Innovative Banking Products for Underserved Markets
Identify Community and Market Characteristics Know your community Countries of origin, major employers, schools, neighborhoods, trusted organizations. Know your competition Offer alternatives that improve on existing products and address unmet needs Give people a reason to come to you and trust you.
Demographics Survey of 328 Mexican Immigrants, Mexican Consulate Chicago 2008 Young community: 57% 18-34 34% 35-54 Low-to moderate annual household income: 35% $0-$15,000 34% $15,001-30,000 19% $30,001-$50,000 7% Over $50,000 High Savings Rate even in lower income ranges: Average annual remittances: $2,500
Barriers For those choosing not to use accounts, major barriers: ID and min. balance. Perception that accounts carry high fees. Need for immediate access to funds. Convenience. Consistent Service, including language capacity. Non-traditional credit profiles.
Opportunities Asset protection: health insurance, auto insurance, life insurance. Access to credit: home purchase and small business. Saving for Education Cross-border needs Local community needs: domestic money transfers, loans for citizenship and immigration status.
Case Study: Family Unification Loan Loan for immigration services program pilot in Austin, Texas. Initial launch led to no borrowers. Broadened outreach, engaged more partners, used the media. Result: All initial capital investment, $30,000, loaned out in a four-month period. Now demand for additional capital and interest in expansion to other geographies.
Effective Market Strategies Better value is important, but not enough. Workforce and atmosphere should reflect the community. Meet people where they are—location and services. School-based outreach—reaching parents through their children. Leverage employer relationships. Integrate education into financial settings, such as account opening or taking out a loan.