Financial marketing to the Hispanic community is becoming increasingly important in the U.S. and around the world, as Hispanic and Latinx populations are on the rise. Now encompassing some 17% of the total U.S. population, Hispanics are too large of a demographic to ignore. In addition, with a lower percentage of banks focusing on Hispanic banking, switching some attention to creating marketing campaigns for your Hispanic market will help you to create a good impression and possibly drive more consumers than a generic or broadly focused campaign.
While you can and should create specific Hispanic banking marketing campaigns tailored to Latinx and Spanish markets, simply following and engaging with Hispanic banking trends will also help you to gain traction, build trust with your market, and develop customer loyalty. While specific needs and product requirements are as diverse for Hispanic markets as for any other demographic, these 3 trends will help you reach your Hispanic market.
While stereotypes suggest that many Hispanics are unbanked (meaning they use other forms of payment than banks), this is very often untrue. 19.6% of Latinx consumers are unbanked (versus 7.4% of the total population), meaning that many are, but often relating to issues of convenience and bank accessibility.
Catering financial marketing to the Hispanic community by offering strong digital solutions in several Latinx languages will help you to reach your audience, and in a way that will market itself. If consumers can easily access and use digital banking services in a language they are most comfortable with, they will go to your bank. Today, some 69% of all Hispanic banking is done on mobile or tablet, with a 27% increase in adoption between 2013 and 2018. With primary barriers to adoption including lack of language support and security, most banks could easily tailor digital applications to appeal to Hispanic banking markets by integrating more languages and creating a stronger focus on security. Why is this important? In the same study, nearly 30% of surveyed consumers suggested they would switch their primary bank account for (better) mobile banking solutions.
Here, banks like Wells Fargo and Bank of America provide quality examples of what to do right, with real changes to mobile banking experiences. Rather than simply translating content, these banks create unique, language-appropriate, and culturally sensitive, creating information that makes sense rather than simply being translated.
Entrepreneurship and Investment
Hispanic investors are driving entrepreneurship and investment across the U.S., with Hispanics as much as 1.5x more likely to start a new business than any other demographic. With 4.2 million + Hispanic owned businesses in 2016, Hispanics are one of the most important demographics for small business loans. At the same time, many banks are still focusing on small-scale loans for Hispanics, rather than creating valuable entrepreneurship programs.
Taking a combined approach of offering education and Entrepreneurial loans could help you to drive engagement and capture this rapidly growing demographic. For example, you could create a financial literacy program tailored towards Hispanic banking markets and focusing on business management, finances management, bookkeeping, and money management. Giving consumers the tools they need to succeed will drive interest in your bank, and should they follow through with a small business loan, will reduce risk on your end.
While luxury purchases are declining in many markets, Hispanics are driving luxury purchases of homes and automobiles. This is in part due to an average of a 4% increase in average income between 2017 and 2018 and in part because of a focus on owning a home for a family and owning a vehicle. Hispanics are more likely to invest in a luxury vehicle as their first car, and offering auto-loans specifically catering to this audience will help you to capture them. How can you help? Creating efficient auto-loan processes enabling younger consumers to take out larger loans for cars, and using either collateral for secured loans or slightly higher interest rates to offset the added risk will net you those customers.
Similarly, Hispanic markets are driving home purchases, accounting for an average of 52% of the growth in U.S. home ownership. That’s incredibly important, considering many banks still focus on smaller-ticket items such as tax prep when marketing to Hispanic audiences. In 2017, some 167,000 Latinx became homeowners, which is significant. At the same time, many banks are hesitant to offer mortgages, simply because not all buyers are certain of their stay in the United States.
The 2017 housing report also identified barriers such as a shortage of nationally affordable housing and a large number of natural disasters in areas such as Texas, Florida, and California, where Hispanic concentrations are highest. How can you help? Offering higher mortgages with lower interest rates or payments would help you to drive more consumers, but this should be done with balance and attention to the individual’s ability to pay the mortgage back over the lifetime of the loan.
Hispanics also drove some 38% of consumer aggregate spending between 2002 and 2012, and those numbers are only rising. Creating Latinx focused spending and credit accounts will drive interest and engagement, especially with language and culture-focused marketing campaigns.
The Hispanic market is rapidly growing in the United States and is quickly set to become the 7th most important economic force. Switching at least some marketing focus towards Hispanic banking trends will help you to reach your audience and cater to their actual needs, so that you stand out from competitors, better satisfy customers, and improve your ability to market to one of your largest demographics.
While there are many important trends in banking for Hispanic and Latinx markets, adopting products and strategies that meet Hispanic-specific needs including language, desire to purchase rather than rent or lease, car ownership, and investment and entrepreneurship will take you a long way towards appealing to your market. Importantly, no token effort will do, as poor translations of digital content are actually worse than no language options at all.
No matter what the size of your bank, Hispanic banking audiences are increasingly important and taking a multicultural approach to marketing will help you to grow.