Latin Impact on the Finance Industry

Finance Industry is a fantastic business model to learn from when considering ever-changing market conditions. Their traditional target markets are stable, but, the needs of an emerging market, the Latino market is extremely underserved. It is certainly not for lack of money. Many Latinos have zero debt and healthy saving habits. The question arises, are financial institutions doing enough to serve this population? Are they adapting to the Latino needs? The answer is complicated.

There are two types of Latinos in the USA. One is the immigrant seeking a better life and wanting the American dream, whether they came through the proper channels or not it is irrelevant. The second is the Latinos that are born here. These are two very different groups of people with different needs and goals. Most immigrants bring their culture, traditions, and customs with them to the US. Those born here develop a blended culture that is both Latino and American.

Financial Institutions are taking notice and making strides to accommodate this very economically influential population. The main reason is that there is a lot of investment in education and developing trust. An untold detail is that in Latino countries, people do not trust banks and financial institution because of corruption. Everything is paid in cash and there is no debtor traditional credit scores. This means that the Latino community has cash, probably stored under their mattress or in a shoe box. This is very dangerous considering that a house fire could burn an entire life-savings. Another scenario is they could become a target for robbery. This is a foreign concept for Americans. What is happening is a huge learning curve, educating them on the process of building credit, saving their money in a finance industry, getting loans (mortgage, car, etc.), and most important having trust in the financial institutions.

The younger generations that are born here learn from their parents and surroundings. There is still a disconnect between the importance of financial products, building credit, and how that process works. Many of these young people are just translating for their parents, explaining financial products, and become an intermediary for conducting business.

However, more and more financial industries are offering products specific to Latinos. Information is becoming available in Spanish and more financial institutions are hiring bilingual and multilingual speakers. It will be interesting to see how we as a country adapt to this important demographic. It is truly an untapped market that has an important function in our economy for growth and stability.

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