The Hispanic market is emerging as a growing demographic, and the financial services industry is taking notice.
The Hispanic Market Monitor, produced by Synergistics Research Corp. in Atlanta and released on March 1, 2005, examines the attitudes and financial services profile of Hispanics.
The survey found that this market offers a major opportunity for financial institutions. The survey found that a significant portion of the Hispanic population uses checking accounts (82 percent of those born in the United States and 64 percent elsewhere), home mortgages (58 percent; 22 percent) and investments (44 percent; 10 percent). But certificates of deposit (23 percent; 11 percent), individual retirement accounts (25 percent; 8 percent) and money market accounts (16 percent; 8 percent) have yet to catch on.
Hispanic purchasing power has more than tripled in the past 15 years, while U.S. buying power has gained at half that rate. It is expected to grow 89 percent to $926 billion from $491 billion between 2000 and 2007, according to the Selig Center for Economic Growth at the University of Georgia, which has projected that growth rate despite lower usage of banking services among this segment compared with the general population.
"Financial services have to target this market segment very specifically and very cautiously," said William McCracken, chief executive of Synergistics. "They can't expect to capture this market the same way they capture the general population."
The survey found that cultural characteristics and specialized needs must be addressed when working with this market segment. For example, many Hispanics use check-cashing centers and Hispanic banking institutions to fulfill their financial needs.
The data were compiled in a national telephone survey conducted in October and November 2004 with 1,000 telephone interviews with self-identified Hispanic consumers conducted in Spanish or English, based on respondent preference.