Financial priorities of America’s minorities

America’s minority groups are getting bigger. According to the U.S. Census Bureau, Hispanics, the largest minority group in the country, are growing at a faster rate than non-Hispanics and are on track to make up nearly 20% of the population by 2021. The only other racial group with a higher rate of expected growth is Asian Americans, expected to increase over 13% in the next five years. This increasingly diverse culture will have long-term implications for the financial services industry and marketers need to be aware of the concerns and priorities of these consumers in order to stay relevant.

Hispanic Americans’ biggest impact over the next decade will be driven by younger consumers entering the labor force. The Bureau of Labor Statistics projects that 30.5 million entrants into the labor force will be of Hispanic origin, nearly three times the number of entrants reported in 1990. This means that their financial focus will be navigating new careers, wealth management, taking care of their families and planning for retirement. According to Mintel’s Hispanics and Money Management US 2016 report, Hispanics are reluctant to own certain payment products, especially credit cards and prepaid cards, indicating an opportunity to increase awareness of these products and improve overall education around their benefits and uses.

Hispanics also have over-indexed on use of large, national banks such as Bank of America, Chase and Wells Fargo, as compared to the rest of the population. This is driven in large part by the availability of branch locations, which is the top stated reason Hispanics choose one bank over another. In light of this, smaller banks, digital-only banks and credit unions will be challenged to compete for business from the Hispanic market, but financial brands could benefit from an increased focus on value, convenience and a trusted reputation.

Hispanics are more likely than all other consumers to use mobile apps daily
Digital features and services will also resonate with Hispanics as they are very digitally connected. According to Mintel’s Mobile Apps US 2016 report, Hispanics are more likely than all other consumers to use mobile apps daily. What’s more, 87% of Hispanics personally own a smartphone as compared to just three quarters of Americans overall, according to Mintel’s Digital Trends – Hispanics US 2015 report. Wells Fargo tapped into the young and digitally connected Hispanic consumer with its bilingual commercial showing a young man on his way to a job interview and stopping along the way to conduct a variety of quick financial transactions on his smartphone.

Asian Americans, on the other hand, have been found to be slightly more financially engaged and confident than the rest of the population. Their biggest financial priority is taking care of family as one in five Asian Americans say they provide financial assistance to relatives, and one in three act as a caregiver to someone other than their children, according to a Prudential study. Asian Americans are also expecting to retire 15.5 months sooner than the general population and are more likely to own individual stocks.

This focus on family translates into an increased demand for products and services that help consumers save for their children’s higher education costs. While many consumers are still unfamiliar with the benefits of a tax-advantaged college savings account such as a 529, fintech company CollegeBacker makes it easy to open an account, calculate a savings goal, and invite friends and family to contribute to it.

At the end of the day, it is important for financial marketers to understand the changing dynamics of the country’s demographic profile. As consumer priorities and financial concerns begin to shift, brands will need to adjust their offerings and value proposition in order to not only meet their current needs, but also build trust and loyalty for a long-term relationship.

Lily Harder is the Vice President of Research for Mintel Comperemedia. Lily specializes in the financial services industry, researching and presenting on the latest industry trends, competitive intelligence insights and newsworthy developments.