The Latino community represents 18 percent of the American population, according to a 2020 joint study between Harris Poll and Univision. That number is projected to grow more than 50 percent over the next decade.
While many industries are coming around to the size of this pending demographic influence, few realize the financial weight that comes with it, including credit unions.
Mutual opportunities present in serving Latino community
According to the Harris Poll/Univision study, the number of Latino households bringing in $100,000 or greater has skyrocketed more than 300 percent. While Latino incomes have risen, however, the acquisition and use of financial products and services has lagged substantially behind non-Latinos. But the same study revealed the opportunities to correct this demographic oversight. According to the Credit Union Times:
- 50 percent use credit cards vs. 70 percent of non-Latinos
- 50 percent have a checking/savings account vs. 72 percent of non-Latinos
- 29 percent carry a mortgage vs. 40 percent of non-Latinos
- 16 percent have a retirement plan or account vs. 31 percent of non-Latinos
- 11 percent have a personal loan vs. 13 percent of non-Latinos
While the number of Latinos who own an ATM/debit card is nearly even with non-Latinos, their current use of accompanying financial products trails behind. Most likely, the disparity is caused by financial institutions, including credit unions, missing the mark when communicating the benefits they offer to a demographic whose perspective isn’t necessarily the same as non-Latinos.
Communicating and creating trust with Spanish-speaking members
If your credit union is truly committed to serving your Latino community, it is important to include staff who not only speak Spanish but who are capable of explaining complex financial concepts the right way. This skill enables Spanish-speaking members to understand and dig deeper with follow-up questions. This is a prerequisite to creating loyalty and trust for the member while helping them financially and emotionally bond with your credit union over the long haul.
Depending on staff with limited to no Spanish-speaking abilities, on the other hand, can not only discourage potential new members but present a liability for credit unions that have to meet strict consumer guidelines and regulations. Your cooperative’s translated documents must be clear and understandable for your members to apply.
Implementing member satisfaction tools despite communication hurdles
Many credit unions, however, may not have the capacity to hire multilingual staff to equal such member needs. Branch locations that come up short in offering smooth communication between members and staff can negatively impact returns on member satisfaction. By implementing Spanish-language documents, interactive technology, and staff training, credit unions can still serve the Latino community satisfactorily.
The success of pertinent branches that don’t incorporate multilingual support is proper training. Even if the staff does not understand multiple languages, there are certain procedures or actions on which each staff member can be trained. Understanding how to speak with clarity, simply, distinctly, and with respect, helps members who exhibit maybe an introductory grasp of a language. Patience, and making the extra effort shows members they are just as important to your credit union community as anyone else.
Possibly the best approach to conquering communications hurdles is the use of technology. Technology has an outsized role in breaking through the language gap. Those institutions endeavoring to connect with their Latino community better should certainly invest further in the financial tools available right now.
Personal relationships with in-branch staff remains an important aspect of keeping a healthy credit union member community. Helping members learn about your credit union’s various financial products and services on their own time, however, has never been more important. Real-time mobile products can provide real-time video access to trained, professional interpreters. Today’s websites can offer on-demand, multi-language chat support. Branches themselves can include interactive kiosks to educate members on product information without the budget costs of additional staff.
How to connect with and inspire the Latino community
Outreach to the Latino community means credit unions must clearly comprehend how their products can assist their members meet their financial goals and aspirations. Your best financial product will fail if it doesn’t solve for a specific member’s precise needs.
Credit unions may have the upper hand with their “member first” mantra when it comes to guiding the Latino community to realize their financial and, by extension, personal dreams. “One of the best ways for financial institutions to reach the [Latino] market is not to position yourself as a product pusher, but rather as an educator about the products and services that fit their needs,” suggests Derek Dugan, creative strategist for Harland Marketing Services. While this wise approach has the capability to be applied to any demographic, first- and second-generation Latinos may not have the experience or familiarity with the U.S. financial services industry or banking system.
By acknowledging demographic changes, credit unions’ financial services changes with them
By consistently looking forward, many credit unions around the country are successfully planning ahead, as CUNA News highlighted last year.
Illiana Financial Credit Union started recognizing demographic and population changes throughout its service areas in the South Chicago suburbs in 2013. Three quarters of its branch locations were situated in areas with a high concentration of consumers with Individual Taxpayer Identification Numbers [ITIN]. ITINs are issued to those individuals who do not have a Social Security Number [SSN], but they possess an alternate form of identification issued by the Internal Revenue Service [IRS].
The thing is those ITIN holders were nearly completely unbanked, which is to say none of the various financial institutions in that area – save for a few predatory lenders who provided car loans or payday loans at ridiculously high interest rates – offered any financially healthy or inclusive products or services for these individuals.
At that time, Marisela Zambrano, director of business development for Illiana Financial, admitted she nor anyone else in the cooperative actually knew what an ITIN was. But she knew at least this: “Demographics are changing, and we have to change with them.” The cooperative, therefore, set out to educate themselves as much as possible about how to expand their financial services to the Latino community, regardless of their immigration status.
Those changes must have been pretty momentous, because that process of adjustment and transformation led Illiana Financial Credit Union becoming the state of Illinois’ first credit union to receive the Juntos Avanzamos (Together We Advance) designation, awarded to credit unions that exhibit a commitment to serving and empowering Latino communities.
Developing the Juntos Avanzamos program nearly 20 years ago as a Latino outreach program by the Cornerstone Credit Union League in Texas, in 2015 Inclusiv started expanding the program nationally. The program has since grown to 115 credit unions in 26 states including Washington, D.C. and Puerto Rico.
To achieve the designation, cooperatives need to exemplify that they’re striving to eliminate obstacles that keep Latino consumers and immigrants on the exterior of the financial mainstream. Taking action on these initiatives could include hiring bilingual employees, accepting alternative forms of I.D. and proof of income, and offering financial education.
However it’s not about simply “checking a box” with an abstract product or service to placate Latino consumers or members, states Pablo DeFilippi. senior vice president of membership and network engagement with Inclusiv. “The Hispanic community needs what everyone else needs,” he says. “It’s not about remittances or quinceanera loans. It’s about the whole package – mortgages, business lending, college loans, the whole gamet.”
Watch QCash’s recent joint webinar, hosted by CSS!
More than half of the credit union industry is low income-designated, and around one out 10 credit unions is minority-designated. Furthermore, our movement’s growing focus on diversity, equity and inclusion means that now, more than ever, credit unions need to be ready to serve minority populations, immigrants, as well as people of small means.
If you missed our recent joint webinar “Lending Deeper: Loan Products That Work for Everyone” hosted by CUNA Strategic Services, we urge you to watch this impactful session that aired June 23 at 10 am PT, 1 pm ET. The webinar brings together national credit union industry figures Victor Corro, CEO of Coopera, Pablo DeFilippi, Executive Vice President of Inclusiv, and our own QCash CEO Seth Brickman to discuss the forward-thinking lending products that can help cooperatives, CDFIs, and MDIs all over the country improve their financial inclusion objectives.
By uniting together, we are working to help credit unions fully embrace financial inclusion as an engine of growth and relevance. We hope you find true, practical value in the webinar!