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

Trends: Income Growth

Trends: Services
Financial service usage changes with time in US:

Evolution in the Marketplace

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.

Importance of Marketing

Appleseed Resources
Market Information
Consumer Focus Groups
Best Practices
Financial Education
Visit: www.appleseednetwork.org and
www.texasappleseed.net

Conclusion
“As we try to break some of these consumer behavior patterns… We have to be cheaper and we have to engender a greater degree of trust in us.”

Contact Information
Annette LoVoi
Appleseed
Tel: 512.542.9082
Austin, TX USA
alovoi@appleseednetwork.org