by: Miriam De Dios and Joe Day, CUNA
When it comes to attracting Hispanic consumers, one-size-fits-all financial products and services don’t work. This important market’s cultural and linguistic nuances dictate a tailored approach. Therefore, credit unions looking to provide fair, dignified financial services to the Hispanic consumers in their communities must tailor their products directly to the racially and ethnically diverse members of the Hispanic marketplace.
Fortunately, there are three products tailor-made for the Hispanic market. If your credit union is looking to invest in service to the largest, fastest-growing, youngest, and most underserved segment of today’s population, try these three financial products to kick start your efforts:
- Culturally relevant loans
- Prepaid reloadable cards
- Mobile banking
Culturally relevant loans
Whether it’s to finance a new car, buy a home or pay for a college education, many members of the Hispanic community are looking for loans structured to help them build credit and ease into the financial mainstream. Developing a culturally relevant loan portfolio doesn’t necessarily mean creating a completely new loan offering. It may be as simple as repackaging an existing loan offering to meet the needs of Hispanic consumers.
But repackaging requires more than simply translating the terms and conditions into Spanish. It’s also important for credit union staff to be equipped to communicate the features and benefits, the fee structure and repayment options, as well as other relevant financial terminology. Yes, it may be important to do so in Spanish. But, it will be equally as important to do so in a manner that takes into account the applicant’s history, culture and potentially negative perceptions of U.S. financial institutions.
One loan option you may want to consider marketing to the Hispanic community is a multi-purpose lifestyle loan. This can simply be a share secured or personal loan up to $1,500 to help individuals at different life stages. Members may use a loan like this to buy new appliances or furniture, make small home improvements, take a vacation or pay for school expenses.
Or, your credit union can develop its own unique loan program to serve the particular needs of its local Hispanic community. For example, Greater Iowa Credit Union in Ames, Ia., offers a loan to help Hispanic parents plan and prepare for their daughter’s Quinceañera, a celebration held on a Hispanic teen’s 15th birthday and marking her entrance into adulthood.
Another example is the loan program offered at Latino Community Credit Union in North Carolina. The Durham credit union offers a “Dreamer Loan” to cover the application costs for educational and employment opportunities through the United States Citizens and Immigration Service (USCIS) deferred action process. The loan is designed specifically for Hispanics brought to the U.S. as children.
Prepaid reloadable cards
Prepaid reloadable cards offer simple, secure and safe access to a Hispanic cardholder’s money, especially if he or she is not ready for or able to use traditional banking services, like a checking account. Because prepaid reloadable cards don’t allow for overspending, they help Hispanic-community cardholders manage their money, as well as establish a relationship with the issuing credit union.
What’s more, prepaid reloadable cards save cardholders time. With their plastic, they can pay bills online or over the phone instead of spending the time to secure expensive money orders. Prepaid cards also allow Hispanic cardholders to enjoy conveniences like shopping online, paying at the pump and even sending money more affordably to family members outside the country.
Language and cultural relevance must play a role in any prepaid card program, from cardholder support services to marketing. As well, credit unions looking to offer a prepaid card product to Hispanic members must provide a card with an easy-to-understand fee structure and as few restrictions as possible on how, when and where the card can be used. Such a design encourages cardholders to transact, creating an additional revenue stream for the credit union in the form of as-yet-unregulated interchange income.
A recent study by Pew discovered that more than 87 percent of English-speaking U.S. Hispanics owned a cell phone. What’s more, the study found that Hispanics have more features and use their cell phones more often as compared to the American population in general. Credit unions also need to be able to connect with their Gen Y prospects, better known as the “mobile generation,” many of whom belong to Hispanic communities.
With a growing number of Hispanic consumers connecting to online applications through their mobile devices, your credit union has a great opportunity to reach both first and second generation Hispanics by offering bilingual mobile banking options, like text message alerts, as well as online banking services in Spanish.
As your membership base continues to diversify, it is unrealistic for you to expect the Hispanic community to conform to your products and services — it’s got to be the other way around. Your credit union should not only offer the products and services Hispanic members need now, but also develop programs that build longer-term relationships. Culturally relevant loans, prepaid reloadable cards and mobile banking are the perfect tools to help you better serve Hispanic members today and well into the future.
Miriam De Dios is CEO of Coopera, which helps credit unions reach the Hispanic market.
Joe Day is Director of Publishing Operations for Credit Union National Association (CUNA), a strategic growth partner of Coopera in Hispanic outreach. www.CUNA.org