Multicultural markets are underserved by the financial services industry for many reasons, but the good news is the current state can change, and is changing.
First, executives and leaders in financial services companies are starting to educate themselves about the markets and get the straight story. There is a strong interest in and need for financial products and services in multicultural markets, especially as the cultural markets continue to grow. Who can ignore the recent Census Bureau’s findings indicating that America is becoming more diverse? According to the Pew Research Center, “Racial and ethnic minorities accounted for 91.7% of the nation’s population growth over the past decade.”
Could it be that the word underserved creates discomfort among financial services professionals? Maybe the word underserved has developed a bad connotation? As in, underserved = people who are unable to afford products or services; underserved = people who are poor risks; underserved = unprofitable business; underserved = down market. All of these, of course, are presumptions that lead to misperceptions and stereotypical thinking, if not challenged. The fact is the served population is shrinking, and there is no denying it!
Second, companies can make and are making a dedicated effort to reach these populations. A focused strategy is the first step in accomplishing this business objective – just as with any other business initiative. Implicit in this action is the need for leadership and executive sponsorship. In many organizations, multicultural efforts begin at the grassroots level with the financial representative. These efforts never make their way to the top and, therefore, lack executive visibility, sponsorship, or support. As with any business program, that which is not on the organization’s radar is at risk of encountering unnecessary resistance, lack of funding, or leadership – almost ensuring a short life span.
Third, financial services providers are learning how to meet multicultural groups where they are by aligning sales and service (all aspects of it) with their needs (language, culture, or otherwise). While some groups may lack the degree of financial education necessary to create their own strategies or even to seek out help with their financial planning, future generations are depending on them to take the right actions for tomorrow. Said differently, these markets are ripe and ready to be worked. Who wouldn’t want to work with a consumer base that is ready and eager to be educated and buy products?