ORLANDO–Credit unions in Florida may be aware of the growing Hispanic population in the U.S., but CUs in Alabama were told they may be surprised at the growth of the same population in their state.
At the annual meeting here of the League of Southeastern Credit Unions, which serves both states, credit unions were told they have opportunities in reaching the largely untapped Hispanic market to build marketshare, grow membership, decrease the average age of members, grow fee income and, just plain do the right thing.
Miriam De Dios, a Mexican immigrant who grew up in an unbanked household and who is now CEO of Coopera, the Iowa-based company that offers consulting services on reaching the Hispanic market, said that market is “large, fast growing, young and untapped.”
De Dios noted that one-in-every-six U.S. residents is now of Hispanic origin (the ratio is 1-in-4 for children). Overall, there are 50-million people with Hispanic roots in the U.S. representing $1 trillion in purchasing power.
In Florida, 23% of the population (4.4 million people) is Hispanic, while in Alabama it’s just 4% (186,000 people). But, noted De Dios, Alabama has the second fastest growing Hispanic population in the U.S., trailing just South Carolina.
“There really are a lot of dynamics to pay attention to when it comes to the Hispanic market,” said De Dios. “There are a lot of nuances. There are 20 Spanish-speaking Latin American countries, but each of them often has different ways of saying different things. All do share the importance of culture and family. The mainstream culture has a lot of influence on Hispanics, and in many ways we are navigating two cultures. That has implications in terms of reaching us, messaging to us. If we look, for example, at technology, did you know that Hispanics have the highest rates of early adopters of technology?”
Saying the Hispanic market is “more complex” than is often realized, De Dios urged credit unions to watch three segments:
- The Unbanked and Underserved. “These are those with no financial relationship or who rely on fringe financial providers. This is a loyal market in need of a good alternative.”
- The Youth and Young Adult market. “This is the one all credit unions are trying to reach. You might think you can message to them in the same way you message to mainstream Millennials. I would urge you to rethink that. In many ways this group is learning a lot of financial behaviors from their parents who might be underbanked or unbanked.”
- Small businesses. “This is a largely entrepreneurial community,” said De Dios. “Women-owned businesses in the Hispanic population are growing fast. There is tremendous opportunity in this segment.”
De Dios said that nearly one-of-every-two Hispanic Households is unbanked or underbanked, and that nearly one out of every two Hispanic households is unbanked/underbanked, and that nearly 70% of unbanked Hispanic households have never had a traditional FI account.
Why are so many Hispanics unbanked?
According to De Dios, citing FDIC data, Hispanic households appear more likely than any other demographic group to cite ID, credit or banking history problems as their main obstacles. For unbanked, foreign-born, non-citizen households and households that speak only Spanish, account opening requirements are the main reason they do not have an account,” she said.
“With a comprehensive and strategic approach you can become that preferred financial,” said De Dios. “It takes having the right mentality, which means realizing it’s not only an investment in growth of your credit union, it’s the right thing to do. It’s also about adapting to the market instead of forcing the market to adapt to you. It means looking at personnel, your systems, policies, marketing point of view. Best-practice credit unions have that alignment in culture and operations.”