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.
At the time Ascentra Credit Union, headquartered in Bettendorf, Iowa, first attempted to reach out the Hispanic community, it had five branches, and of those, two were in cities that showed a Hispanic population growth rate higher than national averages. With corporate America already acknowledging the importance of tailoring its products and services to Hispanic consumers, Ascentra made the decision to follow suit.
“Hispanics are a very loyal, extremely young and fast-growing population shaping the future direction of business and commerce in our country,” said Alvaro Macias, Ascentra community development coordinator. “Unfortunately, it’s a population that is largely underserved in the financial services industry. As Ascentra began to realize the influence and impact Hispanics will have in the future, we knew it was not only right to help reach out to this underserved segment but it was a good business decision for our credit union to focus on growing our outreach.”
Ascentra took steps to make sure it’d be successful in its Hispanic outreach efforts. Management initially asked three bilingual employees for ideas on how to reach this segment of the population. Some advertising was purchased and small events that catered to the Hispanic population were sponsored, but there was no formal Hispanic outreach plan or goal.
Then, they hired Coopera, a leading expert in credit union service to Hispanics, to conduct a member analysis of their operations areas, as well as to provide guidance on Ascentra’s initiatives. These initiatives included things like product and services development and marketing campaign implementation. Coopera was also instrumental in training Ascentra’s staff on the credit union industry’s changing laws and regulations impacting service to Hispanic members.
The credit union then created Macias’ position in the company to make sure the credit union was focused on building a solid foundation in the Hispanic community. According to Macias, Ascentra also added more bilingual staff to the credit union, as well as translated a page on its website into Spanish. Today, 18 out of the credit union’s 123 employees are bilingual. And, the webpage www.ascentra.org/espanol includes the names, pictures and contact information for all bilingual lending officers and call center representatives within the company.
Ascentra formalized its Hispanic Outreach Program initiative, as well as created two advisory councils, one made up of staff members and another with local community members to provide input and insight into the credit union’s and the competitions’ efforts.
“Ascentra’s initial efforts with a formal plan may have started out as more of a business development initiative for the credit union,” said Macias. “But, most recently when the member analysis from Coopera showed that 63 percent of our new member growth in 2011-2012 was from the Hispanic segment, it confirmed in some of our minds that targeting this group was a key credit union-wide growth strategy.”
To better serve Hispanics’ unique financial needs, Ascentra has introduced several products and services tailored for this underserved demographic. These efforts included money wire services to Mexico, ITIN lending and Quinceañera loans. The credit union also launched its suite of “Préstamos Para Mi” or “Loans for Me”, which is a small signature loan product that is marketed as a way to pay for life events, such as applying for citizenship, traveling to home countries and making large purchases like furniture or electronics.
From a marketing perspective, the credit union also made some changes to its campaigns to better target potential Hispanic members. “We cut out billboard advertising, as its reach and messaging was too broad. We didn’t want to convey to prospective members that our membership was exclusive to Hispanics,” said Macias. “Also, we started listing some of Ascentra’s bilingual loan officers’ names and contact information in our advertisements so new-member prospects could call them directly. Our team started getting calls right away.”
Other marketing efforts consisted of bilingual advertising, collateral and branch signage. Macias explained, “Our advertising efforts included a mix of local Spanish/English newspapers, a college radio station that has Spanish programing several times a week and a TV commercial during a Hispanic show on a local TV station. We also began offering Spanish marketing collateral for Ascentra’s products and services, as well as have signage in our branches to announce to visitors that we accept matricula cards as a form of ID to open accounts or obtain loans.”
A big push in Ascentra’s Hispanic Outreach Program was to get more involved in its local communities. According to Macias, the credit union has become involved in the Mexican consulate’s mobile visits — events to help Mexican nationals living here obtain matricula cards and passports. At these events, Ascentra staff is on hand to talk about attendees’ financial needs, as well as to invite them to stop by the credit union to open accounts, obtain loans or plan for their futures.
Macias said the member response to these efforts has been phenomenal as after every event the last 2 years, people came to open accounts or obtain loans. “Hispanic members love that they can talk with someone in Spanish who understands their needs and can explain how Ascentra can help them,” said Macias. “But, it’s definitely about more than language. Our staff goes above and beyond to make each of our members feel welcome and valued.”
Ascentra is also a supporter of the Greater Quad Cities Hispanic Chamber of Commerce and was recently recognized by the Chamber as Corporation of the Year. Macias serves as a board member on the Greater Quad Cities Hispanic Chamber of Commerce and chairs the events and program committee. As part of his Community Development Coordinator role, Macias also has conducted financial education seminars on budgeting and planning, as well as building credit, in both English and Spanish at a local church and at a Casa Quad Cities event.
The results of these efforts demonstrate that Ascentra is on the right track with its Hispanic Outreach Program. In 2012, for example, the credit union processed 89 ITIN loan applications, resulting in 59 loans. These were all small loans under $2,500 which were generally used for consolidation, credit building, and “to get by.” Sixteen of those loan recipients became credit card members as well. Macias offered additional proof: “As of last October 2012, 7.7 percent of our membership is calculated to be of Hispanic heritage,” said Macias.
Macias added these final thoughts, “For credit unions interested in adding more Hispanics to their membership base, my advice is to perform solid due diligence to understand the culture and specific financial needs of this important segment. Embrace what you learn and make any necessary changes to your credit union’s culture to accommodate these members. It is so important that you go to them — don’t expect them to come to you. This includes being at events in the Hispanic community, talking with the people there and being genuine in your efforts to show them that you care.”
“Although Hispanic outreach efforts can take a long time to implement and yield measurable results, know it’s a marathon, not a sprint,” Macias concluded. “Overtime, the rewards become worth every bit of the effort.”Leave a comment
Financial literacy is one of the most critical services that your credit union can provide members, particularly the Hispanic community in your area. Many Hispanics in the U.S. today are underserved, turning to friends and family for loans, or worse to expensive check-cashing or payday loan establishments.
With one out of two U.S. Hispanics being unbanked or underserved, your credit union has a tremendous opportunity to make a real difference in the lives of Hispanic members.
Coopera client Security One Federal Credit Union in Arlington, Texas, believes financial literacy efforts need to focus on the whole family’s financial needs. This begins by teaching children about saving and the advantages of holding a youth account and goes all the way through to helping parents understand how to improve credit scores or secure loans. Also, Security One works to educate business owners on the importance of budgeting expenses, filing taxes and preparing for audits.
Business Development Coordinator Danny Garcia said, “At Security One, we are focused on growing the Hispanic community’s ability to be more financially independent. Through our assistance and guidance, individuals are able to better themselves financially, which makes the whole community stronger. We take a holistic approach, networking and partnering with schools and universities, churches, as well as community organizations, like libraries, medical centers and government agencies, to promote financial literacy and the credit union difference.”
Some of the events Garcia and the team at Security One have participated in include:
Garcia and the Security One team is also working closely with local groups to host an upcoming 4-day mobile event to help Hispanics secure the identification documents they need
As with any new program, it’s important not to recreate the wheel when developing financial literacy initiatives. To get started, you can utilize resources and opportunities available through community partnerships, Coopera and other industry partners to supplement your programs. As Garcia and Security One have proved, networking and community involvement are vital in a credit union’s outreach efforts.
Other resources readily available to your credit union include:
El Poder es Tuyo Updates
Hispanic Outreach Webinars
International Credit Union Leadership Program
The program is designed to facilitate idea exchanges, promote foreign language development, enhance cultural diversity and improve problem-solving skills as they relate to global credit union development and management. The program also focuses on helping credit unions find new ways to attract young members.
– Apr. 7-May 11, 2013: Costa Rican participants intern in Alabama, Florida, Oregon or Washington