When I arrived at my hotel on one of those long road trips, I took advantage of the free USA Today available at check-in. While not an avid reader per se, I did notice the article on the front of the money section called “Many shun bank accounts, but pay more for financial services”.
A chart in the article sourced from the FDIC shows how minority households are much more likely than white households to be unbanked or underbanked. In particular, Hispanics were the second highest percentage unbanked at 21.7%, and they were the third highest percentage of the underbanked, at 24%. The abundance of check cashing/money transfer offices in San Francisco’s heavily Hispanic Mission District also supports the conclusion that the banking industry has been unsuccessful in reaching these markets.
Some of the reasons cited in the article include 1. Convenience, 2. Instant Cash, 3. Distrust. It is amazing how a small check cashing establishment is able to cash a check instantly using a driver’s license, while a bank sometimes holds the funds for days. Distrust, as well as TV commercials for payday loans, suggests that people are much more accepting of fees that are simple and clearly disclosed versus the hidden fees and charges for which banks are famous.
Working in the multicultural advertising industry, I see that very few banks are set up with multilingual websites and are not reaching out enough to the multicultural- and specifically Hispanic- markets through their marketing. In the recently released Hispanic Fact Pack by Ad Age, which listed the Top Advertisers in Hispanic Media based on U.S. media spending, there is not a single bank in the top 50. In most cases, the websites are very rarely in Spanish or other languages.
While banks have had some serious challenges in the past couple of years, there is a tremendous opportunity to reach out to the multicultural communities. The resources are there, and with some minor focus, there is significant return.
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