I recently spoke at the Financial Capability Network conference in San Diego where I focused on the U.S. Hispanic business opportunity for the financial industry. Since this segment has not traditionally been targeted by financial marketers, we felt it was crucial to highlight U.S. Hispanics’ strength in terms of scale, growth, and financial viability. We focused on what this means for the industry starting with those in attendance, including BBVA, MassMutual, MasterCard and LendingTree.
When we look at financial services growth over the past five years, we see Hispanics have outpaced non-Hispanics across a variety of financial products and services, including credit cards, auto loans, and mortgages. Hispanics are also more likely to engage in fin-tech activities, especially on their mobile devices. Think of what the U.S. Hispanic contribution could be once the financial industry starts speaking to them.
Below are three key takeaways from our session:
- U.S. Hispanics are large in scale and offer a longer lifetime value compared to any other consumer segment.
It bears repeating that U.S. Hispanics are not a niche segment. They are an attractive consumer market that has reached a critical mass—59 million to be exact. When we consider millennials, Hispanics are nearly 1 out of 4 of all millennials today and will drive 100% of the projected growth of this demographic over the next 10 years. They represent a longer lifetime value given their younger median age and longer lifespan compared to any other ethnic or racial consumer segment. This becomes even more important when you consider Hispanics’ brand loyalty attributes.
Hispanics are nearly 1 out of 4 of all millennials today and will drive 100% of the projected growth of this demographic over the next 10 years.
- U.S. Hispanics are a financially viable segment with consumers that have yet to enter their peak earnings years.
Hispanic consumer expenditures in 2016 were $1.4 Trillion, larger than all but 11 countries in the world, bigger than the GDP of Russia, Spain, Australia, and Mexico to name a few. Their household formation milestones, such as starting families at a younger age, buying homes and car purchases, drive growth across numerous categories essential for the health of the U.S. economy.
- Understanding Hispanic culture is important to successfully engage and build a lasting relationship with these brand loyal consumers.
Trust, respect and familiarity are critically important to successfully engage with Hispanics. By addressing cultural identifiers, such as the importance of family, entrepreneurialism, and language, brands will be able to break down barriers and connect in a more meaningful way with Hispanics. Understanding these cultural attributes are signals that as a marketer, you respect, value and want their business. Hispanics are loyal consumers and will deliver growth to those financial institutions that engage with them.
We are currently conducting our first-ever Hispanic and financial services research study, follow us @Hispanic411 for more insights and information on the results.