DES MOINES, Iowa—Despite Latinos being the nation’s largest ethnic minority group at more than 55 million people, most U.S. credit unions continue to overlook the need for a Hispanic growth strategy, one marketing expert asserts.
“Many credit unions want to wait until the demand from their community becomes more acute,” explained Coopera CEO Miriam De Dios.” What they may not be considering, however, is that demand already exists—it’s there, bubbling under the surface.”
De Dios said that nearly one out of every two Hispanic households is unbanked or underbanked, and that nearly 70% of unbanked Hispanic households have never had a traditional FI account.
De Dios added that local Latino leaders guide members of their community toward those providers – financial and otherwise – they know, trust and have already worked with, pointing to the need for CUs to reach out and build relationships.
CUs Must Be Proactive
“Credit union leadership has to be proactive in developing products, services, education initiatives and community outreach programs, rather than waiting for Hispanic consumers to seek them out,” she said.
De Dios emphasized that Hispanics are the largest, fastest-growing, youngest and one of the most financially untapped markets.
“You’d be hard pressed to find a community that has not experienced dramatic increases in the number of young, influential Hispanic people in need of financial services. Every credit union needs to be looking at this market and integrating a specific Hispanic growth plan within their overall membership growth strategies,” De Dios said.
Decision-Makers In The way?
De Dios said that those within credit unions who understand the need for a Hispanic outreach strategy are meeting with resistance from decision-makers, they should share the following study details with their bosses:
“A national study Coopera conducted in partnership with CUNA examined the overall membership growth and financial performance of 86 credit unions across the country, each of which had implemented a Hispanic growth strategy,” explained De Dios. “Among these credit unions overall membership growth accelerated by three percentage points from pre to post program implementation, and loan growth accelerated from 5% to nearly 9% in the third year after implementation of the program. And loan delinquency was practically negligent, changing from 1.5% to 1.52%.”