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Hispanics and the Banking Experience - US - March 2019

Covered in this report

The purpose of this report is to analyze Hispanic consumers’ attitudes, behaviors, and perceptions surrounding the restaurant decision-making process.

"As payment cards and banking apps are becoming the main ways in which Hispanics interact with their banks, the nature of customer touchpoints are shifting away from bank branches. For banks to drive longer-term loyalty, it is important they find ways to generate a desire for in-person conversations to gain insights into Hispanics’ needs and provide some guidance to help solidify relationships, as well as cross-sell products."
- Juan Ruiz, Director of Hispanic Insights

This report looks at the following opportunities:

  • Engaging the least engaged
  • Using payment cards as touch point triggers
  • Leveraging mobile apps

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Figure 1: Hispanics’ banking attitudinal segments, November 2018
        • The issues
          • Hispanics lag in financial product ownership
            • Figure 2: Hispanics’ financial product ownership, indexed to all, November 2018
          • Hispanics are satisfied clients
            • Figure 3: Hispanics’ attitudes toward banks – Satisfaction, November 2018
            • Figure 4: Hispanics’ motivations to switch banks, indexed to all, November 2018
          • The opportunities
            • Engaging the least engaged
              • Figure 5: Hispanics’ financial product ownership, by gender and age, November 2018
            • Using payment cards as touch point triggers
              • Figure 6: Banking activities Hispanics did in the past three months, indexed to all, November 2018
            • Leveraging mobile apps
              • Figure 7: Hispanics’ preferred transaction channel, indexed to all, November 2018
            • What it means
            • The Market – What You Need to Know

              • There are four segments of Hispanics that approach banking differently
                • Hispanic are satisfied, but shouldn’t be taken for granted
                  • Staff are key to strengthen the banking relationship
                    • Appearances still matter
                      • Perspectives contextualizing how Hispanics relate to banks include:
                        • Factors influencing how Hispanics relate to banks include:
                        • Banking Attitudinal Segments

                          • Four segments of Hispanics approach banking differently
                              • Figure 8: Hispanics’ banking attitudinal segments, November 2018
                            • Disenchanted Clients (19%)
                              • Figure 9: Profile of Hispanic Disenchanted Clients, November 2018
                            • Unbranched Clients (29%)
                              • Figure 10: Profile of Hispanic Unbranched Clients, November 2018
                            • Faithful Clients (18%)
                              • Figure 11: Profile of Hispanic Faithful Clients, November 2018
                            • Unassertive Clients (34%)
                              • Figure 12: Profile of Hispanic Unassertive Clients, November 2018
                          • Implications of Hispanic Banking Segments

                            • Hispanic are generally satisfied with their current bank
                                • Figure 13: Hispanics’ attitudes toward banks – Satisfaction, indexed to all, November 2018
                                • Figure 14: Hispanics’ attitudes toward banks – Satisfaction, by attitudinal segments, November 2018
                              • There are opportunities to add more substance to current interactions
                                • Figure 15: Hispanics’ attitudes toward banks – Customer service, indexed to all, November 2018
                                • Figure 16: Hispanics’ attitudes toward banks – Customer service, by attitudinal segments, November 2018
                              • Appearances are important to give Hispanics peace of mind
                                • Figure 17: Capital One Café - A New Way to Bank video, October 2017
                                • Figure 18: Hispanics’ attitudes toward banks – Engagement, indexed to all, November 2018
                                • Figure 19: Hispanics’ attitudes toward banks – Engagement, by attitudinal segments, November 2018
                            • Market Perspective

                              • Hispanics are less confident about their finances
                                • Figure 20: Hispanics’ financial confidence, indexed to all, July 2017-August 2018
                              • Debt is not out of the question for Spanish-dominant Hispanics
                                • Figure 21: Hispanics’ attitude toward debt – Hispanics versus all US consumers, by language spoken at home and age, July 2017-August 2018
                              • Hispanics are online, opening the door to digital banking
                                • Figure 22: Internet usage – Hispanics versus all US consumers, by language spoken at home and age, July 2017-August 2018
                            • Market Factors

                              • Hispanic median household income is about $50K
                                • Figure 23: Median household income, by race and Hispanic origin of householder, 2017
                                • Figure 24: Household income distribution, by race and Hispanic origin of householder, 2017
                                • Figure 25: Median household income, by race/Hispanic origin of householder, in inflation-adjusted dollars, 2007-17
                              • Hispanics’ net worth significantly below national median
                                • Figure 26: Median household net worth, by race/Hispanic origin of respondent, 2016
                              • Government is eliminating existing regulations to protect consumers
                                • Dodd-Frank and mortgages
                                  • Payday loans
                                    • Consolidation of branches
                                      • Figure 27: Structural changes in banking industry – Net loss of number of offices, February 2014 –February 2019
                                  • Key Players – What You Need to Know

                                    • Hispanics gravitate toward large national banks
                                      • Initiatives that can resonate with Hispanics include:
                                        • Unbanked and underbanked Hispanics remain a challenge
                                          • Credit unions are not resonating with Hispanics
                                            • Looking ahead…
                                            • What’s Happening?

                                              • Banks’ size matters to Hispanics
                                                • Figure 28: Banks Hispanics used in the past 12 months, indexed to all, July 2017-August 2018
                                                • Figure 29: Top five banks based on deposits in top 10 Hispanic MSAs*, June 2018
                                              • Conversations at branches can lead to cross-selling opportunities
                                                • Figure 30: Bank of America, Time to Schedule Your One-on-One Financial Review email, September 2016 – November 2018
                                              • Digital presence gives more control
                                                • Banking apps are secure
                                                  • Figure 31: Citibank Quick Lock mobile advertisement and landing page, January 2019
                                                • More power to the phone
                                                  • Figure 32: Wells Fargo’s statement mailing insert, January 2019
                                                • Rewarding for referral programs
                                                  • Figure 33: Chase referral program, loyalty email, January 2019
                                                • Embracing different life stages
                                                  • Figure 34: Bank of America’s Family Is Everything email, January 2019
                                                  • Figure 35: Citibank’s Life and Money mobile advertisement, January 2019
                                              • What’s Struggling?

                                                • Hispanics continue to overindex for being unbanked and underbanked
                                                  • Figure 36: Unbanked rates, by race and Hispanic origin of householder, 2013-19
                                                • Credit unions
                                                • What’s Next?

                                                  • Digital and human assistants to team up
                                                    • Balance tangibility and visibility
                                                    • The Consumer – What You Need to Know

                                                      • Some Hispanic groups need more attention
                                                        • National banks can leverage their strong physical and digital presence
                                                          • Plastic card use forms the perception of banking experiences
                                                            • Banking apps provide the convenience Hispanics want
                                                              • Hispanics balance convenience with trust
                                                                • Satisfied Hispanics shouldn’t be taken for granted
                                                                • Financial Product Ownership

                                                                  • Hispanics underindex for ownership of most financial products
                                                                    • Figure 37: Hispanics’ financial product ownership, indexed to all, November 2018
                                                                  • Financial sophistication depends on level of affluence
                                                                    • Figure 38: Hispanics’ financial product ownership, by language spoken at home and household income, November 2018
                                                                  • Younger Hispanics could use some guidance
                                                                    • The challenge of engaging Hispanic women
                                                                      • Figure 39: Hispanics’ financial product ownership, by language spoken at home and household income, November 2018
                                                                  • Types of Financial Institutions Hispanics Use

                                                                    • National banks have the infrastructure to make Hispanics feel comfortable
                                                                      • A note about online-only banks
                                                                        • Figure 40: Types of financial institutions Hispanics used in the past year, indexed to all, November 2018
                                                                      • Hispanic women less likely to interact with banks
                                                                        • Figure 41: Types of financial institutions Hispanics used in the past year, by gender and age, November 2018
                                                                      • The less-affluent opportunity
                                                                        • Figure 42: Types of financial institutions Hispanics used in the past year, by language spoken at home and household income, November 2018
                                                                    • Banking Activities

                                                                      • Most banking activities take place outside the branch
                                                                        • Figure 43: Banking activities Hispanics did in the past three months, indexed to all, November 2018
                                                                        • Figure 44: Hispanics’ use of mobile banking app vs bank branch visitation, by age, November 2018
                                                                      • Hispanics in different segments prioritize different banking activities
                                                                          • Figure 45: Banking activities Hispanics did in the past three months, by attitudinal segments, November 2018
                                                                      • Banking Preferences

                                                                        • Hispanics want convenience
                                                                            • Figure 46: Hispanics’ preferred transaction channel, indexed to all, November 2018
                                                                            • Figure 47: Hispanics’ preferred transaction channel, by attitudinal segments, November 2018
                                                                          • The ability to visit a branch is a given; promoting an app can get attention
                                                                            • Figure 48: TURF Analysis – Preferred transaction channel, November 2018
                                                                            • Figure 49: Table - TURF Analysis – Bank interaction, November 2018
                                                                        • Banking Features Associations

                                                                          • Hispanics don’t find everything they need in one place
                                                                            • Figure 50: Hispanics’ banking features associations, November 2018
                                                                          • Hispanics see banking mobile apps features more positively
                                                                            • Figure 51: Hispanics’ associations of bank mobile apps and teller visits at branches, indexed to all, November 2018
                                                                        • Bank Switching Triggers

                                                                          • Increased fees, poor customer service are main reasons for Hispanics to look elsewhere
                                                                            • Hispanics overindex for reacting to second tier issues
                                                                              • Figure 52: Hispanics’ motivations to switch banks, indexed to all, November 2018
                                                                            • Younger Hispanics are more forgiving
                                                                              • Figure 53: Hispanics’ motivations to switch banks, by gender and age, November 2018
                                                                            • Higher fees more likely to prompt action among more-acculturated Hispanics
                                                                              • Figure 54: Hispanics’ motivations to switch banks – Increase in fees, by language spoken at home and household income, November 2018
                                                                          • Appendix – Data Sources and Abbreviations

                                                                            • Data sources
                                                                              • Consumer survey data
                                                                                • Direct marketing creative
                                                                                  • Abbreviations and terms
                                                                                    • Abbreviations
                                                                                      • Terms
                                                                                        • TURF Methodology
                                                                                          • A note about acculturation
                                                                                          • Appendix – Demographics

                                                                                            • The youth of the market keeps health and wellness abstract
                                                                                              • Figure 55: Hispanic share of total US population, by age, 2018
                                                                                          • Appendix – The Consumer

                                                                                              • Figure 56: Hispanics’ financial confidence – Agreement of being good with money, by age and household income, indexed to all, July 2017-August 2018
                                                                                              • Figure 57: Hispanics’ financial confidence – Not feeling financially secure, by age and household income, indexed to all, July 2017-August 2018

                                                                                          Hispanics and the Banking Experience - US - March 2019

                                                                                          US $4,395.00 (Excl.Tax)