By Shana Richardson, CEO, Ser Technology

The US Hispanic population is a very attractive target for financial institutions and taking the time to get to know more about their culture and struggles can help you become their trusted financial partner.

For example, did you know Hispanics are the largest minority in the US, accounting for 18.1% of the population, according to the U.S. Census Bureau? They are the second fastest growing population in the US, accounting for nearly half the US population growth according to Interexchange.org. The vast majority live in California, Texas, New York, Florida and Illinois, according to Augusta University research.

This large and fast-growing minority group is also younger than the US overall, with 60% of Hispanics in the millennial generation or younger, Lionbridge reported. The growth of this group means that the Hispanic population of the US workforce will triple by 2020, the Bureau of Labor Statistics projected. Credit union can’t afford to miss out on this opportunity: Hispanics are increasing in the US, young, getting educated and working, making them an important part of credit unions’ current and potential membership.

Financial inclusion is a primary goal for the Underground Community. Is it yours? Click here to join us!

To serve this burgeoning group, credit unions must dig into their culture and become a part of it. Family is a critical social unit, according to Ohio State University. The Hispanic culture places emphasis on moral responsibility to assist other family members, nuclear and extended, who are experiencing financial problems. Research from Prudential showed more are married compared to the general US population, and nearly half have children under the age of 18. Interexchange.org found that grandparents are quite involved in raising their grandchildren.

Hispanics bring many of their cultural ties to the US with them, including popularizing soccer in the US. In addition to supporting household members, Prudential discovered, 42% of non-U.S. born Hispanics send money to relatives in their home country, and 20% do not have any saving or investment products. Hispanic-owned businesses, according to BusinessWire, have grown 31.6% since 2012, more than double all U.S. businesses. At the same time, 19% live below the poverty line versus 13% of the general US population, according to the Center on Budget and Policy Priorities.

Those bits of data begin to tell a story and can help shape your interactions, from marketing materials to employees and training to financial education efforts. Prudential’s research found that lack of understanding of retirement funds and other financial products led to Hispanic people not using them, in addition to a lack of trust. With work and planning your credit union can build that trust and understanding.

For starters, community is a priority for the Hispanic community, so becoming a part of it is key for financial institutions to reach them. Collaborate with community centers and churches for financial education and training. Support their interests, such as soccer leagues, with your money and your time. Earn the endorsements of community leaders to serve as ambassadors of the institution and help gain trust of the Hispanic community. They are family oriented, often low-income but also aspirational, so marketing must reflect that.

The Underground Community #StandsUp for financial inclusion. If this sounds interesting to you, click here to join us!

Products and services must also represent your institution’s dedication. Hispanics face income challenges, which affects their ability to save, borrow and invest. In addition, they are much more likely to support family members and friends through rough financial patches than the general US population. Offering flexibility in loan repayment plans can be an attractive benefit to the Hispanic community. Designing investment and savings programs that are specific to their income and their needs is important. It will require a low barrier to entry and quick, easy access to funds as needed. Because convenience is a top priority for Hispanics. Allowing pooling of family resources into one account makes sense.

Prudential’s findings suggested personal debt is culturally taboo in the Hispanic community. A full 62% of Hispanics respondents asserted “good debt” does not exist, while 49% preferred to pay cash for an item or not buy it all. The reality is that 69% of respondents understood it’s nearly impossible to live without debt, creating educational opportunities for financial institutions. For example, 77% felt it acceptable to borrow for large purchases, such as homes, cars, college or a business. Because of their cultural mores, many Hispanics do not have credit scores at all, which makes them appear a bigger risk than they actually are, according to UnidosUS. You can show them how to build credit responsibly to better grow their assets.

According to MediaPost, banks, investment firms and life insurance companies devote less than 2.5% of their total marketing spend, and that is skewed upward by a few banks that are heavily investing.  This minute level of spending stands in contrast to the economic realities. Hispanics drove 38% of aggregate consumer spending from 2002 to 2012 and growing. Hispanics also account for 52% of US homeownership growth since 2002, with a net gain of 2.8 million homeowners compared to a net decrease of 85,000 homeowners among Caucasians

Hispanics are not necessarily unbanked or underbanked. According to the FDIC, 48% of Hispanics in the US are fully banked, while just 18% remained unbanked. This means they’ve become more accepting of US financial institutions and should be viewed as a core growth market segment.

Providing financial literacy training helps build financial institutions’ roles as trusted advisers. Sessions and informational materials can be in English and Spanish. Marketing as well as the composition of the institutions’ employees should demonstrate diversity, Spanish-influenced music and imagery, Lionbridge recommended. And don’t neglect social media! Hispanic adults are the most active of all ethnic groups on social media at 72%.

Financial institutions must also tell the story of how convenient they are, and it must be backed by flexible access, targeted products and services, and incentives, such lowering interest rates after so many on-time loan payments. Marketing should express that the institution exists to provide fast and easy access to the right products at the right times.

The Hispanic community is a young and growing segment in the US, with hopes of making a better life for them and their families. They are becoming more accepting of US financial institutions and they recognize, while they culturally don’t approve of debt, it’s very difficult or impossible to live debt-free. They have certain challenges, such as higher unemployment and lower income levels than other segments, which provides opportunities for financial institutions to assist. First, the institution must be trusted, which means becoming entrenched in the community and cultural norms, and then sharing that messaging through financial education, activities in the community, marketing and service.