How community banks can reach Hispanic customers

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Hispanic customers and business owners are vital members of their communities. Here’s how some community banks are reaching this diverse demographic’s unique and varied needs.

By Cheryl Winokur Munk

Some community banks are making a conscious effort to reach Hispanic and Latinx customers, a diverse demographic that is growing exponentially.

There were nearly 60 million Latinx people in the U.S. in 2017—roughly 18% of the total population, according to Pew Research. By contrast, there were 14.8 million, or 6.5% of the population, Latinx people in 1980. They are also a driver of new mortgage business, representing 51% homeownership growth in the U.S. over the past decade, according to MGIC.

To reach this demographic, some community banks are hiring bilingual tellers and other staff, offering Spanish-language versions of their websites, providing marketing materials in Spanish and English, and connecting with local Hispanic and Latinx business owners and groups.

Certainly, community demographics often play into a bank’s customer acquisition efforts. The Community Bank in Liberal, Kan., for example, counts the bulk of its customers from Seward County, where 63.1% of residents identified as Hispanic or Latino as of July 2019.

“To ignore [Hispanic and Latinx customers] would not only be socially unacceptable but dramatically detrimental to the bank’s economic viability.”
—Mark J. Schepers, The Community Bank

“To ignore this segment of the population would not only be socially unacceptable but dramatically detrimental to the bank’s economic viability,” says Mark J. Schepers, chairman, chief executive officer and president of the $140 million-asset community bank.

Be proactive to attract Latinx customers

Community banks that want to cater to this population need to be proactive. It can require targeted marketing campaigns, outreach and face-to-face interactions. It may also mean hiring Spanish-speaking multilingual staff, a prerequisite to winning relationships with potential customers who primarily or only speak Spanish.

While many first-, second- and third-generation Hispanic and Latinx people are fluent English speakers, some of them are more comfortable speaking in Spanish. Depending on the community, there may be considerable need for bilingual services. The U.S. has the highest concentration of Spanish speakers in the world outside of Mexico—more than 50 million people.

To address this reality, and to make customers feel at ease, banks are being more deliberate in their hiring. At The Community Bank, 44% of employees are bilingual, including 66% of its tellers, Schepers says.

The bank’s website has a Spanish option; it provides loan and deposit applications in Spanish; its debit cards can be activated in Spanish; and Matricula Consular cards, issued by the Mexican government, are an accepted form of identification. Additionally, The Community Bank has designed a loan product for the purpose of establishing a credit history for its customers. The bank also sponsors Spanish broadcasts of the local high school’s boys’ soccer team, Schepers says.

Eliminating barriers

Face-to-face connections can also be important in winning new business from Hispanic and Latinx customers, according to Miguel Lopez, senior vice president and chief community outreach officer at $843-million asset Encore Bank headquartered in Little Rock, Ark., which actively courts these customers.

As part of his role, Lopez frequently knocks on the doors of local Hispanic- and Latinx-owned businesses for relationship-development purposes. The fact that he speaks Spanish as a first language is critical for many of these potential customers whose first language is Spanish. It makes them more comfortable, he says, and it eliminates the language barrier.

Only a small number of community banks offer a Spanish version of their website, but this, too, can be critical to attracting Hispanic and Latinx customers, because it reinforces the idea that the bank is committed to serving them. For example, if Lopez tells a business owner in Spanish why the bank is a good fit, but the website is hard for the person to understand, it doesn’t do the business owner—or the bank—much good, he says. Finding ways to better serve the Hispanic and Latinx market is “good business, and it’s good for business,” Lopez adds.

Differentiate your bank

In addition to what these community banks are doing, there are other options for community banks interested in expanding into new markets or campaigns focused on Hispanic and Latinx customers.

Banks should be more aggressive about getting out to the community, such as partnering with business groups like a local Hispanic chamber of commerce, says Ramiro A. Cavazos, president and chief executive officer of the United States Hispanic Chamber of Commerce.

Banks should also be more proactive about using technology to reach Hispanic and Latinx customers, Cavazos says, as many are searching for information online and on social media about things like small business loans, particularly during the pandemic when their businesses are under pressure.

Especially during COVID-19, community banks have an opportunity to differentiate themselves with Hispanic and Latinx customers by offering lifelines to help keep them afloat in difficult times, Cavazos says. Getting access to Paycheck Protection Program (PPP) loans, for instance, has been a particular challenge and community banks can make a real difference in the lives of many of the hardest-hit business owners, he adds.

Cheryl Winokur Munk is a writer in New Jersey.