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Hispanic Consumers and Financial Services - US - July 2013

“Engaging with underbanked Hispanics is not a one-off process. Hispanics who do begin using banking products need to be convinced of their ongoing value in order to stay engaged. In addition, Hispanics who do use some banking products can always be educated about other products that they might not be utilizing to their maximum benefit. Marketers can target specific Hispanic goals to tap into Hispanic optimism that is both engrained in the culture but also growing with the economic recovery.”

– Susan Menke, Category Manager, Multicultural

Some questions answered in this report include:

  • How can institutions engage with an underserved Hispanic market?
  • What about increasing Hispanic use of more sophisticated, beneficial products?
  • How can marketers make the most of Hispanic optimism?

 

Hispanics are a large and fast-growing populationwho are largely underserved by banks and financial institutions. Because the Hispanic population is a diverse group with a varied set of attitudes toward money, there is a great opportunity for marketers who can provide Hispanics with financial products and services that are relevant to their specific needs.

 

Readers of this report will learn:
  • Important demographics of the Hispanic consumer, including how varying levels of acculturation and income affect usage of financial products
  • A current account of the financial position of Hispanic consumers, including financial products currently used and attitudes regarding their economic outlook
  • Insights into the significance of the underbanked Hispanic community: who they are, why they avoid banks, and how financial institutions can reach them and grow their business
  • Hispanic consumers’ financial goals and how financial institutions can make their products relevant
  • Where Hispanic consumers get their financial information and how financial institutions can best target their messaging.

 

The categories covered in the report include Hispanic demographics, acculturation, and Hispanic’s attitudes toward money and purchasing. In discussing the various banking and investment choices, we also address which segment of the Hispanic population is the primary target for these different products and services. To do so, we’ll look at consumption habits by language (Spanish, English, and bilingual) to provide insights for targeting those segments of the Hispanic population. We will also discuss and provide examples of financial services trends and opportunities.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Consumer survey data
            • Advertising creative
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                      • Nearly one-third of Hispanic consumers are underbanked
                        • Figure 1: Percentage of population that is unbanked/underbanked consumers, by race/Hispanic origin, 2011
                        • Figure 2: Level of optimism about household financial situation, by race/Hispanic origin, 2007-2012
                      • More than 70% of Hispanics are without a retirement plan
                        • Figure 3: Incidence of retirement savings plan ownership, Hispanics by income, March 2013
                      • Hispanics approaching retirement lack funds
                        • Figure 4: Reasons for not having a retirement plan, Hispanics without a retirement plan by age, March 2013
                      • Buying home, paying debt, and saving are top goals
                        • Figure 5: Financial goals over the next two to three years, Hispanics overall, March 2013
                      • Hispanics seek financial information from friends/family
                        • Figure 6: Sources used for financial information, Hispanics overall, March 2013
                      • What we think
                      • Issues and Insights

                          • How can institutions engage with an underserved Hispanic market?
                            • Insight: prepaid debit cards are attracting new relationships
                              • What about increasing Hispanic use of more sophisticated, beneficial products?
                                • Insight: Education on product benefits is in order
                                  • How can marketers make the most of Hispanic optimism?
                                    • Insight: Focus on specific goals and how products can help attain them
                                    • Trend Applications

                                        • Trend: Return to the Experts
                                          • Trend: Prepare for the Worst
                                            • Mintel Futures: Access Anything, Anywhere
                                            • Competitive Context

                                              • Key points
                                                • Opportunity to increase debit card use among less-acculturated Hispanics
                                                  • American Express popular way to send money for young Hispanics
                                                      • Figure 7: Remittance services used in last 12 months, by age, October 2011-November 2012
                                                  • Overview of the Hispanic Consumer

                                                    • Key points
                                                      • Hispanic purchasing power projected to reach nearly $1.7 trillion
                                                          • Figure 8: Purchasing power, by race/Hispanic origin, 1990-2017
                                                        • Hispanic household income lags Whites and Asians
                                                          • Figure 9: Median household income, by race/Hispanic origin of householder, 2011
                                                        • Hispanic male median personal income improved in 2011
                                                          • Figure 10: Median personal incomes of people aged 15 or older, by Hispanic origin and gender, in inflation-adjusted dollars, 2001-11
                                                        • Hispanic unemployment rates declining
                                                          • Figure 11: Percent unemployment at end of third quarter, by race/Hispanic origin, 2007-12
                                                        • Hispanics among the fastest-growing population segments in the U.S.
                                                          • Hispanics are overwhelmingly young
                                                            • Figure 12: Generation profile, Hispanics versus non-Hispanics, 2011
                                                          • Hispanic households larger than non-Hispanic households
                                                            • Figure 13: Average household size, by Hispanic origin/race of householder, 2001, 2008 and 2011
                                                            • Figure 14: Households, by number of people in the household—Hispanics versus all, 2011
                                                          • Hispanic households have younger children
                                                            • Figure 15: Households with children, by race and Hispanic origin of householder, 2012
                                                            • Figure 16: Households, by race of householder and presence and ages of children, 2011
                                                          • Hispanic educational attainment generally high school or lower
                                                            • Figure 17: Educational attainment of Hispanic men, by age, 2011
                                                            • Figure 18: Educational attainment of Hispanic women, by age, 2011
                                                          • Hispanics overwhelmingly reside in Southern and Western America
                                                            • Figure 19: Largest* Hispanic groups, by region, by country of origin/ancestry, 2010
                                                          • Immigration is declining—but immigration reform may present an opportunity
                                                              • Figure 20: Estimates of the U.S. unauthorized immigrant population, 2000-11
                                                          • Financial Lives of Hispanics

                                                            • Key points
                                                              • Nearly one-third of Hispanic consumers are underbanked
                                                                  • Figure 21: Percentage of unbanked and underbanked consumers, by race/Hispanic origin, 2011
                                                                • Remittances to Latin America represent $61 billion market
                                                                  • Figure 22: Remittances to Latin America and the Caribbean, 2001-12
                                                                • Hispanics optimistic about their financial future
                                                                  • Figure 23: Economic outlook for next 12 months, by race/Hispanic origin, October 2011-November 2012
                                                                • Young Hispanics say their situation has improved the most
                                                                  • Figure 24: Economic situation over last 12 months, October 2011-November 2012
                                                                • Hispanic households have less-established credit
                                                                    • Figure 25: Risk scores - Vantagescore groups, by Hispanic origin, October 2011-November 2012
                                                                • Financial Product Ownership

                                                                  • Key points
                                                                    • More than half of Hispanics own debit cards
                                                                      • Figure 26: Incidence of debit card ownership, by race/Hispanic origin, October 2011-November 2012
                                                                      • Figure 27: Incidence of debit card ownership, by Hispanic origin and languages spoken in home, October 2011-November 2012
                                                                    • Hispanics are more frequent debit card users
                                                                      • Figure 28: Debit cards—frequency of usage in last 30 days, by race/Hispanic origin, October 2011-November 2012
                                                                    • Hispanics less likely to have any type of loan
                                                                      • Figure 29: Incidence of loan ownership by type, by race/Hispanic origin, October 2011-November 2012
                                                                    • Three-quarters of Hispanics do not have investments
                                                                      • Figure 30: Ownership of Investments, by race/Hispanic origin, October 2011-November 2012
                                                                    • With increased acculturation, more ownership of common investments
                                                                      • Figure 31: Ownership of investments, by Hispanic origin and languages spoken in home, October 2011-November 2012
                                                                    • Value of Hispanic investment accounts approximately $40K
                                                                      • Figure 32: Total amount in investment accounts for those who own investments, by race/Hispanic origin, October 2011-November 2012
                                                                  • Financial Product Usage

                                                                    • Key points
                                                                      • Nearly four out of five Hispanics use debit cards
                                                                        • Figure 33: Financial products used in past 12 months, Hispanics by gender, March 2013
                                                                      • Young Hispanics more likely to be underbanked
                                                                        • Figure 34: Financial products used in past 12 months, Hispanics by age, March 2013
                                                                      • With more household income, more financial product use
                                                                          • Figure 35: Financial products used in past 12 months, Hispanics by household income, March 2013
                                                                        • Less-acculturated Hispanics underbanked
                                                                          • Figure 36: Financial products used in past 12 months, Hispanics by language spoken in the home, March 2013
                                                                        • Hispanics using savings account to reach goals
                                                                          • Figure 37: Financial products used in past 12 months, Hispanics by financial goals over the next 2-3 years, March 2013
                                                                      • Retirement Savings Accounts

                                                                        • Key points
                                                                          • Seven in 10 Hispanics without a retirement plan
                                                                            • Figure 38: Incidence of retirement plan ownership, Hispanics by gender, March 2013
                                                                          • Retirement plan more likely with increased household income
                                                                            • Figure 39: Incidence of retirement plan ownership, Hispanics by household income, March 2013
                                                                          • Half of 45-54 year old Hispanic respondents don’t have enough money for retirement
                                                                            • Figure 40: Reasons for not having a retirement savings plan, Hispanics by age, March 2013
                                                                          • Hispanics have conflicting goals
                                                                            • Figure 41: Reasons for not having a retirement savings plan, Hispanics by financial goals over the next two to three years, March 2013
                                                                          • Retirement account holders most likely to look to bank or employer for information
                                                                            • Figure 42: Sources of financial information for those who have retirement savings accounts, Hispanics, March 2013
                                                                          • Half of Hispanics who get financial information from TV in Spanish haven’t thought about retirement
                                                                            • Figure 43: Sources of financial information for those who do not have retirement savings accounts, Hispanics, March 2013
                                                                        • Remittance Behavior

                                                                          • Key points
                                                                            • Remittance behavior remains the same for many
                                                                              • Figure 44: Increase/decrease in amount sent to Latin America, Hispanics who have sent money in last 12 months, March 2013
                                                                            • Older Hispanics more likely to send money
                                                                              • Figure 45: Increase/decrease in amount sent to Latin America, Hispanics who have sent money in last 12 months, by age, March 2013
                                                                            • Less-affluent Hispanics in fact sending more
                                                                              • Figure 46: Increase/decrease in amount sent to Latin America, Hispanics who have sent money in last 12 months, by household income, March 2013
                                                                            • Banks facing competition from new technologies
                                                                              • Figure 47: Remittances services used, Hispanics overall March 2013
                                                                          • Short-term Financial Goals

                                                                            • Key points
                                                                              • Buying home, paying debt, saving top goals
                                                                                • Figure 48: Financial goals over the next two to three years, Hispanics by gender, March 2013
                                                                              • Financial goals are largely determined by age
                                                                                  • Figure 49: Financial goals over the next two to three years, Hispanics by age, March 2013
                                                                                • More acculturated Hispanics want to save for college
                                                                                  • Figure 50: Financial goals over the next two to three years, Hispanics by language spoken in the home, March 2013
                                                                              • Sources of Financial Information

                                                                                • Key points
                                                                                  • Hispanics look to friends/family for information and advice
                                                                                    • Figure 51: Preferred sources of financial information, Hispanics overall, March 2013
                                                                                  • Young consumers value friends/family over internet
                                                                                    • Figure 52: Preferred sources of financial information, Hispanics by age, March 2013
                                                                                  • Increased income prompts more diverse search for information
                                                                                    • Figure 53: Preferred sources of financial information, Hispanics by household income, March 2013
                                                                                  • Spanish-language media relevant for less-acculturated Hispanics
                                                                                    • Figure 54: Preferred sources of financial information, Hispanics by language spoken in the home, March 2013
                                                                                • Marketing Strategies

                                                                                  • Key points
                                                                                    • Bank of America emphasizes retail branches
                                                                                      • Figure 55: Banking institutions used in last 12 months, by race/Hispanic origin, October 2011-November 2012
                                                                                      • Figure 56: Bank of America “The Boys” television ad, 2013
                                                                                    • MasterCard partners with Univision to gain maximum exposure
                                                                                      • TD Bank markets human element to banking and service
                                                                                        • Figure 57: TD Bank “America’s most convenient bank” television ad, 2012
                                                                                      • Wells Fargo emphasizes Spanish-speaking representatives
                                                                                        • Figure 58: Wells Fargo television ad, 2013
                                                                                      • Chase markets Blue Liquid prepaid debit card to Hispanic audiences
                                                                                        • Figure 59: Chase Bank “Blue Liquid” television ad, 2013
                                                                                    • Appendix – Other Useful Consumer Tables

                                                                                        • Figure 60: Incidence of retirement plan ownership, by age, March 2013
                                                                                        • Figure 61: Incidence of retirement plan ownership, by language spoken in the home, March 2013
                                                                                        • Figure 62: Reasons for not having a retirement plan, by gender, March 2013
                                                                                        • Figure 63: Reasons for not having a retirement plan, by language spoken in the home, March 2013
                                                                                        • Figure 64: Financial goals for next two to three years, by household income, March 2013
                                                                                        • Figure 65: Frequency of usage of sources of financial information, March 2013
                                                                                    • Appendix – Trade Associations

                                                                                      Companies Covered

                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                      Hispanic Consumers and Financial Services - US - July 2013

                                                                                      £3,277.28 (Excl.Tax)