Future Trends of Hispanic Demographics
Reaching the Hispanic community requires an understanding that their needs, goals and objectives are different than non-Hispanics.
The Hispanic community accounts for 18% of the nation’s population, according to a recent study from Univision Communications and Harris Poll, and is expected to grow more than 50% over the next decade. While most businesses understand the size of this growing demographic, few are just now realizing the financial weight they are bringing with them – credit unions included.
Opportunities to Serve the Hispanic Community
According to the Univision research study, the number of Hispanic households earning $100,000 or more has skyrocketed more than 300%. But while incomes have risen substantially, use of financial products among the Hispanic population has lagged behind non-Hispanics. The same study revealed where there are opportunities for credit unions to correct this.
While the number of Hispanics who carry an ATM/debit card nearly equals non-Hispanics, their current utilization of other financial products is trailing behind:
- 50% use credit cards compared to 70% of non-Hispanics;
- 29% carry a mortgage compared to 41%;
- 11% have a personal loan compared to 13%;
- 50% have a checking/saving account compared to 72%; and
- 16% have a retirement plan or account compared to 31%.
The discrepancy in financial product adoption isn’t due to a lack of interest, as Hispanics are just as interested in them as non-Hispanics are. The disparity is most likely due to banks, credit unions and other financial institutions missing the mark when trying to communicate the benefits of the services they provide to a demographic whose financial perspective differs from non-Hispanics.
How to Speak to Your Spanish Members
If you are committed to successfully serving the Hispanic community, your staff must be able to not only speak Spanish, but explain complex financial concepts correctly. This requires hiring individuals whose first language is Spanish or can speak the language fluently.
Relying on individuals with limited Spanish speaking abilities may not only deter potential new members, but be a liability for credit unions that must meet strict consumer regulations. Your credit union’s translated documents still need to be clear for your members to apply.
Overcoming Communication Barriers
Not all credit unions may be able to hire multilingual staff to meet their members’ needs. Branches that are unable to provide smooth communication between members and staff will adversely impact member satisfaction. With multi-language documents and training, credit unions can still serve the Hispanic community confidently.
Critical to the success of branches without multilingual support is proper training. Even if they don’t understand multiple languages, there are behaviors each staff member should be trained on. Knowing how to speak distinctively, simply and with clarity helps members who may have just a basic understanding of a language. Remaining patient and going out of your way shows members that they are important to your credit union.
Perhaps the best approach to overcoming communication barriers is utilizing technology. Technology plays a vital role in bridging the language gap. Credit unions that are looking to grow their Hispanic membership need to invest in the tools available today.
As powerful as in-person relationships are, enabling members to learn about financial products on their own time and at the location of their choosing has never been more important. Mobile apps can provide real-time video access to professional interpreters. Websites can offer on-demand, multi-language chat support. And branches can include interactive kiosks to further member education without the overhead costs of adding additional employees.
How to Reach the Hispanic Community
As with any demographic, reaching the Hispanic community requires credit unions to understand how their financial products can help members meet goals and aspirations. Even the best product won’t turn a prospect into a member if it misses the mark on how it meets someone’s specific needs. According to a Bank of America study, Hispanics define prosperity differently than non-Hispanics. For them, living the American Dream and pushing forward shapes their financial views. This is in contrast to non-Hispanics, who more often seek stability.
When it comes to helping the Hispanic community realize their dreams, credit unions may have the upper hand with their “member-first” approach. Derek Dugan, a creative strategist for Harland Marketing Services, suggested: “One of the best ways for financial institutions to reach the Hispanic market is not to position yourself as a product pusher, but rather as an educator about the products and services that fit their needs.” And we agree! Although this approach can be applied to any demographic, first- and even second-generation Hispanics may not be familiar with the U.S. banking system.
Competition between the specific products and services financial intuitions sell is fierce. And given the ongoing race to quickly increase market share, it’s easy to dismiss a longer, education-first acquisition strategy. Unfortunately, it is for this reason credit unions are missing out on this growing demographic. Those that commit to the game long-term will be rewarded not only with new members, but loyal ones.
Creating and Offering Documents in Multiple Languages
All documents in your credit union need to be offered in the languages of the members you serve. However, this does not mean creating verbatim translations of pre-existing paperwork. Too many businesses, credit unions included, use a copy-and-paste approach when creating documentation in different languages. This approach could end up doing more harm than good.
To effectively market to the Hispanic community, marketing collateral needs to be specifically designed and developed to appeal to their needs. As referenced above, the reasons why members of the Hispanic community may benefit from becoming members of a credit union differs from non-Hispanics. Your marketing material should reflect this.
We do not recommend hiring a translator to convert current material into different languages. Instead, hire a marketer familiar with the target market you are looking to penetrate and a forms supplier that can provide you with custom solutions for your lending packages. Their insight will enable them to not only translate financial terms correctly, but write copy that speaks appropriately to the Hispanic community. The result will be thoughtfully-crafted materials your new audience will appreciate and be attracted to – and a win for both the credit union and your future members.
Richard Gallagher is CEO of Oak Tree Business Systems, Inc. in Big Bear Lake, Calif.