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Hispanics Represent CUs’ Largest Growth Opportunity

By 2050, one in three U.S. residents will be of Hispanic descent.

September 27, 2013
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Miriam De Dios

Hispanic consumers need credit unions just as much as credit unions need Hispanic consumers, says Coopera CEO Miriam De Dios, addressing the CUNA Operations, Sales, and Service Council Conference in Hollywood, Calif.

“Hispanics are the largest, fastest-growing, youngest, and most underserved ethnic group in the U.S.,” she says.

Currently, one of six U.S. residents is Hispanic, De Dios says. “But by 2050, one out of three U.S. residents will be Hispanic. About 50% of Hispanics are either unbanked or underbanked. And their average age is 27. Hispanics are clearly credit unions’ largest growth opportunity.”

Many credit unions are seizing that opportunity. Over an 18-month period, a group of Coopera clients experienced 25% Hispanic membership growth, 47% growth in Hispanic checking penetration, and 7% growth in Hispanic lending penetration.

De Dios encourages credit unions to focus on both first- and second-generation Hispanics.

“That’s important because the first generation is in the workplace and earning income, and is more likely to be unbanked or underbanked,” she says. “The second generation, however, learns its financial behaviors from the first generation, and the second generation still needs to connect to the culture.”

It’s important to distinguish between “acculturation” and “assimilation,” De Dios says. Acculturation refers to the preservation of one’s birth culture and the addition of another culture, becoming “bicultural.” Assimilation refers to the replacement of one’s birth culture with another.

“Hispanics are creating a new model in which they are more likely to create a bicultural and bilingual identity,” she says.

It depends on the definition of growth

Serge Milman | Optirate
October 01, 2013 12:12 pm
Are Hispanics the largest growth opportunity for Credit Unions? Well, it depends on what Credit Unions wish to grow... If the goal is to grow number of members and number of accounts, then Yes, Hispanics are probably a good segment, though not much different from any other segment If the goal is to grow Revenue and Operating Income, then Hispanics (as a group) are most likely a terrible member segment for the vast majority of Credit Unions.


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