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Short InterestsHispanic market an opportunity

Aaron Siegel306 words28 March 2005Investment NewsINVN6Volume 9; Number 12English(c) 2005 Crain Communications, Inc. All rights reserved.NEW YORK - The Hispanic market is emerging as a growing demographic, and the financial servicesindustry is taking notice.

The Hispanic Market Monitor, produced by SYNERGISTICS Research Corp. in Atlanta and released onMarch 1, examines the attitudes and financial services profile of Hispanics. The survey found that this marketoffers a major opportunity for financial institutions.

The survey found that a significant portion of the Hispanic population uses checking accounts (82% of thoseborn in the United States and 64% elsewhere), home mortgages (58%; 22%) and investments (44%; 10%).However, CDs (23%; 11%), IRAs (25%; 8%) and MMAs (16%; 8%) have yet to catch on.

Hispanic purchasing power has more than tripled in the past 15 years, while U.S. buying power has gained athalf that rate. It is expected to grow 89% to $926 billion from $491 billion between 2000 and 2007, accordingto The Selig Center for Economic Growth at the University of Georgia, which has projected that growth ratedespite lower usage of banking services among this segment compared with the general population.

``Financial services have to target this market segment very specifically and very cautiously,'' said WilliamMcCracken, chief executive of SYNERGISTICS. ``They can't expect to capture this market the same waythey capture the general population.''

The survey found that cultural characteristics and specialized needs must be addressed when working withthis market segment. For example, many Hispanics use check-cashing centers and Hispanic bankinginstitutions to fulfill their financial needs.

The data were compiled in a national telephone survey conducted in October and November with 1,000telephone interviews with self-identified Hispanic consumers conducted in Spanish or English, based onrespondent preference.

Big contrast: Financial services usage by 1,000 Hispanic respondents Stewart Turner * Source:SYNERGISTICS Research Corp.Document INVN000020050401e13s0000r