Trust and the Hispanic community

As credit union leaders look ahead and consider whom their borrowers will be five years from now, they are likely to see a different group than they’ve been used to. The United States is projected to become majority-minority sometime between 2041 and 2046.

The future of credit unions depends on our collective ability to attract, retain, and serve tomorrow’s borrowers. Our best opportunity to do this is to find consumers who are in need of a credit union.

Many years ago, when I was responsible for business development, I would dream of finding the perfect Select Employee Group: a large employee base without any loyalty to any other financial institution. These employees would welcome my credit union and me with open arms. Today, I believe that dream service opportunity exists within the Hispanic community.

The opportunity

Forbes1 reports the nationwide expansion of the Hispanic population has been the main driver of the country’s population growth since 2000. Hispanics currently makeup roughly 18 percent of the total U.S. population and are the second-fastest growing demographic group (after Asians). Some 25.8 percent of all children ages nine and younger are Hispanic, further underscoring their growing demographic importance.

Five strategic considerations for credit union leaders

  1. The Hispanic community is a large and growing market, largely overlooked by most mainstream financial institutions.
  2. The Hispanic community is younger with a majority entering or in their prime borrowing years.
  3. Hispanics demonstrate a high degree of loyalty to brands they trust.
  4. Hispanics are high adopters of mobile technology.
  5. The Hispanic community especially needs our products and services, auto loans, home loans, and small-business loans.

Establishing trust

Credit unions can’t effectively serve the Hispanic community without establishing trust. A decision to serve the Hispanic market is strategic. It’s not a short-term plan to meet your loan goals next year. The level of trust earned is directly proportional to the investment made to serve the market. If you’re willing to invest in one employee who speaks Spanish, you’ll attract a few members, but it isn’t enough of an investment to really make a difference.

Juntos Avanzamos is a turnkey strategy

If you want to earn lasting trust with the Hispanic community, there’s a resource to guide you through the journey. It’s called Juntos Avanzamos – Together We Advance. This is a designation for credit unions committed to serving and empowering Hispanic consumers. The designation now has nearly 100 credit unions located throughout the United States and Puerto Rico.

The designation provides a comprehensive framework for credit unions seeking to connect with the Hispanic community. It helps them identify and remove barriers by expanding the type of documentation needed for account-opening purposes and using a more flexible loan-underwriting approach. By embracing the Juntos Avanzamos (JA) designation, credit unions adhere to a set of governing principles intended to build trust with this demographic: affordability, transparency, ease of use, bilingual capability, and understanding of the culture.

The designation provides concrete standards for service and engagement of Hispanic/Latino consumers for credit unions, and to help Latino consumers find institutions that welcome them and their business. Juntos Avanzamos is also a platform that leverages the growing number of partner organizations that want to connect with credit unions committed to meeting the needs of this population: Catholic Charities, Mexican Consulates, Cities for Citizenship (a growing number of municipalities promoting financial inclusion for immigrant communities), etc.

Credit unions are qualified based on their readiness to serve the market. Points are earned for a host of things that range from team/board diversity levels, Hispanic community partnerships, translation levels, and acceptance of alternative identifications for accounts and loans. Once a credit union has earned the designation, it proudly announces its accomplishments to the Hispanic community. It works – JA gives credit unions something concrete to take to the community. It’s so much more than a verbal commitment of “we’re here for you.” It’s a very public proclamation that usually includes elected representatives and Consulates.

We get to work with many JA-designated credit unions. I can tell you, the process of earning the designation goes a long way toward helping build bridges and trust with the community, which results in high loyalty and the corresponding growth that accompanies it.

Leading credit union advocate Pablo DeFilippi, SVP of Membership and Network Engagement at Inclusiv, was on point when he said, “The Juntos Avanzamos designation is an effective tool to help Hispanics find a credit union willing and able to provide asset-building opportunities. The extent to which we connect with this demographic will determine the future and relevance of a significant part of our industry.”

Many of our clients have made the strategic decision to assertively serve their local Hispanic communities. They see not only an opportunity, but also a need in the community, and committed the time, energy, and resources to meet that need. We guide our clients through the entire process, starting with creating a unique business plan, gaining board buy-in, board and staff training, and even translation services. This is why we’re a proud partner of the Juntos Avanzamos program. Click here to learn more.

If you think the Hispanic market might be right for you, don’t miss an important Inclusiv and Univision Communications, Inc. webinar titled, “Banking on Hispanics for Growth: The Importance of Serving the Hispanic Market” on Thursday, June 20, 2019, at 1 p.m. EST. This the second installment of the Juntos Avanzamos webinar series and is open to all credit unions. Click to Register.

Why it matters

The strategic reality is that credit union loan growth is becoming increasingly more challenging and will continue on this trajectory during the next five to 10 years as population, generational, socioeconomic, and consumer preferences shift. Credit unions that foresee and plan ahead for these changes are more likely to remain relevant. The Hispanic population is an ideal opportunity for those credit unions located in communities with emerging and growing Hispanic populations.