Chicago, IL, November 15, 2004 — According to a new report from Mintel on the Retail Banking industry, only half of the US Hispanic population are bank customers. This presents banking institutions with a relatively untapped market in comparison to other demographic groups. With nearly one in five Americans not customers of a bank, Mintel predicts that banks will begin offering variations of their existing products to attract new markets, with the most obvious target market being Hispanics. In sharp contrast to the population as a whole, only one-half of Hispanics have a relationship with a bank. Additionally, their level of ownership for other retail banking products such as mortgages and loans is considerably lower than average. While four in ten consumers have a mortgage, only 27% of Hispanics do. Also, nearly two-thirds of all customers have some type of loan, yet less than half of Hispanics do. This signals an enormous opportunity for retail banks to capture Hispanic business. In addition, Hispanics who are bank customers are some of the most dissatisfied with customer service at their banks, making them ready targets for relationship banking in Spanish. In many industries, including retail banking, Hispanics have proven to be a highly brand loyal group in comparison to other ethnicities, proving that any effort by banks to win their business will most likely be rewarded by retaining these customers more easily in comparison to other ethnic groups. Programs such as Citigroup’s Banamex show that creative marketing and services will appeal to and increase the Hispanic customer base for their institution. Banamex USA credit card customers in the US can share lines of credit and other benefits with family or friends in Mexico. In addition, Bank of America and US Bank have reached out to this demographic with Hispanic targeted programs. The retail banking market size is valued at $14.2 trillion as of March 2004. Overall, total market size has grown almost $4.2 trillion from 1999 to Q1 2004, characterized by growth in both bank assets and liabilities. From 2001 through 2003, the retail banking market grew faster than a combination of personal income growth and inflation. This is due to the shift in risk tolerance away from equities into lower risk products like savings accounts, low inflation and low interest rates, the latter fueling the mortgage boom. You might also be interested in: No related posts.