An intentional, strategic focus on the Hispanic member experience has become a top priority for Idaho Central Credit Union (ICCU). The cooperative’s home state saw the Hispanic population increase by 17 percent from 2000 to 2010, and several of its 26 branches are located areas rich in Hispanic culture.
Although the credit union has long worked to translate materials and hire bilingual personnel, there has not been a formal plan in place for actively engaging the Hispanic community and the credit union’s existing Hispanic members. Before developing that plan, however, Marketing Manager Michael Watson wanted to ensure the credit union did its homework.
“There’s a lot of national research out there specific to the Hispanic consumer to which we could have turned,” said Watson. “Yet, we wanted results specific to our local markets. What may be true for most Hispanics may not be true for the Hispanics in eastern Idaho, for example. We needed to truly understand the unique needs specific to our community members.”
To do so, Watson worked with Coopera to organize three focus groups, each set in a different area of the ICCU field of membership. The goal was four-fold:
Among the many learnings generated by the focus groups, Watson said several stand-outs will shape the way the cooperative’s Hispanic member experience plan is drafted. These include educational and product development opportunities, as well as guidance on how and where to market the credit union’s services. Digital banking, emphasis on family/childcare and strong attention to consistent internal training were other high-priority issues identified through the focus groups.
Initially, Watson was skeptical about the authenticity of the results if participants knew ICCU was the host of the focus groups. However, he now believes revealing the credit union as the organizer has been beneficial.
“Sharing that it was ICCU behind the effort allowed us to gain a deeper level of feedback about actual experiences we may not otherwise have gotten,” said Watson. “Additionally, because the participants knew it was us, there is also now an expectation that we use the data to make a difference in their experience. In fact, a couple of our participants said, ‘We’ll be watching.’”
Watson and the ICCU management welcome this attention, as they look to prove their commitment to serving this important and growing segment of members. More focus groups and a unique plan for ongoing engagement of focus group participants are expected in the near future.Leave a comment
Credit unions with strong Hispanic growth programs have three things in common – intention, cultural alignment and an adaptive spirit.
Cooperatives most successful at earning Hispanic engagement started with a strategic plan to serve this particular community of influencers. Take Arizona’s Vantage West Credit Union, for example. The $1.4 billion institution knew a solid strategic plan had to begin with equally as solid research. Working with Coopera, the cooperative did not stop with demographics alone. The credit union’s leadership worked to identify other factors, such as language preference and product adoption rates. It also used research to determine which of its branches served the most Hispanic members and which had the greatest potential for growth based on population trends.
As the number of Hispanic professionals leading the movement becomes a stronger reflection of the country’s population, cultural alignment will become easier. Today, however, it may take work. Building the right organizational mentality and internal culture to serve a new market is absolutely critical. That’s precisely how Travis Credit Union has been so successful at earning the trust of its local Hispanic community. Yet, as Travis’ Sherry Cordonnier points out, building the internal culture may come from outside influences. The $2.3 billion California credit union has learned this first-hand from the impact of its own Hispanic Advisory Committee, made up of 13 Hispanic leaders in the community.
“On the committee, we have a broad spectrum of individuals who can talk about what it’s like for an immigrant family, or how to talk to the migrant worker, or how to reach out to the educated Hispanic who wants to start a business,” Cordonnier told Credit Union Magazine.
Most credit unions understand their membership strategy must evolve. Those that have developed an achievable plan to actually implement that strategy are stand-outs in Hispanic member growth. These credit unions are adjusting everything from products and departments to marketing and operations to become highly relevant to their new target market.
River City Federal Credit Union in San Antonio provides an ideal model for this kind of organization-wide evolution. Since beginning its Hispanic outreach initiative, the $131 million credit union has expanded its branch strategy, upgraded core business systems and invested in new electronic services, including bilingual mobile banking.
That this list of must-haves begins with intention is not a coincidence. It’s the most important component to achieving success in Hispanic growth efforts. The credit unions above have demonstrated excellence within each of the three must-haves for successful Hispanic engagement; but each began with a commitment and the intention to see that commitment through. The same can happen within your cooperative. If you feel a pull for a deeper, more emotional connection with the youngest, fast-growing and most underserved community in your market, gather up a team and begin putting thought to your own intentional growth strategy.Leave a comment
The hottest market for credit unions just keeps heating up. Hispanics in America, both U.S. born and immigrant, are on the radar of more credit union CEOs, CMOs and board presidents than ever before. And rightly so. Just look at what’s happening with this critical consumer segment:Leave a comment
Federation colleagues and I have been overwhelmed by the terrific response to the financial inclusion campaign, which kicked off in January at the Financial Inclusion for Immigrant Consumers Roundtable held in Los Angeles.
Ivonet Gomez, marketing manager for USC Credit Union in Los Angeles, was one of more than 50 professionals who attended the event. Following the roundtable, she shared this insight with Coopera:
I thought the roundtable was very well executed and perfectly timed given the government’s new immigration reform. The information provided by all presenters was insightful and helpful.
I really enjoyed Senator Cedillo’s testimonial and appreciate our city council’s involvement and support of this initiative. I have heard about the Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) programs before, but I was not aware of the details and upcoming expansion guidelines for these programs before the roundtable presentation. Also it was insightful to learn the Mexican Matricula Consular is now accepted as a valid form of identification at the DMV and other financial institutions. The Mexican Consulate is offering all credit unions a great opportunity to participate and get involve firsthand with those that need our help the most.
The next steps for our credit union are to plan a Hispanic growth strategy, create new products/services that promote financial inclusion to immigrants through DACA/DAPA, and promote loans with a credit history building purpose and savings component.
We understand the importance of all credit unions getting involved in this particular moment, when it is key to serve our immigrant community. We will continue to participate and be one of the credit unions that drives, collaborates and implements these initiatives to better serve the underserved communities in Los Angeles. This is our time to take action.
We couldn’t agree more with Ms. Gomez’s remarks; this is indeed the time for credit unions to show how they differ from other financial institutions and to extend a hand to a population that needs credit unions as much as credit unions need them.Leave a comment
In all the years I’ve been blessed to be a part of the credit union industry, I have never seen the level of interest in serving immigrant and underserved communities as high as we’re seeing right now. It’s extremely rewarding and very encouraging to see the movement grab hold of this significant opportunity.
Most recently, we witnessed this growing curiosity among credit union leaders through our financial inclusion campaign with the Federation. Just two webinars and a roundtable event have already brought together close to 250 people excited to discuss how to provide financial inclusion to immigrants impacted by the president’s recent immigration executive order.
I can’t wait to see how many immigrants are brought into the financial mainstream and how many more credit union leaders we are able to reach as this campaign continues.
As reported by CU Today, it was apparent during the roundtable event that credit unions leaders’ comfort level with offering products and services to the immigrant population is rising.
“Energy and enthusiasm levels remained high into the afternoon with presentations from Catholic Charities of Los Angeles and California, the Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA) and the National Council of La Raza (NCLR) on how to leverage partnerships,” reads a recap blog post by the Federation.
Credit unions from the local area, Phoenix and Washington, D.C. participated in the Los Angeles roundtable event. However, as evidence by the webinar attendance, this is an issue of interest to credit unions in all parts of the U.S. Professionals from across the country participated in those two online events.Leave a comment
For many people – especially those of us working in the financial services industry – it can be difficult to understand why someone would not have a bank account (or if they do, why they would still use costly alternative financial services). Yet, legitimate and systemic reasons for a lack of traditional financial relationships offer a glimpse into the “why’s” behind our nation’s underserved communities.
At the recent 2014 CUNA Community Credit Union and Growth Conference, credit union leaders and I dug into the question “Why Are Consumers Unbanked” to uncover strategies that may help the movement better serve these individuals.
Below are just five of the “why’s” we discussed:
Misperceptions about money persist
Geography plays a role
Culture can be a driver
Past behavior predicts future
Language barriers are real
For credit unions, we discussed, there exists a great opportunity to provide a better alternative for these individuals. That’s because everyone has financial service needs – almost daily. Take a look at the five “why’s” above and ask yourself if your cooperative can address any or all of these for your local unbanked and underbanked community.Leave a comment
We get asked often why a firm focused on Hispanic outreach is based in Iowa, a state many consider less-than-diverse. In fact, the Hispanic population in our home state more than doubled from 2000 to
The change to our state’s consumer make-up has not escaped the attention of Iowa’s credit unions. Leaders of the state’s movement are right now exploring ways to invest in service to Hispanics, the largest, fastest-growing, youngest and most underserved group in the U.S.
To help, Coopera and the Iowa Credit Union Foundation (ICUF) recently facilitated a roundtable for Iowa credit unions. In the 4-hour session, we joined four credit unions already doing an excellent job with service to underserved consumers, many of whom are Hispanic.
Among the different ways we talked about adapting credit union products and services to this special market, the concept of unique payment products stood out. Because underserved consumers continue to use high-cost alternatives to pay bills, make rent payments and secure short-term loans, payment products present a sizable opportunity for credit unions looking to reach this market.
Here are just a few of the alternative payment providers already popular with the underbanked, Hispanics included:
PayNearMe: This provider issues plastic cards and PaySlips that can be printed or displayed on a mobile device.
Walmart: The retail giant continues to diversify its financial service products, which include everything from credit cards to money transfers. Most recently, it began marketing a low-cost checking account.
LendUp: Credit-building loans starting as low as $250 available with instant approval online. (Of course, it comes with a hefty price tag at 29% APR).
WipIt: Allows Boost and Sprint mobile phone users to make payments with cash directly from their phone.
OnDeck: Provides small business loans online, and underwriting is based on performance rather than individual credit.
Boom: A prepaid card with mobile banking features.
For each of the above, our expert panelists brainstormed alongside Iowa credit union leaders how cooperatives could compete and why they should. It was an excellent discussion, and one I’d be happy to share in more detail one-on-one. Send me an email with your thoughts or questions and we can talk through your credit union’s payments strategy and how it may be configured to appeal to the underserved Hispanics in your community.Leave a comment
I don’t think many of us were surprised to hear of Walmart’s unveiling of a new checking account with an $8.95 monthly fee and no overdraft or returned check fees. After all, the writing has been on the wall for some time, as we’ve watched the mega retailer dip its toes into financial waters.
What was less expected, however, was Walmart’s rollout of health insurance services this month.
So, who is Walmart targeting with these new products? We believe the target is a specific sector of its existing shoppers – the unbanked/underbanked and the uninsured/underinsured markets, and in particular the Hispanic market.
Unbanked individuals do not have a traditional financial institution account, providing a potentially large gap for Walmart to fill. As for the underbanked, these consumers may have a traditional savings or checking account; however they largely rely on non-traditional financial service providers, such as check-cashers and money transfer services, for many of their financial transactions.
Did you know that 1 in 12 U.S. households is unbanked and 1 in 5 U.S. households is underbanked? That’s a total of 34 million households in the U.S., according to the FDIC’s 2011 National Survey of Unbanked and Underbanked Households.
The health insurance market also represents a sizable opportunity for Walmart, as the U.S. uninsured rate is now at the lowest level recorded since 2008. For the Hispanic market, that means nearly 1 in 3 people are uninsured.
Why Walmart Sees Potential in These Markets
There is a misconception about the unbanked and underbanked market all being low-income, high risk and not profitable clientele. Walmart knows better. The U.S. unbanked and underbanked market does include low-income households, yet it also includes immigrants, young people, minority groups and single family households with financial needs.
These individuals spend much of their paychecks on pricey alternative financial services, to now include Walmart’s checking account and prepaid cards. (If you’re thinking $8.95/mo sounds pretty affordable amid news of rising fees, keep in mind the average monthly service fee for a non-interest checking account fell 5 percent to $5.26 over the past 12 months.)
A large percentage of U.S. unbanked and underbanked households are made up of Hispanics. Much of this stems from cultural preferences vs. a lack of financial stability. Hispanics are also the largest, fastest-growing, youngest and most underserved group in the U.S. with more than a trillion in purchasing power – a prime untapped market for credit unions.
One thing is for sure, profit-hungry Walmart would not introduce these products if it did not foresee strong potential. It’s clear their executives have identified the above consumer segments, many of which include Hispanic consumers, as a hot, untapped market. Credit unions must not acquiesce – these markets are tailor-made for the “people helping people” philosophy and are primed for generating tremendous revenue and membership growth.
As Scott Butterfield from Your Credit Union Partner notes in Credit Unions and The Ultimate Category Killer, “Overlook the Hispanic community at your own risk.”Leave a comment
With intense growth of the Hispanic market across the country, more U.S. credit unions are looking to add money transfer programs, known as remittances, for Hispanic immigrants with family in Latin America.
And now may be an ideal time to play in the market.
U.S. remittances to developing countries reached $404 billion in 2013 and are predicted to grow to $516 billion by 2016, according to the World Bank. At the same time, an increasing number of providers have dropped their remittance programs, leaving a competitive opening for credit unions.
The shuttering of many long-time remittance providers is due to an unprecedented compliance burden. This has also led to the development of an industry that is, as this PaymentsSource article puts it, “ripe for startups.” There are now even international start-ups looking at the U.S. with aspirations of market dominance.
As the remittance industry shape-shifts to meet increased scrutiny from regulators, some credit unions are looking to find new partners who can help them compete in this important space.
Credit unions should view remittances services as a value-added tool designed to increase the depth of the membership experience. Coopera’s research (performed in conjunction with the World Council of Credit Unions) found that remittance services, when combined with an intentional Hispanic growth strategy, can earn a credit union much higher volumes as compared to those credit unions without a strategic approach.
If your credit union is looking to develop or make changes to its remittance offering, here are a few things to keep in mind:
Understand the geographies you must serve – Not all remittance providers serve the same locales. Before creating a partnership, understand your Hispanic members’ countries of origin and the available locations within a typical recipient’s country.
Survey the competition – Examine your local market to understand how you can provide the most competitive offering. What other local organizations are providing remittance services? What are they charging? What are their hours of operation, etc.?
Investigate the alternatives – When issued to a Hispanic cardholder in the U.S. alongside a secondary card for a family member in Latin America, a reloadable prepaid card like the Coopera Card is an affordable and accessible option for sending money outside the country. What’s more, reloadable prepaid cards do not require compliance with the CFPB’s remittance transfer disclosure requirements.
Know your compliance burden – While the cost of compliance will mostly fall on the shoulders of third-party service providers, credit unions will be held ultimately responsible for providing the appropriate disclosures.
Develop a member experience strategy – How will the credit union transition first-time remittance users to more products? Incentives like offering the fourth or fifth remittance free can keep remitters coming back to your shop for more remittances, but how will you engage them with other products and servicesfor the long-term?
Especially given recent industry upheaval, remittances are a much-needed service for Hispanic immigrants with family members residing in Latin America. In fact, Coopera has made remittances a best-practice solution for credit unions looking to invest in the largest, fastest-growing, youngest and most underserved segment of the U.S. population. While there are certainly barriers to entry, keeping the above pointers in mind can help you break through those obstacles to deliver a needed solution to your Hispanic members and prospective members.Leave a comment
The following case study is an excerpt from Coopera’s Iowa Hispanic Opportunity Report for the Iowa Credit Union League (ICUL). For more information, contact the ICUL at www.iowacreditunions.com.
Veridian Credit Union, headquartered in Waterloo, Ia., has a long history of offering innovative and affordable financial services to members. One way Veridian differentiates its business from other financial service providers in the area is by offering services specifically designed to improve the socio-economic well-being of those in greatest need — including the local Hispanic community. For Veridian it’s not about the business’s bottom line; it’s about best serving members’ financial needs.
“Many years ago, Veridian recognized a need to offer Latinos in our communities more affordable products and services compared to the expensive alternatives they were using,” said Angela Weekley, Veridian community inclusion manager. “We also understood that our credit union’s value to members was to help them build a successful financial future, rather than offering one-off solutions.”
To aid their efforts, Veridian began working with Coopera to better understand the nuances of the Hispanic culture, to learn more about what this market needed out of a financial services provider and to build a relationship with the Hispanic communities in its operations areas. Coopera also gave Veridian guidance in hiring bilingual staff, as well as marketing and tailoring its product and services mix to this very important demographic.
According to Shelly McGill, Veridian’s Central Iowa regional manager, offering the right products and services was very important to meeting Latino members’ unique financial needs. One of the actions Veridian took was to give members a viable alternative to expensive payday-loan centers and check-cashing services. To do this, Veridian introduced an affordable alternative to traditional payday lending outlets in early 2007. “The Payday Lending Alternative (PAL) loan features a savings component to help break the cycle of dependency on payday loans,” said McGill. “This program was a success almost immediately. Just two years after it was introduced, Veridian had already awarded more than 4,700 PAL loans to both Latino and non-Latino members.”
Veridian also started offering the Coopera Card, a prepaid card tailor-made for the Hispanic market. Quinceañera loans, checking and savings accounts, CDs (Certificates of Deposit) and credit card accounts, as well as home equity loans, round out the services of which Veridian’s Hispanic members take advantage.
In addition to those products, Veridian made an effort to enhance its member services. They became an ITIN (Individual Taxpayer Identification Number) acceptance agent to help community members apply for their ITIN number through the IRS, and also began to offer interest-bearing safe savings accounts and loans to Hispanic members without traditional forms of identification and documentation. Veridian’s ITIN loan offerings include credit builder loans, auto loans and consumer loans such as the PAL, share secured co-signer loans. The company also focused on offering financial education opportunities, like a credit builder loan program, to help immigrant families better acclimate to the U.S. financial system. Prior to hiring additional Spanish-speaking staff, the credit union incorporated an AT&T Language Line better-equip English-speaking staff to assist Spanish-speaking members.
To support these products and services, Veridian also began to enhance its internal infrastructure for Hispanic outreach. “We make a point to hire bilingual staff in our branches when the opportunity makes sense, even adding more staff in those locations with greater non-English speaking populations,” said Weekley, who noted the credit union currently employs 23 Spanish-speaking staff in its 26 branch locations. “We implemented a diversity training program for all employees to make sure everyone is on board with the company’s goals and efforts.”
Weekley added that Veridian started their outreach to the Hispanic community by forming an advisory council made up of staff and local community members. It helped the credit union better understand the Hispanic community’s needs and make recommendations on how Veridian could best meet those needs.
Veridian continues to focus its external marketing efforts on better targeting Latinos. “We create bilingual brochures and collateral for our products and services,” said Weekley. “And, we advertise in Spanish newspapers and on local radio stations. We make sure to participate in public relations opportunities, like providing information or quotes for articles in newspapers and magazines, to build awareness about Veridian and its outreach efforts.”
“We asked the council to review our initiatives to make sure they make sense for our Latino members,” said Weekley. “Advisory Council members reviewed materials to make sure our translations accurately reflect the messages we wanted to communicate.”
In addition to its marketing initiatives, Veridian’s external outreach efforts include becoming an active participant in the local communities the credit union serves. Every year, staff participate in local Latino Heritage Festival and Cinco de Mayo celebrations, as well as partner with organizations like J&E Entertainment in Iowa City, Ia., to host an annual Sunset Salsa event. And, each July, Veridian is the presenting sponsor for Festival Latino de Cedar Rapids in Cedar Rapids, Ia.
The cooperative is also active in community organizations. For example, McGill serves on the Latino Forum of the Urban Core, a Des Moines based group of members and supporters of the Latino community. “We really care about the people in our communities,” added Weekley, “and we are proud that our actions and intentions are authentic. The best way to prove this to our members is by truly becoming a part of their lives.”
All of these efforts have been successful thanks to the credit union’s hard work and dedication to this mission of improving its members’ lives. To continue its success, McGill noted that Veridian keeps up-to-date on the latest rules and regulations in the financial industry, makes sure the cooperative is offering products and services that not only make sense for members but that also comply with the law .
“Because we are a cooperative, rather than a for-profit business,” said McGill, “we can focus on doing what’s right for our members. Our results prove this is the right approach. In 2012, we experienced a 10-percent growth in our Latino membership.” Currently, 6,398 of the credit union’s 174,000 members are Latino.
Weekley concluded, “We truly listen to the voice of the people — not just guess which products and services Hispanic members need. We ask them for input and then deliver what they want. We are proud of what we’ve accomplished so far and will continue to look for ways to grow our efforts and opportunities in the future.”Leave a comment