Historically, financial service companies have been slow to focus on the burgeoning U.S. Hispanic market. While certain sub-categories, namely money transfer services, check cashing and mortgage providers have aggressively pursued Hispanics, most efforts have been focused on the “unbanked” — an unsophisticated and relatively small segment of unacculturated Hispanic consumers that were generally outside the mainstream financial world.
However, with continued growth of the Hispanic population and the well-documented increases in socio-economic status of Hispanics — e.g., college enrollment by Hispanics has surpassed Whites and Hispanics were the only major ethnic group to see a decline in its poverty rate in 2014 – the financial services industry is paying a lot more attention. As Univision reports, from 2005 to 2010 there was a 210% increase in investment in Spanish-language media by insurance advertisers. More and more financial services firms are publishing research on Hispanics and financial matters, as a 2014 Wells Fargo survey indicated that Hispanic investors have a strong appetite for financial education and more sophisticated investment knowledge.
Unfortunately, there is still a long way to go for financial services in the Hispanic market. The majority of Hispanics — 77% — agree with the statement that, “I wish more financial institutions would offer products and services with Hispanics in mind” (Yankelovich MONITOR Multicultural Study 2010). Moreover, a 2011 AHAA study indicates that while the Financial Services category has increased its Hispanic ad spend by 3% from 2006 to 2010, its allocation of Hispanic marketing spend (as a percentage of its overall revenue) was under 3.65%, putting it into the “laggard” category.
Millennials present an equally complex and fundamental challenge to financial service companies. They have lower incomes, high debt levels (mostly driven by high levels of student loans), and a desire to interact in new ways with companies. However, their well-documented pragmatism makes them an attractive target for financial services such as insurance, banking and investment services. Banks and other financial services firms are understandably paying a lot of attention to Millennials, as they look to evolve their product offerings, marketing and approach to better serve their unique attitudes and beliefs.
It is at the intersection of these two huge trends that we and our partners have published a third wave of the Hispanic Millennial Project research study entitled “Hispanic Millennials & Financials Services.” It provides one of the first glimpses into the attitudes and opinions of Hispanic Millennials concerning money, banking, savings, financial wellbeing and emerging technology for financial services. The Hispanic Millennial segment continues to be one of the most important and misunderstood consumer demographics in the U.S. – and even more so when it comes to financial matters.
Some of the key findings of the research show that finances, money and financial relationships are important topics for Hispanic Millennials:
The Hispanic Millennial Project Wave 3 research also reveals some very important points of tension characterizing the financial attitudes of Hispanic Millennials. These points of tension include:
The big takeaways for financial service marketers are that Hispanic Millennials have nuanced and sophisticated attitudes about wealth. They are early adopters of financial services technology. And while they continue to live in two worlds when it comes to attitudes towards saving, banking relationships and their role in providing for their families financially, they are eager for more education, support and empathy from financial services companies.