The Changing Face of Financial Services

A new study projects an enormous increase in immigration through 2050. Is your credit union equipped to serve these new potential members?

 
 

Political analysts dissect the results of every political primary based on demographics: race, religion, age , income, gender . In many contests, you can see the different concerns of each segment reflected in their voting choices. The impact of demographic differences can be felt throughout our society today.

Earlier this month, the Pew Research Center released a study on the changing face of America . The study projects that the foreign-born share of the US population will increase to 19% by 2050--surpassing the peak during the last great immigration wave at the turn of the 20th century. New immigrants and their offspring will account for 82% of the US population increase between 2005 & 2050. At the current birth rate, this translates to over 83 million people--the equivalent of the entire credit union membership today!

Many financial institutions recognize that these demographic subsets have different financial needs and concerns as well. Is your credit union positioned to serve this growing community?

A Case Study: Serving Latinos in DC

This increased diversity is evident today in our nation's capital. DC's population has traditionally been White and African-American. Today, over 8% of residents are now Latino and several neighborhoods have Latino populations of nearly 25%.

IDB-IIC ($295M), OAS ($132M) and District Government Employees ($41M) joined together in 2006 to serve the heavily Latino Mount Pleasant neighborhood in Northwest DC . To bypass charter limitations, they formed a shared branch called "Acceso", the Spanish word for access. As the name implies, Acceso is designed to meet the needs of this population by providing financial services such as:

  • Accepting foreign ID cards so undocumented workers can open accounts
  • Non-interest earning savings accounts for members without documentation or Tax ID numbers so they can keep their money in a safe place
  • Educational programs to help members prepare for home loans
  • Credit risk evaluation based on timely rent and utility payments, not just credit score
  • Competitively priced wire transfers that cost less than a third of what competitors like Western Union charge

So far community response to Acceso has been positive. Community involvement through neighborhood organizations and community open houses has helped to strengthen member growth for the founding credit unions.

The success of Acceso underscores two unique advantages of the credit union charter: our cooperative philosophy and our desire to serve those who need it most . Acceso's example shows that credit unions can adapt to changes in the population around them and build upon the cooperative tradition to better serve the needs of new member groups.

Related Resources

If you are interested in learning more about serving 1 st Generation Americans , please join other credit unions on March 20 th for a live discussion about the most effective strategies for serving these unique members.

Callahan & Associates is hosting a special 5-part series on effectively targeting members with unique needs. Each 90-minute session covers a demographic opportunity that your credit union can pursue as an avenue for organic growth. By breaking down your membership into manageable segments, you can increase your ability to personalize your services, address particular areas of concern, and extend your reach within each particular group. Specifically targeting unique member segments can ultimately benefit your bottom line, improve service, and benefit your entire of membership!

 

 

 

Feb. 25, 2008


Comments

 
 
 
  • Good article on how credit unions are helping. Thanks for the inspiration.
    Anonymous