immigrants are a vital part of the global economy, contributing to the diversity, innovation, and growth of their host countries. However, they also face unique financial challenges that can affect their well-being and integration.

According to the World Bank, there were 272 million international migrants in 2019, representing 3.5% of the world’s population. Many of these migrants come from developing countries, seeking better opportunities and living conditions in more developed regions.

However, they often encounter barriers and difficulties in accessing and using financial products and services, such as banking, credit, insurance, remittances, and financial education.

Financial Challenges for Immigrants

Some of the common financial challenges that immigrants face include:

Language barriers: Immigrants who do not speak the native language of their host country may have trouble communicating with financial institutions, understanding financial information, and making informed decisions.

Lack of employment opportunities: Immigrants may face discrimination, exploitation, or exclusion in the labor market, resulting in lower income, unstable employment, or underemployment. This can limit their ability to save, invest, or borrow money.

Lack of financial literacy: Immigrants may have low levels of financial knowledge and skills, especially if they come from countries with weak or corrupt financial systems. They may not be aware of the available financial options, the benefits and risks of different products and services, or their rights and responsibilities as consumers.

Lack of access to formal financial services: Immigrants may face legal, regulatory, or institutional barriers to opening bank accounts, obtaining credit cards, sending or receiving money transfers, or buying insurance. They may also face high fees, unfavorable exchange rates, or fraudulent practices from informal or unregulated providers.

Lack of trust in financial institutions: Immigrants may have negative perceptions or experiences with financial institutions in their home or host countries, leading them to distrust or avoid them. They may also prefer to rely on informal or alternative sources of finance, such as family, friends, community networks, or cash.

These financial challenges can have serious consequences for immigrants and their families. They can reduce their economic security, limit their opportunities for social and economic mobility, increase their vulnerability to shocks and emergencies, and hinder their integration into their new society.

How empathy and expertise can help

To address these challenges, financial institutions need to adopt a more empathetic and customer-centric approach to serving immigrant populations. Empathy is the ability to understand and share the feelings of another person. It is a key component of building trust and loyalty with customers. Expertise is the ability to provide high-quality products and services that meet the specific needs and goals of customers. It is a key component of delivering value and satisfaction to customers.

By combining empathy and expertise, financial institutions can create more inclusive and effective financial solutions for immigrants. Some of the benefits of this approach are:

Better customer experience: Empathy can help financial institutions design more user-friendly and accessible products and services for immigrants. Expertise can help financial institutions deliver more reliable and efficient products and services for immigrants.

Better customer retention: Empathy can help financial institutions build stronger relationships with immigrant customers by showing genuine care and concern for their well-being. Expertise can help financial institutions increase customer satisfaction and loyalty by providing consistent quality and value for money.

Better customer acquisition: Empathy can help financial institutions attract more immigrant customers by creating a positive reputation and word-of-mouth among their target market. Expertise can help financial institutions differentiate themselves from competitors by demonstrating superior performance and results.

There are some examples of financial institutions that are applying empathy and expertise to serve immigrant customers better. Some of them are Swadesh, Remitly, Nova Credit, and many more.

Conclusion

Immigrants face unique financial challenges that can affect their well-being and integration. Financial institutions can help them overcome these challenges by adopting a more empathetic and customer-centric approach. By combining empathy and expertise, financial institutions can create more inclusive and effective financial solutions for immigrants. This can result in better customer experience, retention, and acquisition, as well as better financial performance for the institutions themselves. Empathy meets expertise, which is the answer to immigrant financial challenges.

(Author is CEO, Swadesh Inc)