Many businesses are not sufficiently capitalizing on the Hispanic market, in part because of failed or ineffective outreach initiatives. For these efforts to be successful, organizations require a strategy that takes into account deep understanding of Hispanic family dynamics, cultural nuances, and language barriers. Financial institutions would draw a competitive advantage by developing cultural competencies that directly relate to the particularities of the Hispanic community. With this article, I will help you grow cultural awareness and also understand some actions that can be taken to better connect with this segment.

1. 22 The Texas Independent Banker March/April 2017
F E AT U R E : B E S T P R AC T I C E S : H I S PA N I C B A N K I N G
MANY BUSINESSES IN the United States are not sufficiently capitalizing on the Hispanic market, in part due to
failed or ineffective outreach initiatives. For these efforts to be successful, organizations require a strategy that
takes into account deep understanding of Hispanic family dynamics, cultural nuances, and language barriers.
Financial institutions would draw a competitive advantage by developing cultural competencies that directly
relate to the particularities of the Hispanic community. With this article, I will help you grow cultural awareness
and also understand some actions that can be taken to better connect with this segment.
The Hispanic
Opportunity
MARIO KAUACHI
Throughout its history, the face of
America has constantly changed. Large
influxes of immigrants and their American-
born descendants have contributed to the
vast diversity that we now all enjoy. Today,
one of the most prominent faces in American
society displays a Hispanic descent, now
comprising 17 percent of the total U.S. pop-
ulation1
and more than 39 percent of the
population of Texas2
. Latinos in the Lone
Star State will outnumber non-Hispanic
Whites by 2020, and make up 50 percent
of the state by 20423
. If companies in Texas
have failed to reach Latino consumers in the
past, then they are missing out on a huge
and exciting opportunity.
Latinos in Texas have many charac-
teristics that make them attractive to all
businesses. According to the Pew Research
Center, the Latino population has a young
median age of 28, and nearly half of U.S.-
born Latinos are younger than 18. These
U.S. citizens will soon join the workforce
(if they haven’t already), earn a salary, and
aspire for credit. They will choose a bank
to patronize, open checking and savings
accounts, pursue lines of credit, apply for
mortgages, plan for retirement, and could
make use of a broad basket of financial ser-
vices through their local banking institu-
tions. For example, the Pew Research Center
has identified that 55 percent of Latinos in
Texas own their home and furthermore,
75 percent of the Latino population believe
that owning a home is “the best long-term
investment”—this is an evident opportunity
for the primary mortgage market. Latinos
want to make good financial decisions, and
of course they will need banks to live out
their dreams. Yet, almost 50 percent of
Hispanic households in Texas are unbanked
or underbanked4
. So why is that?
For many Latinos, fully embracing the
American way of life has its challenges, and
approaching a financial institution is one
of them. Let’s imagine the story of Jose,
a 25-year-old farm worker in west Texas.
He finishes work on payday, visits a check-
cashing store, and saves 20 dollars in his
pillowcase when he gets home—yes, a pil-
lowcase. Why is he choosing not to use the
services of a financial institution? Maybe
he is uneducated about American bank-
ing; maybe he mistrusts banks because his
parents came from a country where the
Integrating
Latinos into the
U.S. Banking and
Financial Systems
Hispanic Population Projection
for Texas
2010
2050

2. March/April 2017 www.ibat.org 23
financial system was not reliable; maybe he
is intimidated thinking that banks are for
rich people; or he is nervous about shar-
ing his personal information because of a
family member’s immigration status. And
of course, let’s not forget the language bar-
rier, both in communicating with staff and
understanding financial jargon. With these
burdens, it is no surprise that this worker—
and many like him—has not entered the
U.S. financial system. So what can be done?
Like every institution that serves a
diverse community, banks could benefit
from developing cultural competency.
When I speak to any organization, the first
question I ask is “Does your store-front say
‘Bienvenidos?’” While this is literally a good
first step, it needs to be part of a greater
philosophy adopted by the leadership of
the company and by every member of the
team. What I mean by this is that banks
should be ready to meet the needs of their
entire community, and not settle for just a
subset of it.
An important insight to keep in mind
is that Latinos come from a collectivistic
culture where group activities are domi-
nant, and familia is the top priority. We all
agree that family is most important, but
the concept is broader from a Hispanic
point-of-view. Familias include extended
family, and sometimes even neighbors and
friends. Individuals in the Hispanic com-
munity tend to stick together and support
each other unconditionally. Importantly,
personal experiences influence decision-
making for others in their tight-knit group.
Ensuring everyone in your organization has
a clear understanding of this concept is key.
It should influence advertising messaging,
interpersonal engagement, and outreach
strategies. Companies that master the
essence of this cultural nuance will not only
gain individual customers, but potentially
the whole familia.
To connect effectively with Hispanic
communities, here are some important
actions to consider:
• Bridge the language barrier. Although
many Latinos are bilingual, their English
proficiency may be limited—especially
when discussing financial terms. This
does not necessarily mean that every-
body needs to go out and learn Español,
but there should be employees in your
branches who not only speak Spanish
but also understand cultural nuances.
In fact, you may already have a resource
person amongst your team who could
rise to the occasion and take on the
task of serving as your on-site Latino
ambassador.
• Develop relevant advertising. Messages
need to focus on what is culturally mean-
ingful rather than only on the financial.
For example, messaging should not only
be about how many branches there are
or the variety of services offered, but
about what the institution can do for a
Latino’s familia, such as how planned
investments can ensure education for
their children and retirement for their
elders. A display of tailored and cultur-
ally relevant advertising material inside
the bank could be an effective tool of
education as well.
• Train for effective cultural engage-
ment. This endeavor may be the most
relevant transformation that financial
institutions would embark upon. When
staff members achieve a personal con-
nection with Latinos, banks will gain
trust and grow long-lasting relationships
with new customers. Advisors will also
be able to educate Latinos about the
U.S. financial system and how it can help
them to achieve the American dream.
I hope this article gives you a better pic-
ture of why focusing on the fast-growing
Latino population is critical. Hispanics in
the United States are hard-working people,
with strong values, and big aspirations.
Financial institutions should proactively
take steps to connect with their Latino com-
munities and educate them about the U.S.
financial system’s important benefits—and
it starts with you.
Thank you for taking the time to read
my article. I look forward to hearing your
thoughts and opinions, so let’s connect.
Please visit my website at www.thehispanic-
wayconsulting.com, or on LinkedIn at www.
linkedin.com/in/mariokauachi. You can also
contact me directly at 512-900-6087.
Muchas gracias. ■
As Principal Consultant for The Hispanic Way,
Mario Kauachi supports organizations with
the development of cultural competency, in
order for them to grow cultural awareness
and make informed decisions regarding their
interactions with Latinos in the United States
and abroad.
Sources:
1. United States Census Bureau, 2014 Population
Estimates, http://factfinder.census.gov/bkmk/
table/1.0/en/PEP/2014/PEPASR6H?slice=hisp~hisp!y
ear~est72014
2. Pew Research Center, Demographic profile of
Hispanics in Texas 2014, http://www.pewhispanic.
org/states/state/tx/
3. Texas Demographic Center, Texas Population
Projections 2010 to 2050, http://demographics.
texas.gov/Resources/Publications/2014/2014-11_
ProjectionBrief.pdf
4. Federal Deposit Insurance Corporation, 2015 FDIC
National Survey of Unbanked and Underbanked
Households, https://www.economicinclusion.
gov/surveys/2015household/documents/tabular-
results/2015_banking_status_Texas.pdf