Five Multicultural Insights for Financial Marketers
How important are multicultural consumers to credit unions and banks? A TruStage study of African American, Hispanic and Asian consumers by CUNA Mutual estimates their collective buying power to be equal to Germany, the world’s fourth-largest economy. These segments represent the future for many institutions, with annual spending growth up to 5%. So here are five thought-provoking insights from the study, worth considering as you market to your prospective members and customers.
Insight #1: Robust mobile channels are essential. About 40% of Hispanic and African American consumers surveyed used mobile apps for financial research, leading all segments. These two groups were nearly twice as likely to apply for financial accounts and products through mobile apps; they were also more likely to check their financial accounts every day, with some using their apps and online tools almost hourly. This level of mobile engagement poses serious marketing opportunities for financial institutions, as well as serious challenges delivering round-the-clock access.
Insight #2: Speed, convenience and flexibility are worth paying for. Speed of lending was important to higher percentages of African American (22%), Hispanic (21%) and Asian (14%) consumers than to Caucasian (10%). This applied to convenience and flexibility as well. Nearly one-quarter of surveyed Hispanics said they would pay higher fees for convenient financial products (more than double the rate of Caucasian or Asian people surveyed), with African Americans finishing a strong second.
Insight #3: Optimism and hustle aren’t just buzzwords. Asked if they would become rich in their own lifetimes, all three multicultural segments generated a higher share of “Yes” responses than Caucasians. African Americans (21%) were three times more likely to see themselves becoming rich, with Asians and Hispanics not far behind. Yet many expected that it would take more than one job to achieve their financial goals, creatively pursuing side businesses or new educational opportunities. One further note: these consumers valued businesses that also hustled for them, such as alternative lenders and check cashing services that offer fast approval and turnaround, flexible payment schedules, small dollar loans and easy online convenience.
Insight #4: Loans and protection plans offer niche opportunities. Percentages of consumers who had taken out some form of loan were fairly similar across all segments, ranging from 61% to 76%. But the type of loan often revealed big differences. African American respondents were roughly twice as likely to take out student loans as any other group, while Hispanic consumers were about nine times more likely than Caucasian respondents to take out a small business loan within the next five years. Another popular product was payment protection plans, about twice as common among surveyed African Americans (32%) and Hispanics (27%) as among Caucasian (17%) and Asians (12%).
Insight #5: Emotional connections matter. CUNA Mutual notes that its multicultural respondents were more likely to view finance through an emotional “us instead of I” prism – taking out a loan to help someone else, working together to serve the community, doing business with organizations that make a difference. Hispanic, African American and Asian segments all exhibited a heightened focus on community, so institutions must show multicultural consumers that they are an active and connected presence locally.
At Creative Co-op, our experience communicating with customers from a wide range of cultures can help your financial institution build genuine connections with the fastest-growing segments of your marketplace. Just email us today to learn more, or call us at 603-658-1600.