Burgeoning Hispanic Market Ripe for Credit Education
Ser Tech Launches Spanish-Language Credit Education
Sarah. Cooke, Monday, January 28
Community banks and credit unions are beginning to recognize the strategic benefits of serving the Hispanic community in the U.S. Hispanics are the largest minority group and second fastest growing in the country, younger than the general U.S. population on average and their culture is highly aspirational. Emerging markets, however, can be scary for traditional financial institutions, which tend to be risk averse, and there’s little financial gain…at least initially.
Credit unions and community banks understand first hand that raising up their communities help the community and their businesses prosper. Additionally, community financial institutions are closer to the consumers in their community, so they are well-poised to serve Hispanic populations in their areas of service. Still, cultural norms must be overcome.
Research from Prudential suggests personal debt is culturally taboo in the Hispanic community. A full 62% of Hispanics respondents asserted “good debt” does not exist, while 49% preferred to pay cash for an item or not buy it all. However, 69% of respondents understood it’s nearly impossible to live debt-free, creating educational opportunities for community banks and credit unions. For example, 77% felt it acceptable to borrow for large purchases, such as homes, cars, college or a business.
Ser Tech’s Spanish-language Flitter Credit Network can help you reach the Hispanic market. Learn more about Flitter here!
Because of their cultural mores, many Hispanics do not have credit scores at all, which makes them appear a bigger risk than they actually are, according to UnidosUS. Your community bank or credit union can work with them to build credit responsibly and better grow their assets.
According to MediaPost, banks, investment firms and life insurance companies devote less than 2.5% of their total marketing spend, and that figure is skewed upward by a few banks that are heavily investing. This minute level of spending stands in contrast to the economic realities. Hispanics drove 38% of aggregate consumer spending from 2002 to 2012 and growing. Hispanics also account for 52% of U.S. homeownership growth since 2002, with a net gain of 2.8 million homeowners compared to a net decrease of 85,000 homeowners among Caucasians.
Hispanics are not necessarily unbanked or underbanked. The FDIC reported 48% of Hispanics in the U.S. are fully banked, while just 18% remained unbanked, meaning they’ve become more accepting of traditional financial institutions and should be viewed as a growth market.
Helping Hispanics become more familiar with wealth-building concepts through financial and credit education helps build financial institutions’ roles as trusted advisers. Sessions and informational materials can be in English and Spanish. Marketing as well as the composition of the institutions’ employees should demonstrate diversity, Spanish-influenced music and imagery, Lionbridge recommended. And don’t neglect social media! Hispanic adults are the most active of all ethnic groups on social media at 72%.
Ser Tech can help you reach new and existing consumers. Click here to contact us and learn more!
Financial institutions must also tell the story of how convenient they are, and it must be backed by flexible access, targeted products and services, and incentives, such lowering interest rates after so many on-time loan payments. Marketing should express that the institution exists to provide fast and easy access to the right products at the right times.