Should your credit union have a Hispanic growth strategy in 2014 because it’s the right thing to do or because it’s an investment in the future of your credit union? The answer is that your credit union shouldn’t do it for just one of these reasons, but rather for both. There’s a philosophical and business imperative and credit unions serious about serving the Hispanic community need to believe in both to be successful. Warren Morrow, late CEO and founder of Coopera, said it best: “It’s not only important to want to serve these markets, but it’s imperative for a credit union to realize that it needs to serve these markets to remain viable and grow.”
How does this notion translate into practical terms that your leadership team can understand and rally behind? Well, it starts with building the right organizational mentality at your credit union. That means understanding and embracing the business case, as well as recognizing the community and social impact serving a new market will bring to your credit union.
In our work with credit unions, we often run across cooperatives that get stuck in the business case stage and lose sight of how this connects with their mission – the ‘people helping people’ reason that sparked the credit union movement. However, let’s not misunderstand the fact that serving the Hispanic market does not mean just serving an underserved market. It means being representative of your field of membership and being inclusive of people and a community you may have unintentionally been excluding. This may include unbanked and immigrant Hispanics; however, it also includes the upwardly mobile children of first-generation Hispanics and Hispanic business professionals and business owners. The Hispanic market isn’t defined by one segment. What does define the Hispanic market today is that it’s the largest, fastest-growing, youngest and most underserved market in the U.S. – a sound bite that should ring loud and clear in your credit union’s business case.
Credit unions that have embraced both these philosophical and business imperatives have also made a significant advancement in their journey to becoming the preferred financial institution of choice for the Hispanic market. The remaining trek on this journey involves adapting to the market instead of forcing the market to adapt to the credit union. Just as pushing online banking to someone who doesn’t have access to a computer isn’t going to take, expecting a new Hispanic member to be comfortable with a loan program that isn’t relevant to his/her financial needs and cultural preferences isn’t going to be well received. This is the stage where you enact the heavy-lifting of implementing new operational strategies and tactics to better serve your new community.
So, what does success look like once a credit union has the right organizational mentality and adapts to the market? In 2013, Coopera found that credit union clients that tracked their Hispanic membership growth efforts and had comprehensive Hispanic growth strategies in place saw a median annualized Hispanic membership growth rate of 7.6 percent over the course of 12 months. This was nearly twice the median for their non-Hispanic membership growth, which was 4.1 percent over the same period. Various Coopera clients saw Hispanic membership growth rates well over 20 percent over the course of a year.
Like W.L. Bateman said, “If you keep on doing what you’ve always done, you’ll keep on getting what you’ve always got.” Don’t let the nation’s largest, fastest-growing, youngest and most underserved market escape your credit union’s strategic plan in 2014. Start the new year with a new growth strategy and know you’ll not only be investing in the long-term growth of your credit union, but also in the long-term growth of the credit union movement as a whole.