If Hispanics drive emerging payment tech trends, the industry needs to take note
“Wait, let me check in first. I am Hispanic, after all.”
For whatever reason, I got hooked on the location-based social network Foursquare at the peak of its popularity a few years back. I liked the idea of being the “mayor” for certain places. And there were perks. My mayorship at a local coffee shop came with discounted coffee.
Unfortunately, Foursquare never reached its full potential and I stopped using it after a year.
But my comment above, which I made in jest more than a few times to a co-worker and friend at my last job with Mercator Advisory Group, bore truth.
A consumer survey at the time revealed Hispanics were more likely than others to use location-based social networks such as Foursquare. I was a real-life walking example of the survey’s results.
Fast forward a few years and Hispanics are at it again, and we might be the key to spurring the widespread adoption of emerging technology. Let that one sink in for a minute.
New findings from Bank of America’s Trends in Consumer Mobility Report show Hispanics are avid users of mobile for banking, payments and day-to-day tasks.
Here are a few key highlights:
- More than half (56 percent) of Hispanics would use or already use their phone to make purchases at checkout, compared to just 36 percent of non-Hispanic counterparts
- Seventy-seven percent of Hispanics are likely to use emerging payment methods such as mobile wallets and social media apps, with 72 percent citing they would use or already use their bank’s peer-to-peer payments service
- Of those Hispanic respondents using a mobile banking app, nearly half (45 percent) are accessing their app once a day or more, in contrast to 32 percent of non-Hispanic respondents
Sure, this is just one survey out of countless consumer surveys out there. But, what can the industry learn from these particular results?
Well, for all the time we spend talking about millennials, I haven’t read much that takes a deeper dive into the demographic. And that’s a mistake given some of the data available to us.
As of 2015, some 22.7 million U.S. Hispanics are millennials. Nielsen, earlier this year, noted this demographic will steer spending trends in the next 20 to 30 years. And if Hispanics are relying on their smartphones to spend money, there’s an opportunity for banks, retailers and others to directly market to them.
Those entities also need to keep in mind how much more tech savvy Hispanic millennials are than their parents and grandparents.
While my mother was born in the U.S., she didn’t start using a smartphone until her late 50s. She’s 63 now. Her aversion to emerging technology probably came from the fact my grandmother, who was born in Puerto Rico, didn’t have much use for shiny new gadgets. I remember when CD players became a thing, my grandmother still listened to her music via a record player on Sunday afternoons.
Another key difference between Hispanic millennials and their parents and grandparents is that we trust financial institutions despite events such as the 2008 financial crisis.
My grandmother kept thousands of dollars under her mattress. She didn’t trust banks much and that view somewhat extended to my mother, who ironically married a bank teller in my father.
But when it came time for me to open my first checking account at the local community bank, it was my mother who helped me with the process. By that point, my mother trusted banks more and that was passed onto me.
But of all the different takeaways the industry can gleam from Bank of America’s survey, I believe the biggest one is something that’s long overdue.
It would behoove the industry to hire qualified Hispanics to help better connect with the demographic.
To be clear, I’m no fan of affirmative action. I believe employers should vet potential employees based on their track records, skills and other related factors. But I find it hard to believe there aren’t enough qualified Hispanics for positions this industry has to offer.
I will attend my third Money2020 conference in a week. And when I settle in to listen to panel discussions or speak with executives, I’ll sit opposite mostly white faces. I’ve covered this industry for almost 10 years and this has been the case throughout that time.
Again, I’m not advocating for diversity for the sake of diversity. But when you view Bank of America’s survey results as they relate to how consumers’ digital behavior is changing, wouldn’t it make sense to have some kind of Hispanic representation on marketing or product development teams? How can you truly connect with different demographics and meet their needs when there’s little to no representation of those consumers in the trenches?
I hope that starts to change before next year’s Money2020.