At 52 million people strong, Hispanic or Latino Americans are roughly 16.7% of the U.S. population and the second-largest ethnic group.
If you are in Texas, Florida, New Mexico, Nevada, Florida or Arizona, more than 20% of your population likely speaks Spanish. It is the native language of 13% of all U.S. residents.
Now, consider a Univision poll that showed 51% of Hispanics feel “very” or “somewhat” undervalued by the financial services industry … and 69% said that financial services do not meet their needs.
You may have an enormous opportunity!
I have a client who has branches near five ZIP codes that have 50% or more in Hispanic population. These five ZIPs make up 52% of the institution’s total footprint. Better yet, few, if any competition are catering to the Hispanic market – we’ve only found one website that even offers Spanish translations. Finally, the five Hispanic-heavy ZIPs are full of young families with median household incomes of around $50,000.
- Differentiation … check
- Well defined market … check
- People who need loans … check
- People who need savings … check
- People who feel under-appreciated by the competition … check
This strategy simply writes itself!!!
If you find yourself in a similar situation and choose to target Hispanics, what do you need to know?
According to the Univision-Harris Poll:
- Hispanics are twice as likely to be interested in financial services that non-Hispanics.
- 80% of Hispanics take interest in financial services that can help them achieve life goals.
- 53% of U.S. Hispanics speak only Spanish (Only 34% speak mostly English).
- Average monthly credit card expenditures are $555, with 36% carrying a balance and averaging 2 or more cards.
- 73% believe there should be more Hispanic-directed commercials.
- 88% say companies that make an effort to invest in their community deserve their loyalty.
So, what can you do if a Hispanic target makes sense in your market?
- Find a Good Translator: Make sure that your website, sales collateral, applications, notices, ATMs, mobile app, online banking … every possible touchpoint has a Spanish option.
- Talk the Talk: Nearly half of those surveyed said they have greater trust in their bank when they can speak to someone in person. Hire Spanish-speaking staff.
- Target Your Ads: You should create ads, in Spanish, and target them accordingly.
- Understand the Culture: This is a demographic that values family, heritage and community. It often has several generations living together in the home.
- Understand What the Culture is Not: Watch for stereotypical and false clichés. Most Hispanics do not celebrate Cinco de Mayo, for example.
- Trust is Your Brand: Many 1st or 2nd generations are leery of financial institutions. Remember that banks in Mexico, Puerto Rico, Dominican Republic, Colombia, etc. are very different than the well-regulated institutions that we have. These folks may also require (and be open to) a bit more education at the front line concerning personal finance. If you truly want to build trust, see tips 1, 2 and 3 above.
- Ask for Referrals: 27% of Hispanics rate family and friends as their preferred source of financial information. It’s safe to assume that if you win one Spanish-speaking person, you’ll win their entire family … if you earn it!
- Look at Your Products: Make sure that you offer affordable banking services: money orders, check cashing, credit-building loans, second-chance checking or other products. One institution even offers a Dreamer Loan that covers the cost of the Deferred Action for Childhood Arrivals applications.
- Consider ITIN: ITIN loans allow undocumented people to apply for loans with their Individual Tax Identification Number rather than citizenship or Social Security Number.
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