Vancouver, BC: A new report released today by SHARE sheds light on the risks investors face as a result of growing financial exclusion in Canada.
The report notes that an increasing number of Canadians are underserved by the financial mainstream, leaving them unable to build savings, access affordable credit or obtain appropriate financial advice. Moreover, underserved groups – including low-income people, new immigrants, and Aboriginal Canadians – are more likely to use high-fee products offered by a burgeoning alternative financial service industry.
“For investors, financial exclusion carries significant risks. Principally, it contributes to the negative economic trends we are seeing in Canada: low savings rates, low asset-holding, high levels of debt and growing inequality,” says Shannon Rohan, author of the report and SHARE’s Director of Responsible Investment. “Investors are not immune to the negative impacts of these trends and should be seeking opportunities to promote deeper financial intermediation and greater financial inclusion.”
The report identifies the lack of appropriate and affordable products and services that meet the unique financial needs of low-income and other financially underserved groups as one reason for growing financial exclusion in Canada.
“For financial institutions that respond effectively to this market need, opportunities exist to build new and diversified client bases and improve brand image,” Rohan adds.
Colette Murphy, Executive Director of the Atkinson Charitable Foundation, which sponsored the report, adds: “As an institutional investor, the Atkinson Charitable Foundation believes that the investor case for improving financial service provision for low-income and other financially underserved groups is strong. It warrants a conversation and we look forward to constructive discussions with the banks, and other investors and stakeholders on this issue.”
The report identifies opportunities for investors to promote financial inclusion by encouraging Canada’s mainstream banks to:
- Commit to understanding and addressing the financial service needs of low-income and other underserved groups;
- Develop innovative products and services that meet the unique financial needs of low-income and other financially underserved groups; and
- Identify and capitalize on opportunities to improve financial service infrastructure through new business models and delivery methods that are more appropriate for meeting the needs of financially underserved groups.
Download the report at: http://responsiblebanking.ca/?p=9
Responsible Banking: An investor Initiative seeks to improve financial service provision for low-income and other financially underserved groups in Canada through constructive shareholder engagement with Canada’s banks. It is a joint initiative of SHARE and the Atkinson Charitable Foundation. For more information visit: www.responsiblebanking.ca.