Enhance Your Service to the Hispanic Market by Learning Something New During Hispanic Heritage Month
The theme of this year’s Hispanic Heritage Month, celebrated from September 15 to October 15, is “Hispanics: One Endless Voice to Enhance our Traditions.” Hispanic Heritage Month is an ideal time to check in on your credit union’s plans to enhance its service to the increasingly influential Hispanic market.
During Hispanic Heritage Month, make it a point to learn something new about the Hispanic members in your cooperative, as well as those who have yet to be exposed to the credit union difference.
Below are a few questions you may consider asking consumers on your quest to learn more.
Is the immigration process part of your financial journey?
Although most of the 58 million Hispanics living in the U.S. are native-born Americans — and nearly three in four are U.S. citizens — there are nearly 20 million foreign-born Hispanics living and working in the U.S.
Many foreign-born Hispanic individuals have gone through the immigration process to obtain U.S. citizenship, and many others are working on adjusting their status. Others may not be eligible for U.S. immigration status at this time.
The immigration process is a time-intensive and costly one, as well as a major part of the lives of many Hispanic immigrants. Credit unions are in an ideal position to help members going through this process with both financial tools and education.
In addition, simply understanding how complicated the process is and welcoming individuals of all backgrounds at your credit union can go a long way toward building lasting relationships, establishing trust and making people feel welcome and comfortable becoming part of your cooperative.
Although credit unions exist to serve, they must also be sustainable. And, as many are discovering, the immigrant Hispanic profile exemplifies the ideal credit union member. This is especially evident when you consider how Hispanics in the U.S. are driving economic growth.
Which is your preferred language?
Often, credit union leaders interested in adapting their programs for Hispanic consumers are overwhelmed by the misperception they have to begin by translating into Spanish every piece of communication, including websites and disclosures. Thankfully, this is not the case.
It’s true many Hispanics, both U.S. and foreign born, prefer to speak Spanish. In fact, more than 37 million Hispanics speak Spanish at home. Yet, a strategic Hispanic growth plan begins by identifying the specific needs of the community and the particular target market a credit union is trying to reach. Initial Spanish-language materials (or better yet, bilingual materials) will only be required for those introductory products and services, and of course, member communications deemed essential to the strategic Hispanic member growth plan.
Often, Spanish-speakers tend to be the foreign-born population, which is also the most untapped and unbanked group. There is a reason large financials like Wells Fargo and U.S. Bank offer Spanish-language services across all of their channels and even why the government continues to introduce more Spanish-language services and materials. Everyone is trying to reach the most untapped groups because they present the greatest growth opportunity for the majority of businesses.
How can our products improve your financial life?
Hispanic use of top financial products has grown by double-digits over the past five years and outpaced non-Hispanics. Mortgages have grown 30 percent among Hispanics (compared to 9 percent among non-Hispanics) and auto loans have grown 31 percent among Hispanics (compared to 1 percent among non-Hispanics).
Hispanics are the only demographic in the U.S. to have increased their rate of homeownership for the last three consecutive years. What’s more, 9 percent of Hispanics are planning to buy a house in the next 12 months, compared to 6 percent of non-Hispanics.
The number of cars purchased by Hispanics in the U.S. is projected to double in the period between 2010 and 2020. It’s estimated that new car sales to Hispanics will grow by 8 percent over the next five years, compared to a 2 percent decline among the total market.
In short, there are many present and future needs among Hispanic communities for the types of products and services credit unions are uniquely positioned to provide. Understanding those needs can go a long way toward crafting an effective onboarding program.
Being all things to all people is rarely a good strategy, particularly for credit unions that pride themselves on truly knowing their members and providing custom, personalized experiences. The key is to ensure your products and services are culturally relevant and meet the needs of the community. If products aren’t adapted to the market, they will not resonate. The good news is you only have to repackage what you have instead of starting from scratch
To grow, credit unions must make a strategic effort to learn as much as possible about the youngest, fastest growing and most untapped consumer segment in the U.S. The celebration of Hispanic heritage going on right now presents the perfect opportunity to do precisely that.Leave a comment
According to the U.S. Department of Commerce, employment opportunities in science, technology, engineering and math (STEM) are booming, with 24.4 percent growth over the last decade. Yet, not enough students are pursuing degrees and careers in the STEM fields to meet the increasing demand. There are currently two STEM job openings for every qualified job seeker.
The lack of STEM representation is even more prevalent among Hispanics, who although account for approximately 20 percent of the U.S. population, only represent about 7 percent of the STEM workforce.
STEM workers enjoy a pay advantage compared with non-STEM workers with similar levels of education. Therefore, increasing the number of Hispanic students pursuing STEM degrees is one way to promote the continued socioeconomic mobility of Hispanic families in the U.S.
There are likely many factors that play a part in the underrepresentation of Hispanic students pursuing STEM – lack of information or academic resources, unfamiliarity of STEM opportunities among parents, etc.
However, according to a July 2018 study from the Hope Center for College, Community and Justice, a lot also has to do with finances. The study found that university students from low-income families who were offered need-based grant aid were 7.87 percentage points more likely to declare a STEM major than similar peers, representing a 42 percent increase.
What does this mean for credit unions?
The Hope Center study means credit unions have the opportunity to impact the number of Hispanic students who are pursuing STEM careers. This can be accomplished by connecting members with a variety of college savings products and opportunities – supported by culturally relevant financial education for parents and children. Consider the following opportunities:
• 529 college savings plans. These savings plans are tax-advantaged college savings vehicles and one of the most popular ways to save for college today. Much like the way 401(k) plans revolutionized the world of retirement savings a few decades ago, 529 college savings plans have revolutionized the world of college savings.
• Coverdell ESA plans. These savings vehicles are often used as supplements to 529 plans or other savings vehicles because they only allow parents to invest a maximum of $2,000 in them each year.
• UGMA/UTMA accounts. Parents or grandparents can also set up custodial accounts available under the Uniform Transfers to Minors Act (UTMA) or Unified Gift to Minors Act (UGMA). These accounts allow parents or grandparents to invest as much as they would like each year and in total. However, these investments are not tax-free like they are with 529 plans and Coverdell plans.
• College savings reward programs. Consider ways you might be able to help members save for college through purchases they’re already making. Can you offer credit card points or cash back that go toward a 529 plan or college savings account?
• Separate savings accounts. Perhaps the easiest solution for members is to set up a savings account dedicated to college savings and keep it separate from other accounts. Encourage members to set up automatic contributions and bolster the contributions anytime they receive a raise, bonus or other financial influx.
• Scholarships. Providing a scholarship may be just the financial – and confidence – boost a deserving high school student needs to attend college and pursue a STEM career. Just look at Gabriel Hernandez, who received a scholarship from JetStream Federal Credit Union, made possible by the Warren Morrow Hispanic Growth Fund Grant. In his scholarship essay, Hernandez wrote, “I know that I will succeed in college, but this scholarship will show me that others believe in me, too.”
No matter how your members plan to pay for college, it’s important that they save early and often. Consider offering educational classes and information – in both English and Spanish – to communicate the importance of saving for college and share resources to make it easier. The more financially prepared they are, the more likely it is they will go to college and pursue their dream career – STEM or otherwise.Leave a comment