Thanks in part to the Hispanic market’s disproportionate number of underserved consumers, competitors from all corners of the financial services industry have targeted Hispanics with renewed vigor in recent years. These include money service businesses such as check cashers, money transfer providers and money order issuers. Small-dollar loan providers, rent-to-own shops and high-interest auto financing providers are also finding a customer goldmine within local Hispanic communities.
Much of this is due to the Hispanic culture’s reliance on advice from friends and family. When one organization serves a Hispanic customer well, chances are that business will grow quickly from referrals. As well, entirely new providers have come on the scene, making competition for the critical Hispanic market even tougher.
While tax providers offering refund anticipation loans are nothing new, they are now offering loans in the form of prepaid cards, giving underserved Hispanic consumers access to the safety and convenience of plastic. The popularity of prepaid cards with underserved consumers has sparked tremendous growth in the prepaid sector with Walmart leading the pack and Hispanic focused companies like Telemundo and Univision also getting in on the game.
Because 91 percent of those identified as underbanked have mobile phones and 57 percent have smartphones, mobile services for this group are also springing up rapidly. One example is m-Via’s Boom service, a P2P mobile payments service targeted to the underbanked.
Fortunately, credit unions have several innate qualities that help them compete against long-time and new-comer financial services providers. The ability to offer the same products and
Where you start depends, of course, on the special opportunities unique to the immigrants in your local communities. By performing a comprehensive market analysis, credit unions can better define their target market, understand the competitive factors that will shape their own strategies and begin to see how service to immigrant populations can align with their overall growth strategies.
This blog is an excerpt from the guest opinion article “Immigration Reform May Prompt Member Push” recently published by the Credit Union Times.Leave a comment