Ethnic Minorities, Financial Services, and the Web

January 28, 2003

Abstract

Boston, MA, USA New York, NY, USA January 28, 2003

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, , 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 behavioral 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.

A is available online.

of Celent Communications' Retail Banking, Retail Securities and Investments, Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA New York, NY, USA January 28, 2003

Return to report Abstract

 

EXECUTIVE SUMMARY 4
INTRODUCTION 5
MARKET OVERVIEW: MINORITY MARKET 6
  Background 6
  Ethnic Minorities and Economic Clout 7
  Ethnic Minorities Online 10
MARKET OVERVIEW: U.S. HISPANIC MARKET 13
  Background 13
  U.S. Hispanics and Financial Services 15
  U.S. Hispanics Online 19
MARKET OVERVIEW: U.S. ASIAN HOUSEHOLDS 21
  Background 21
  U.S. Asians and Financial Services 25
  U.S. Asians Online 28
MARKET OVERVIEW: ETHNIC MINORITY-OWNED SMALL BUSINESSES 30
  Background 30
  Ethnic Small Businesses Online 33
TRADITIONAL ETHNIC MARKETING STRATEGIES 34
  Recruiting, 'Riting, and Real Estate 34
THE WEB: REACH, INFORM, SERVE 36
  Reach and Inform 36
  Serve 36
IN-LANGUAGE WEB SERVICING AND ROI 38
  Calculating ROI 38
  Ethnic Markets/E-Business Disconnect 38
THE CURRENT STATE OF SERVICE 39
  Banks 40
  Brokerages 41
  Insurance 42
CONCLUSIONS AND RECOMMENDATIONS 43
APPENDIX: LIST OF FIGURES 44

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