Why is Financial Services underserving an audience worth billions?

Here’s an interesting situation: financial services companies largely ignore a well-funded audience that has an incredible long-term entrepreneurial track record, all because this audience didn’t grow up under the US financial structure. I’m talking about a group of which I am a member, namely international students in particular, and immigrants in general.

International students bring billions of dollars into the US economy every year and are also much more likely to start a business. According to the National Foundation for American Policy, about 55% of America’s startup companies valued at more than $1 billion were started by immigrants. Moreover, 25% of billion-dollar startup companies have a founder who first came to the United States as an international student.

These statistics highlight the vital role immigrants and international students play in the US economy and should be a wake-up call to financial institutions.

Because the reality is international students and immigrants are routinely ignored or underserviced by US financial services companies.

I came to the US as an international student and had to figure out all financial issues on my own, from getting a social security number and driver’s license, to how to do taxes, and even basic things like opening a bank account and getting a credit card. One thing I did not realize for a long time was that financial services do not cater to international students and other immigrants. This results in a range of inconveniences like not being able to open bank accounts online since our documents need to be verified, to having to fill out special forms each year disclosing exactly how many days we spent in the United States. There is also a lack of options for sending money to our home countries and managing accounts while travelling abroad.

Legalities aside, I also did not see a lot of marketing efforts from financial institutions, except for some banks that get booths at international student orientations at colleges, which led to the impression that I, and my dollars, were not a priority to most US banks.

The international student and immigrant population needs catered financial services and an investment in long-term relationship building. So, how can financial services better service immigrants and international students?

1. Go beyond student orientation: Just showing up to international student orientations at colleges is not enough. Banks need to provide more support in the sign-up process as well as guidance to parents and students about using their funds, credit cards, tax disclosures and other documents. Online trainings and modules can help a confused international student get through the process much faster.
2. Look to the long term:  Some international students and immigrants may be in the US for a short stint, but financial services should focus on building long term relationships with them. Whether that means special offerings for those who move back home to have access to their accounts or offering personalized services for when they need to close accounts or transfer balances internationally. Having personal bankers, FAQ pages, and online tools that cater to these unique situations can be a game changer in establishing a deeper connection with the customer.
3. Merge the Personal, Business and Investments: Immigrants working in STEM fields are some of the highest earners and want to invest the money they make. By merging personal banking services with investment banking services, financial institutes can provide them with an easy to manage solution. When international students or immigrants start a business, they will also need business banking services. While customers open business bank accounts and credit cards to separate their personal and work expenses, they prefer having one login experience for it. Financial services need to integrate all business, investment, and personal services (which will help non-immigrant business owners, too.)
4. Credit scores: Starting over in a new country is hard enough and on top of the blank slate you get, immigrants and international students need to start their credit journeys all over again. While there is no regulation that allows credit scores to be transferred internationally (which needs to be changed), banks can make the credit card process easier by having cards for new entrants to the US and not just young students with no credit history. It should consider their foreign bank account holdings and income level in the United States from the get-go, so they are not stuck with lower credit limits because of no credit history.

Working with international students and immigrants would not only reach a significant group in the United States. It would also build long-term relationships with a population that is high-earning, more likely to start businesses, and will promote your financial institutions to their networks and family. And that is a win for all involved.