As ethnic minority populations get larger and more affluent, they are becoming key markets for U.S. financial services providers. While some providers already have ethnic marketing strategies, few of these include the Web, which will soon become a competitive requirement.
With the spending power of Hispanic-Americans and Asian-Americans expected to total over US$1.3 trillion by 2007, many financial services providers are preparing for a polyglot future. In a new report, Ethnic Minorities, Financial Services, and the Web, Celent Communications urges firms to consider the trends of increasing affluence and Internet usage among these groups, as well as their preferences for primary language communication. Celent recommends that providers make the Web a part of their strategies to reach and serve these markets.
“Asian-American and Hispanic-American spending power is growing between 8% and 10% annually, much faster than the general population. But their use of financial services products still lags behind the general population. These markets are important ‘green field’ opportunities for financial services providers,” says Sang Lee, co-author of the report and manager of Celent’s securities and investments group. “At the same time, Internet usage among Asian-Americans is higher than of the general population, and while Hispanic-Americans trail both groups in Internet use, the rate of Internet penetration in this group is growing faster than any other.”
“Financial services providers need to expand their ethnic market strategies beyond the core ‘three Rs’ of recruiting, ‘riting, and real estate,” adds Matthew Josefowicz, co-author of the report and manager of Celent’s insurance group. “Just as adding primary language call-centers and ATMs became a competitive requirement in serving ethnic markets over the last few years, we anticipate that primary language online services will become competitive requirements within the next two to five years — and that early movers will secure a competitive advantage.”
The 45-page report provides a wealth of population, economic, and behavioural data on Hispanic- and Asian-Americans, with specific focus on Chinese-Americans, the largest sub-group of Asian-Americans. The report includes 43 charts of detailed market data and projections, as well as the results of a survey of 43 leading banks, brokerages, and insurance companies on their current in-language offerings.