WASHINGTON—That Hispanics are key to future credit union growth—especially for CUs seeking to get younger—is no secret. But where credit union’ strategy for better penetrating the Hispanic market often falls short is that it isn’t just about the language—it’s often more about the device.
Miriam De Dios, CEO of the Des Moines, Iowa-based Coopera, said young Hispanic consumers, a very large and growing U.S. population segment, are big users of mobile and online devices, as is the entire Hispanic community.
“Often there is a misperception about how much Hispanics use electronic devices and services, especially with the language being a barrier,” said De Dios during CUNA’s Governmental Affairs Conference. “Actually, Hispanics tend to over-index in the usage of mobile devices.”
De Dios, who recently authored a white paper on The Digital Lives of Hispanic Consumers, emphasized that if credit unions want to cater to Latinos they not only must know what the local Hispanic market wants, they need to know “how they want it. For credit unions in pursuit of a relationship with the highly influential and growing Hispanic consumer segment, that how is most likely digital.”
When it comes to online, De Dios explained that Millennial consumers of all cultures are nearly 2.5 times more likely than Baby Boomers to use their mobile phones for things like online shopping and in-store payments.
“When we look at the Hispanic culture specifically, we see an even greater desire to use mobile means to accomplish everyday tasks. In fact, 13% of Hispanics depend exclusively on their smartphones for Internet access because they often lack broadband connections at home,” she said.
Market Not Homogenous
But even offering more digital access isn’t enough. To effectively serve the Hispanic community, De Dios said it is important to understand that it is not homogenous. There are several segments inside each local Hispanic market, including Hispanic Millennials, first-generation Hispanics and Hispanic small business owners.
When designing a digital strategy targeting Hispanic Millennials, it’s important to consider both language and culture, De Dios explained. “While most are likely to speak Spanish in the home, Hispanic Millennials are proficient in English and comfortable switching back and forth between the two languages – sometimes within the same conversation. In terms of culture, Hispanic Millennials – 40% of whom were born outside the U.S. – feel strong connections to both their Hispanic and American cultures.”
But De Dios added that CUs cannot begin to overlook branch interaction with Hispanics as they focus on mobile, saying they need to strike a balance between “real-world” and digital channels.
“That’s because face-to-face interaction, especially with staff who understand them, is critically important to young people,” she said.
The Coopera white paper emphasized that many young Hispanics are not only managing finances for themselves, they are also leading the way for their siblings and even parents. “This can create the kind of challenges that require more hands-on guidance, financial education and in-person attention,” the paper explained.
Not What You Think
First-generation Hispanics, U.S. citizens born outside the country, make up roughly 35% of the total Hispanic population living in the U.S. today.
“While you may be tempted to think of Facebook and other social networks as a digital playground exclusive to second- and third-generation Hispanics, that is far from the case,” said De Dios. “Recent studies have shown no notable differences in Facebook usage among the three Hispanic generations. Thirty-six percent of the average Facebook user’s connections are family members. For Hispanics, about one in every two Facebook friends are family.”
De Dios, noted that given the personal nature of Facebook, it’s important for credit unions to consider the reputational damage it could suffer within the Hispanic community from overly promotional content on the CU’s FaceBook page.
Turning to Hispanic small business owners (HSBOs), De Dios said they are often on their own, without the benefit of boards of directors, shareholders or even executive teams. Nearly 90 percent of Hispanic-owned businesses, in fact, are without paid employees, she said, underscoring the importance of leadership support and financial guidance for this segment of the Hispanic population.
“And their businesses are growing at an incredible rate – more than 15 times that of all U.S. firms,” she said.
De Dios, in her white paper, explained that Hispanic entrepreneurs are more youthful, connected digitally and socially engaged than non-Hispanics overall. She said HSBOs use the Internet, including their social accounts, to supplement resources and expertise they don’t yet have and that they want fast, smart answers to their problems. She also said that digital message should engage this segment in a conversation as opposed to speaking at them.
De Dios recommend that as credit unions seek out digital partners that they should understand how well a vendor understands the Hispanic market and how equipped it is to reach this community.