There is a business opportunity that banks and credit unions have been missing. What they’ve needed is the products, marketing, and right information to tap into it.
According to the 2014 Las Vegas Perspective, 30.9 percent of local households were Hispanic, with an average income of $56,952 and an average age of 38.5.
Also, 45 percent of Hispanics locally own their own homes and 67 percent work full time, the report found.
Since Hispanics are the fastest-growing consumer market in Las Vegas and nationwide, they’ve become an attractive market for banks.
It’s also a huge chunk of business that many banks are missing out on because many Hispanic households were “unbanked” or “underbanked.” This means those families have never interacted with a bank or have poor access to mainstream financial services normally offered by Las Vegas retail banks.
Getting Hispanic consumers into a branch isn’t as easy as offering free checking or low-interest loans. Banks and credit unions face cultural barriers when reaching out to Hispanics, whether it’s language or earning trust.
These challenges can addressed by understanding Hispanics’ needs and knowing what they look for in a bank.
Wells Fargo &Co. believes earning trust and breaking through the language barrier can be as simple as an app. The San Francisco-based bank has launched a new update to its mobile banking phone app that provides customers with the option of selecting Spanish as their preferred language.
Only time will tell whether it succeeds.
But the new app along with television commercials targeting Hispanic consumers reflect the bank’s realization of how increasing diversity is affecting American culture.
And, with Hispanics one-third of the population in Clark County, they hope to promote heightened customer engagement among the Spanish-speaking population.
“We want to focus on the Hispanic market and understand the way they want to do business,” said Manny Garcia, Wells Fargo vice president and Southern Nevada district manager. “Overall, there is a large demand for banking services.”
Garcia said reaching out to the Hispanic market in Southern Nevada is a huge focus for the bank. He said Wells Fargo has spent more than $4 million to roll out the app nationwide and market it to potential consumers.
He said the Spanish-language option will be enormously helpful to Spanish-speaking customers. Wells Fargo customers can select Spanish by downloading the app from their app store or updating to the new version if they have a previously downloaded version.
According to Wells Fargo, customers can set their language preference by signing on to the mobile app using their user name and password, then go to mobile settings and select Spanish.
“The app will help many Hispanic families better manage their finances, and that puts them in a better position to realize their dreams, including paying for a higher education,” said Fidel Vargas, president and CEO of the Hispanic Scholarship Fund.
Wells Fargo said the new app is secure. In a statement, the company said the app keeps customers’ personal information safe since accounts are referred to by only nicknames, and account information is not stored on the phone.
“We don’t really see it as targeting Hispanics in their native language to do their banking with us,” Garcia said. “We have always been involved in the community.”
Garcia described the Spanish-language app as a “grass-roots approach” to reaching out to the Hispanic community in Southern Nevada. He said Wells Fargo is “always looking at other ways to provide services to its customers.”
Credit unions report impressive Q4
Credit unions have been a reflection of the communities they serve in Southern Nevada. Some credit unions, hit hard by the recession, merged; others closed and sold off loans and assets.
But those credit unions that survived, like the local economy, are rebounding, helped by double-digit-percentage increases for used auto loans and credit cards, Nevada Credit Union League data show.
“Credit unions got hit by the recession,” said Dwight Johnston, the league’s chief economist. “They have recovered, but they’ve been helped by becoming more aggressive on the lending side.”
Johnston said demand for loans has gone hand-in-hand with members feeling more financially secure, which includes rising home values and more job opportunities.
The league found 18 credit unions are based in Nevada, including nine in Southern Nevada, serving 221,601 members. At the end of the fourth quarter, those credit unions had $1.4 billion in loans, a $61.3 million increase from the 2013 fourth quarter.
Increases in four out of five lending categories drove the rise in fourth-quarter lending. Of the lending segments, only business loans declined to $157.2 million, a 9.6 percent drop from the fourth quarter of 2013, the report said.
Auto loans rose 6 percent to $55.8 million in the fourth quarter; mortgages rose 2.6 percent year-over-year to $819.4 million as of Dec. 31.
Credit-card lending by credit unions in Southern Nevada increased 14.5 percent to $68.2 million in the fourth quarter, and used-car loans jumped 17.5 percent year-over-year to $306.4 million.