We’re fresh off another exhilarating CUNA Governmental Affairs Conference. It was a terrific conference with what I believe was record attendance! While in the nation’s capital for the event, we were lucky enough to chat with several credit union leaders about the value and importance of serving the Hispanic financial consumer.
As part of our whirlwind awareness tour, I got the chance to talk with CU Broadcast host Mike Lawson. We discussed quite a few things, including growth of the Hispanic population in places people may not expect. Credit unions in the Midwest, for example, are finding an explosion of the multi-faceted Hispanic communities in their areas to be a clear call to action.
Take a listen to the conversation at CUBroadcast.com and download our white paper, “Hispanic Growth Strategies Not Just for ‘Gateway States’ Anymore.” Then, get in touch. I’d love to hear your impressions, as well as where your credit union is on its own path to better serving this influential and growing group of community members.
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As the child of Mexican immigrants, I grew up in a household that was unique in many ways from those of my friends and peers. One of the differences was that my parents paid bills, saved money and accessed credit outside the traditional financial system. Hindsight being what it is, I can now see how much of an influence those financial choices had on my eventual career path.
Although it came with challenges, my non-traditional American childhood absolutely empowered me. Today, I feel so fortunate to be living out my passion – introducing more Hispanic consumers to the life-changing benefits of becoming a credit union member.
What’s equally exciting to me is introducing more organizations to benefits of serving Hispanic consumers. As I travel the country, talking with credit unions, colleges and other consumer-centric organizations, I’m learning so much about how perceptions continue to shape reality.
One of the perceptions that Coopera colleagues and I are working hard to reshape is this idea the Hispanic market is homogenous. In fact, there are many nuances to the culture. Let’s take a look at a few…
Acculturation, Language & Immigration Spectrums
Acculturation describes how quickly an individual or set of individuals adopts the behaviors, beliefs/values and attitudes of a new culture in addition to their native culture. The spectrum goes from un-acculturated through semi-acculturated to fully acculturated.
It’s critically important for marketers and others to understand where their target market resides on the spectrum. For instance, a credit union that believes it is best suited to serving semi- or fully acculturated Hispanics will want to know members of these two segments prefer TV and print media outlets, while radio is important for the un-acculturated. In terms of product development, credit cards are common among fully acculturated Hispanics, but that is far from true for un-acculturated individuals.
In addition to behaviors, values and attitudes, there’s also a spectrum of language preferences that vary from Spanish to bilingual to English. Immigration status, too, changes from recent arrival to established resident to U.S. born. All of these characteristics and preferences impact the way Hispanic consumers value (or don’t value) financial services to the quality of their lives.
Financial Attitudes and Behaviors
There is tremendous opportunity for credit unions to foster trust and expand the financial education of some Hispanic community segments. Saving for retirement, seeking financial advice, long-term goals, personal debt and financial confidence are areas that require special concentration across segments of the Hispanic market. Here again, however, there are differences between groups within the culture.
This is why it’s so important to view the results of national studies, surveys and indexes with a grain of salt. Take, for instance, an extensive study of more than 1,000 Hispanic individuals between 25 – 70 with incomes of $25K or higher.
Here are just a few of the findings from that particular national study:
–More than half indicated a poor or very poor understanding of workplace-based retirement plans.
–Half of respondents expressed a preference for Spanish communication and materials.
–Respondents with lower incomes and those born outside of the U.S. place higher priority on funding near-term goals such as education for their children.
When reviewing national studies, be mindful of the word “half.” Let it serve as a reminder of the great diversity that lies within the U.S. Hispanic community. If a particular study finds half of its respondents prefer Spanish, for instance, that could mean the other half did not.
The biggest take away: It’s critically important to understand your local market needs. Like much of the general population, Hispanic consumers strive to improve their financial situation. At the same time, acculturation, language, immigration status and other characteristics such as age, income and country of birth, have a huge influence on how that value is applied day-to-day.
While the Hispanic population continues to grow, it will continue to change. As you approach strategic planning season, consider whether your credit union could benefit from a local market study of the influential Hispanic consumers in the communities you serve.Leave a comment
I recently appeared on an episode of the CU Broadcast to discuss the Hispanic market opportunity for credit unions. The host, Mike Lawson, and I talked through quite a few topics, most notably how credit unions can earn the trust of young, unbanked Hispanics.
The video is also archived at CUBroadcast.com, along with many other insightful episodes of the show. If you get a free minutes, visit the site and watch a few…Leave a comment
By Guest Blogger Michael Adams, Vice President of Marketing and Public Relations at Greater Iowa Credit Union
In working with Coopera, we have found it important to get the structural components in place before launching any significant outreach to the Hispanic community. This includes things like laying a solid foundation complete with Hispanic-friendly membership policies, as well as securing employee, leadership and board support. Only after this can you begin to do the fun stuff, like product development or marketing.
Not everyone on a credit union’s leadership team or board of directors may be fully supportive of an Hispanic outreach program, and some products, such as ITIN loans, for example, may be downright scary to them. A vocal board member who is not on board can create barriers to any proposal. We discovered early on that some credit union administrators and board members can have a knee-jerk reaction to the creation of an aggressive Hispanic initiative.
More often than not, education regarding the needs of this community is necessary. Once you do get a good customer identification program in place and board support, you can begin the rewarding work of reaching out to the Hispanic community with products and services that are useful to them, such as remittance services, free checking, reloadable debit cards, ITIN and other culturally relevant loans.Leave a comment
By Guest Blogger Oscar Porras, Community Liaison at Maps Credit Union
The 2010 U.S. Census showed that the Hispanic population increased 43 percent since 2000. In our neck of the words (Oregon), we’ve seen a whopping 63.5 percent increase over the same period of time. An essential part of reaching out to our Hispanic neighbors is presenting products and services in a way that is culturally relevant.
At Maps Credit Union, in cooperation with Coopera, we are working to add some of the services that are most important to the Hispanic community, such as credit builder loans, remittance services and prepaid reloadable cards. We have set up inter-departmental teams to discuss these products, and we look forward to rolling out our first new product in the first quarter of 2012.
It has not been easy. There have been some challenges, including negative attitudes from a small number of staff. Then again, anything worth fighting for always brings challenges. We are working to address our internal and external issues through open and honest communication. Racism, stereotypes, and the like all come from misinformation. Educating staff about their new neighbors will help foster a credit union culture of acceptance and understanding.
I look forward to my new role as Community Liaison at Maps Credit Union and adding another wonderful piece to our credit union culture. I would love to hear about your challenges and victories as your institutions move toward a greater focus on welcoming the members of your local Hispanic communities.Leave a comment
There’s no better time than the present to begin preparing for 2012’s month-long celebration of the Hispanic heritage and culture, Hispanic Heritage Month.
Credit unions across the country found ways to engage with their local Hispanic community’s during last year’s Hispanic Heritage Month. Our VP Miriam De Dios recently shared a few of those efforts with Credit Union Magazine’s online readers. Below is an excerpt from that article. For more, visit creditunionmagazine.com.
All over the country, credit unions are discovering opportunities to participate in community celebrations. Maps Credit Union in Salem, Ore., is partnering with Western Oregon University to launch the Latino Education and Access Program, which helps Hispanic students further their education with scholarships.
Fundraising for the program will be kicked off by former Mexican President Vicente Fox.
Maps Credit Union will also be a silver sponsor of the Hispanic Heritage Month Breakfast, Oregon’s official kick-off celebration for Hispanic Heritage Month.
Des Moines Metro Credit Union also plans to participate in its community’s Hispanic Heritage Month celebrations. The ninth annual Iowa Latino Heritage Festival will take place in Des Moines in September.
The credit union will not only have a booth at the festival to meet with current and potential members, it will also sponsor an elote (corn) eating contest.
How can your credit union participate in 2012’s Hispanic Heritage Month? It can be as simple as:
• Informing your members and the community about Hispanic Heritage Month events;
To read the full article, visit creditunionmagazine.com.Leave a comment
The following is an excerpt of a newly released white paper by Coopera’s Miriam De Dios covering the potential for reloadable prepaid cards in the Hispanic market. If you’d like a copy of the full paper, send me an email, and I’d be happy to send it over.
While our consulting capacity has allowed us to observe almost all best-practice tactics out there, we believe FIs that offer a reloadable prepaid card to the Hispanic market will be among those achieving the greatest success. Perfectly tailored to the Hispanic consumer, this type of offering has the potential to ease consumer financial pain, to build trust between cardholders and an issuing FI, and to generate fee revenue and loyalty from a powerful market.
For FIs interested in the Hispanic market, it makes sense to think in terms of products and services that would appeal to consumers who don’t have a traditional banking relationship already in place. Creating affordable alternatives to meet the needs of underserved Americans not only has the potential to get a foot in the door of the Hispanic community; it also helps your FI lead its customers down a path to financial responsibility.
Because they don’t allow for overspending, reloadable cards help underserved consumers manage their budget-conscious lifestyle. This puts issuing FIs in a position to nurture the financial growth of prospective members, quite possibly turning underserved consumers into some of their most loyal customers.
Before embarking on any Hispanic outreach, however, FIs must understand the importance of building trust slowly. While product offerings – such as reloadable prepaid cards – are a great start, adding a healthy Hispanic membership base truly is a longer-term effort requiring the support of FI staff and leadership.Leave a comment
Hispanics continue to be an important group for many of America’s states. Thanks to the newly published 2011 Hispanic Opportunity Report, commissioned by the Texas Credit Union League (TCUL), we understand even more about this population in the state of Texas.
A long-time partner of the TCUL and supporter of the Juntos Avanzamos designation, Coopera was commissioned to write the report to help Texas credit unions better understand data revealed by the 2010 Census.
Here are a few of the report’s highlights:
Two-thirds of the state’s growth over the past decade came from Hispanics.
Hispanic Texans are five times more likely to be unbanked than are the state’s whites.
Hispanics will comprise 53% of the state’s population by 2040, and whites will make up just 32%.
If credit unions attain 10% penetration of the state’s Hispanic adults, it would mean an estimated $326 million in total income and $3.5 billion in loans.
Of the nearly 1 million children added to the Texas population in the last decade, 95% of them were Hispanic.
In Texas, one in five dollars of purchasing power is in Hispanic hands.
We are pleased that TCUL has been so proactive in providing this report to its members. Texas is the first state to request specific information about credit unions’ Hispanic opportunity since the 2010 Census was finalized. Coopera believes the information in the report will motivate Texas credit unions to pursue this market more intentionally.Leave a comment
The 2010 U.S. Census revealed that one in six U.S. residents is Hispanic, and among children, it’s one in four. By 2050, analysts predict that statistic will soar to one in three.
When you look at the numbers, it’s easy to see why the term “emerging,” which has been used to describe the U.S. Hispanic community, isn’t really all that fitting today. For that reason, it’s no longer appropriate to think of the Hispanic consumer as someone your credit union may need to court in the future. Rather, you need to understand how to market to this type of consumer today.
In cooperation with CUNA, Coopera regularly surveys credit unions of varying sizes. This research has shown that a much higher concentration of credit unions have focused on serving the Hispanic market in recent years. Between 2008 and 2009, we found that the number of credit unions either executing or planning Hispanic-market programs more than tripled.
Undoubtedly you have witnessed the growth of the Hispanic market in either yours or a neighboring community. While getting ahead of the curve may no longer be possible, there is still a tremendous opportunity to tap into the power of this population now. We advise you not to wait another year.Leave a comment
By Guest Blogger Michael Adams, Vice President of Marketing and Public Relations at Greater Iowa Credit Union
Like everyone else who either worked with or knew Warren Morrow personally, we at Greater Iowa Credit Union were shocked and saddened to learn of his passing. The credit union industry and the Latino community lost an incredible leader, humanitarian and friend.
As early clients of Coopera, and we worked closely with Warren and Miriam De Dios to structure and fund a Latino initiative that included policy changes, new membership procedures, educational programming, raising cultural awareness of the staff and launching products and services specifically designed to appeal to first- and second-generation Latino families and individuals. As part of that program, Greater Iowa identified funding that would be given each year to a deserving Latino high school student who was interested in going to college.
With a vote of support from the credit union’s Corporate Giving Committee and endorsement from the board of directors, this program has been increased to three $500 scholarships that will be known in the future as the Warren Morrow Latino Educational Scholarship.
Each year, we at Greater Iowa work with the Latino Liaison staff with the Des Moines Public Schools and the superintendent of the Crawford County Schools in Denison to identify students worthy of the honor. The winning students are invited to join us at the annual Latino Heritage Festival in Des Moines to receive a check. It’s one of the most rewarding things we do each year.
By naming this scholarship after Warren, we wanted to honor his vision and legacy. In our modest way, we will be able to share Warren’s story with future generations of students whose stories, in many ways, will resemble his—of young people who came to this country as children with a hunger for education and a compelling need to do good work.Leave a comment