I was visiting with a client a few weeks ago who said her credit union has an opportunity in their market with a growing Hispanic population.
But…the snag! With all ideas there always seems to be one, doesn’t there?
Many board members were opposed to doing anything different than they always had. They pointed out that the credit union was very successful financially. And they are – in excess of 1.5% net ROA the past four years. They pointed out that they would need a translator on staff. They pointed out other issues they perceived as problems.
Everything they pointed out were true facts! They couldn’t be denied.
Therein lies the real problem though. We too often look at the problems and are stopped dead in our tracks. What we really need to do is to step back and look at the bigger picture. Like…what is our future?
After I had thought about what my client had discussed with me, I had another conversation, with Miriam De Dios, Emerging Markets Director for Coopera Consulting.
According to De Dios, here are some undeniable facts:
- The current credit union industry is experiencing flat growth.
- There is an aging membership base that no longer borrows.
- There is increased regulatory pressure to serve those of modest means.
- There is financial institution saturation in the mainstream middle and upper income markets.
All of this leads up to CUs asking where their “blue ocean” is for growth.
New markets like minorities and immigrants, especially Hispanics, are underserved and offer great opportunity for CUs because of their growing populations, their relative youth, their participation in the workforce, their entrepreneurship and their growing purchasing power.
This is a huge opportunity, and a growing one; a market that is largely unbanked and needs products and services. Credit unions were made to order for this market segment. All you have to do is figure out how you can adapt to them, just like you have to do for any other demographic group. For this market group, find out more from noted resources such as Coopera Consulting.
2 comments so far
1 Ron Shevlin // Jan 22, 2008 at 9:16 am
Anytime I hear execs resist change or something new because of how successful they HAVE been, I’m reminded of all the brokerage/mutual fund commercials: “Past results are no guarantee of future returns.”
Hit with that attitude, you’ve got to ask: “That’s great, but for how much longer can you sustain those returns/results?”
But, regarding an emerging market like the Hispanic population, I would say that the challenge is not “figure out how to adapt to them” but “figure out what makes this segment’s financial needs and buying behavior different and unique” and then connect your marketing and delivery strategies to those needs and behaviors.
2 Andy // Jan 22, 2008 at 3:31 pm
Good post, emerging markets could be a huge benefit to the CU market…if only we can meet the needs of those groups. It takes some change and creativity, and most execs have gotten complacent. It’s worked for the past 50 years, why wont it keep working?
Sure there are going to be some snags, and thats what the “higher-ups” are worried about, but success is about taking those snags head-on and figuring out how to overcome them. There is always a way.
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