In light of new initiatives concerning the Migrants Market launched over Europe in the past 3 years, Kurt Salmon and the Efma decided to launch a new study dedicated to this market.

Figures speak for themselves! With more than $400 billion remittances in 2013, +8.8% per year expected on 2013-2015, barely impacted by North countries moribund economic situation, exchange rates variation or oil prices, the potential of this market is no longer to be demonstrated.

And if we are to consider the conclusions of our previous study, the financial potential of this market goes far beyond money transfer.

If we take a look at the market in 2013, it seems that several European banks, including very big ones, fully realized the potential of this market.

Thus, the first part of the study presents recent evolutions of the market. It is based on our extended research capacity, permanent watch and solid benchmarks we use for our daily delivery.

For the second chapter, through interviews with sales and marketing managers, we decided to focus on three successful European players with extreme positioning towards Migrants but complementary approaches to provide a big-picture view of the sector.

• BNP Paribas, which addressed this market to build synergies across its entities, bring value to its retail customers and encourage cross-selling.
• Deutsche Bank, which launched a complete affinity offering for the Turkish community in Germany, considering it as a full segment.
• Extrabanca, the first pure player in Europe dedicated to Migrants, which proposes a model that aims at serving all foreign communities living in Italy, both families and businesses.

As well supported by our market watch and through interviews with experts, the Kurt Salmon Point of View provides banks with some key points to succeed in targeting this kind of market:

• Rethink how they have to address the migrants market. Each community wants to preserve its own culture, its own identity, but at the same time, they want to be integrated into the host country. Then, it is important to gain their trust: not only adopt a specific marketing and distribution approach to push your banking services but also understand and highlight their values and their distinctive codes are the best way to succeed in this market.

• From selling to counselling: educate the clients, coach them, and support them. Among the three innovative initiatives detailed in the article, everything is different but all of them choose to focus on the same values: transparency, proximity and trust.

Banks will have to establish a counsellor / counselee relation to reinforce their mutual engagement. Be more present, explain them what they are buying to build trust and keep customers’ loyalty.

• Migrants’ market analysis teaches us some lessons to successfully address another market: the mass-retail segment. Migrants market is only one window on business opportunities to understand customers’ behaviour towards banking services. Among Migrant market, some segments have similar characteristics to mass-retail one. Mass-retail customers expect overall their bank to answer their essential needs first, without any complexity or over cost: sharing values with them like proximity and give them a warm welcome is a significant first step…

• “The smaller the target, the higher the profit per customer!  New analytics techniques now provide promising perspectives towards micro-segmentation strategy. Retail banks are putting the migrant market on their top priority agenda, given the growing potential and innovative segmentation tools we now dispose of. Customer need particular attention: providing him tailor-made services is the best way to improve his satisfaction and thus loyalty said Aude Arkam, Manager at Kurt Salmon.  Nowadays, segmentation is more subtle, affinity marketing gets sharper. Then, it is obvious that banks need to redefine their micro-segmentation strategy around new distribution and marketing approaches.

• “This segment was under considered until now.  But the migrant market is wide: once you have shaped your target, there is room for several simultaneous approaches whether you deliver tailor-made value proposition to a niche with high ROI potential or standard “light banking” services to boost basic client acquisition.” said Patrick Desmares, General Secretary at EFMA

As a conclusion, Kurt Salmon article explains why the Migrants market has climbed from a neglected customer base to the top-5 priority in the retail banks marketing roadmaps. In less than 4 years, marketing tools have drastically matured, to efficiently address this segment:

• Access to huge quantity of data now enables to explore micro segments with the help of niche experts.
• “Light banking” model is strongly relevant when you address a new segment, known to be reluctant to complex and engaging banking relationship
• Dedicated branch or boutique, clusters strategy and digital banking are perfectly adapted to drive Customer experience in branch and remotely, especially when the target is travelling between host and origin country.

This set of marketing trends now put the Migrant segment at the heart of Retail banks marketing, in perfect consistency with initiatives such as cross border offers, “one clic” banking, or “Bottom of Pyramid” approaches.