Banked and unbanked Hispanics, and the question why?
21 Feb 2004|Felipe Korzenny
It is important to make a distinction between those Hispanics that are “banked” and those who are “unbanked.” Largely, unbanked Hispanics tend to earn less money and be relatively new immigrants to the United States. About half US Hispanic adults have checking and/or savings accounts and/or general purpose credit cards. Interestingly, approximately half US Hispanic adults are bicultural or English dominant. It should be of no surprise that those more acculturated Hispanics are more likely to be banked. There are at least two distinct opportunities for the US financial services industry in the US. One consists of enhancing the financial savvy of those who are more acculturated and earn their loyalty and portfolio. The other consists of grooming the less acculturated half of the market that is likely to be “next generation” of banked Hispanic consumers.
Capitalizing on the more acculturated Hispanic consumer is somewhat more difficult because these consumers are more dispersed geographically and also are better informed than their counterparts. Still they represent an important opportunity for brand switching and for up-selling and cross-selling. These more acculturated Hispanic consumers tend to respond well to affinity programs that emphasize networking and getting ahead.
Capitalizing on the less acculturated Hispanic consumers requires more vision and more patience. These consumers have less resources and are more deliberate in handling their finances. Still, they represent major opportunities. A key initial opportunity is in the money transfer category, and subsequently in most other financial product areas. How do you conquer the emerging, less acculturated, Hispanic:
There are too many myths about Hispanic predispositions towards financial services. More than negative attitudes towards any services, one could rather speak of lack of awareness and understanding. Those who groom the Hispanic market shall gain its favor.prev next