Study: Minorities Are Gold Mine for Financial Services Marketers
Ethnic minorities account for more than 30 percent of the U.S. population, Datamonitor said, and include 35 million Hispanics, 34 million African-Americans and 10 million Asian-Americans. These groups account for a large part of the total market for banking and insurance products, the research firm said.
"Creating a successful ethnic market program requires efforts on both the marketing and distribution sides," said Brendan Ford, an analyst with Datamonitor's financial services practice. "Our research shows that those companies with integrated programs including advertising, event marketing, partnerships, customer education and multicultural recruiting have achieved an extremely high share of their target ethnic market, sometimes as high as 50 percent."
The Datamonitor study found that ethnic markets account for $681 billion, or 16 percent, of outstanding mortgage loans and $167 billion, or 18 percent, of the market for asset accumulation life insurance.
It also noted that the savings behavior of ethnic minorities has increased, with 42 percent of minority households now actively saving compared with 25 percent in 1989. This has led to a sizable increase in the purchase of savings and investment products, Datamonitor said.
"Financial services institutions should use culturally relevant messages, create special customer-education efforts and work to attract front-line employees that represent the diversity of the communities they serve," Ford said.