Adapt to the new market
The other half of the battle is adapting to the new market instead of waiting for it to adapt to your credit union. Doing so involves four key areas:
1. Personnel. Staff should reflect their communities in terms of language and culture. In most markets, recruiting Spanish bilingual and bicultural staff is essential. Train staff, managers, and board members about this market’s cultural nuances, and the benefits of serving the Hispanic community.
2. Products. Credit unions have products relevant to Hispanics, but they may not package these products in ways that are clear or useful to this market.
Some credit unions start with affordable transactions, then steer Hispanic members toward loans and deposits. Many Hispanics are uncomfortable with financial institutions. You need to gain their trust, then make them a more participatory part of your membership.
Services and activities that have become more prevalent in serving the Hispanic market, according to CUNA’s 2009-2010 Survey of Potential Members, include risk-based lending, acceptance of taxpayer identification numbers, Spanish-language materials, low-cost international remittance services, ads/articles in the Spanish-language media, nonmember check cashing services, and Spanish-speaking staff.
3. Processes. Some processes (i.e., credit analysis and identification) were established without sufficient understanding of Hispanics’ unique circumstances, especially those of immigrants. Credit unions must adjust these processes to serve this market.
The same goes for lending policies. You can’t use the same policies for this group as with a white-collar field of membership. If you do only A and B lending, you’ll have a tough time.
4. Promotion. Traditional advertising and marketing might be relevant so long as the local Hispanic market has been segmented and their needs and values are understood. But the most effective strategy for reaching most Hispanics is to activate grassroots social networks, use word-of-mouth advertising, provide financial literacy, and partner with key messengers within the Hispanic community.
Credit unions can overcome language barriers without having a huge bilingual staff—it’s certainly possible for someone who speaks only English to be welcoming and to make members comfortable.
Warren Morrow is CEO of Coopera Consulting, Des Moines, Iowa.