Most US banks and insurance businesses, unlike many media and grocery companies, have avoided marketing their products and services specifically to Hispanic consumers. Until now, these differences made sense: the 38 million Hispanics who live in the United States typically spend less than the average US consumer on financial services but more on groceries and Spanish-language media.
Financial institutions could be missing out on a huge opportunity. By 2010 spending by Hispanics living in the United States will probably have risen to more than $800 billion a year, from around $500 billion, with financial services accounting for a substantial chunk of that increase.1 Industries that currently cater to the Hispanic market benefit conspicuously from the growing population. But industries—for example, housing, health care, and financial services— that target middle- and upper-income consumers are likely to benefit significantly as Hispanic household incomes rise.
To succeed in this diverse market, banks and insurance companies will have to do more than translate their brochures into Spanish. They could benefit from the lessons learned by other consumer products marketers.2 In courting Hispanics, financial-services companies must not only attract a new customer segment but also change its buying behavior. First, financial institutions...