The challenges refugees face when setting up bank accounts range from language barriers to finding institutions that recognize their identity documents. Some financial institutions in North America have explicitly opened their doors to refugees as both customers and prospective employees, and are working to ease such difficulties.
TD Bank Group in Canada said in March that it was actively recruiting refugees for employment at the bank. Apple Bank in New York City announced in August that it was welcoming Ukrainian refugees to open accounts in-branch, in partnership with the Hebrew Free Loan Society. Royal Bank of Canada offers credit products to newcomers to Canada — which it defines as any individual under one of three visa classes and more broadly who has been in the country for less than five years — that don't require a credit history.
The United Nations reported in May that the number of people forced to flee their homes surpassed 100 million for the first time on record, with the war in Ukraine one factor in tipping this figure over that mark. In September, President Biden announced that the U.S. set the refugee admissions target at 125,000 for the upcoming fiscal year. But efforts to bank this population are largely nascent.
Many initiatives to bank refugees require people to come into a branch in person; the prospective customers may prefer it as well. But some financial institutions have been finding technological solutions to smooth over this process, including applying for a bank account using atypical documentation and submitting applications before arrival.
Grupo Financiero Banorte in Mexico started offering a digital bank account for refugees in May under a United Nations High Commissioner for Refugees program.
Re:start Financial is another example. The challenger bank in Austin, Texas, was founded in 2021 as a banking app for immigrants to the U.S. that spoke Slavic languages. After Russia invaded Ukraine earlier in the year, the team at Re:start decided to expand its mission to welcome refugees escaping the conflict.
The war hit close to home. Half of the 20 employees on staff are Ukrainian; one employee was hosting 12 relatives at home.
"For us, it's personal," said Dennis Larionov, CEO of Re:start.
Russia's invasion has disrupted life at Lithuanian startup Paysera, which has a dozen employees in Ukraine, including Yevhen Matasar, who fled from Kyiv to a nearby town where he still does some programming when he can. "This is a very difficult situation … it's helpful to be able to continue to work," Matasar said.
Larionov and his team set out to solve the roadblocks that refugees run into when opening an account. One is an absence of Social Security numbers, or proof of address if they were staying with relatives. Re:start's solution is to use immigration documents, specifically the I-94, an arrival and departure record from the Department of Homeland Security, along with the I-797, a notice of action from the U.S. Citizenship and Immigration Services, or travel authorization for the Uniting for Ukraine program from USCIS. Applicants will use their mobile phones to take pictures of these documents and upload them as part of their applications.
"The main question regulators ask is, how do you know this is a real person?" said Thomas Heatherly, chief business development officer at Re:start. By uploading pictures of verified government forms, "they're providing more documentation than a typical U.S. resident or customer would when applying for an account. When you have them upload pictures and tie them to a real phone number, we are decreasing fraud and increasing probability that it's a real person."
The company declined to name the vendors it is using, but said it has built upon the capabilities of its know-your-customer vendor for this use case. The underlying banking services are provided by USAlliance Federal Credit Union, a credit union in Rye, New York, that has $2.6 billion of assets. The credit union agreed to verify customers based on their refugee status, rather than traditional documents
Re:start spread the word about its services for Ukrainian refugees largely online, such as through Facebook groups, the encrypted messaging service Telegram and Ukrainian influencers. Re:start runs a Facebook group in Ukrainian to help refugees adapt to life in the U.S., including guidance on how to write resumes and find apartments. It also partnered with organizations such as Refugee Services of Texas and Church World Service.
The next step is to open up its services to Afghan refugees. "They have different challenges," said Larionov, and require a different KYC process. The company hired a community manager in Dallas who is embedded in the Afghan community. This population is more likely to have already received a Social Security number, employment authorization and proof of address. Re:start has also noticed that men in this community tend to have documentation and proof of address while women do not. The company created a program to encourage women to open their own accounts, where the first 50 Afghan female customers received a $100 welcome bonus and free financial education course from Re:start.
Larionov estimates that Re:start has 9,000 active customers, 276 of whom are refugees. The services are free, so Re:start is relying on interchange income. To encourage frequent use of its debit card, it is donating all of its profits from interchange fees to Liberty Ukraine, a nonprofit that fundraises for humanitarian aid, medical supplies and more, until the end of 2022. A future goal is to give users more choice in where their funds go, as well as to add a credit builder.
BMO Financial in Toronto is taking a different approach to aid Ukrainian refugees open a BMO account in Canada.
The bank's NewStart program offers deposit accounts, ways to access credit with no credit history, 12 months of no-fee international money transfers and more for newcomers to Canada, which includes permanent residents, international students and foreign workers. In February 2021, the bank layered on digital "pre-arrival" capabilities that let newcomers from China and India set up their accounts up to a year in advance of their arrival; the bank plans to extend this capability to 15 more countries in the coming months.
"In our consumer research, we found a lot of people new to Canada wanted to get themselves established before they arrived," said Gayle Ramsay, head of everyday banking at BMO.
Recently, it expanded the program to let refugees from Ukraine apply for an account before arrival. Newcomers who go this route must still undergo know-your-customer and identification checks to activate their accounts when they reach Canada. The bank has simplified the identity requirements for Ukrainian refugees and is accepting a visitor or work visa for KYC. Any newcomer opening accounts within Canada can use Selfie ID, a capability that BMO launched in 2021, where applicants can verify their identity by submitting a photo of Canadian government-issued photo identification and by snapping a selfie.
Currently, 15% of newcomers that are opening BMO accounts within Canada are doing so from start to finish digitally. "We find with newcomers that because they move their entire lives, they prefer to come into a branch," said Ramsay. "We expect this to increase as more immigrants become more comfortable using digital capabilities."
Although the option is there for Ukrainian refugees to get the process going outside of Canada, most of them choose to wait. "We find that because a lot of them are so rushed" in their escape" that "they are getting accounts opened once they land in Canada," Ramsay said.
BMO spread the word by partnering with newcomer associations and immigration services, as well as Ukrainian-based support groups. It is also
There are many reasons recent arrivals choose one institution over another.
"Word gets around quickly if you have a local branch where bank tellers speak Farsi or Arabic or Swahili or any language that our client population speaks," said Erica Bouris, director of economic empowerment at the International Rescue Committee. They may also gravitate to a bank in their neighborhood or one a friend or family member recommends.
Digital access to banking may not be everyone's first choice. "English-language learners and immigrant populations in the U.S. generally have lower levels of digital literacy," said Bouris. "We see the digital divide being a factor there."
