Welcome Tech: The Hispanic Consumer and Financial Wellness
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Welcome Tech: The Hispanic Consumer and Financial Wellness

As the 2020 Census results are gradually released, the growth of the US population over the past decade has been predominantly driven by Latino population growth; yet, again. The Latino or Hispanic population grew to 62.1 million, representing 23% growth for this cohort over the past decade. When compared to the non-Hispanic population, that sector grew by only 4.3%. 

However, despite its growth, the Latino community in the US has often struggled to establish strong credit ratings due to a number of factors including but not limited to language, trust of traditional banks, and financial literacy. Daniel Ayala is the Executive Vice President, and Managing Director of Financial Services at Welcome Tech, the fintech with the purpose of providing immigrants the resources needed to thrive in a new country. 

Here, Ayala looks at the different factors that affect the Latino communities’ financial capabilities in the United States, and what fintechs and other financial organisations can do to help:  

Daniel Ayala, Executive Vice President, and Managing Director of Financial Services at Welcome Tech
Daniel Ayala, Executive Vice President, and Managing Director of Financial Services at Welcome Tech

The Hispanic segment is very diverse in terms of country of origin, race and level of acculturation.  Historically, traditional financial services firms have focused on the Hispanic opportunity by marketing in Spanish, ensuring sales and service channels are language enabled, and in some limited cases, developing and targeting certain unique service needs to attract and retain this growing segment of the population.

Historically, acculturation has occurred in many foreign born communities dating prior to the ’80s.  However, since the mid-eighties, large diverse segments, such as Hispanics, are not assimilating as quickly to mainstream society compared to the level of cultural adoption observed in prior waves of migration to the US. Why? The last three decades have brought about an incremental influx of relatively young foreign born immigrants that have often arrived in increasingly larger scale concentrations of Hispanic populations centred around just about every large metropolitan area including Los Angeles, Houston, Miami, Chicago, New York, and many more.  This factor alone is the key driver as to why understanding the unique needs and challenges faced by the Hispanic community is pivotal to supporting and enhancing their financial wellness.

Here are some key factors that influence the ability of both banks and Fintechs to effectively connect and engage with this community in order to help address their financial services needs:


While most Hispanics over time adopt the English language so they can excel in education, and in order to become gainfully employed, a large portion of Hispanic households remain bilingual or Spanish dominant.  In fact, media consumption is often multilingual and in this highly connected world, they are often in closer touch with friends and relatives back home through social media and messaging apps, prompting the need to stay current with the mother tongue.


Latin America has seen the impact of deep economic crisis on the value of local currencies and the fragile economies working hard to maintain the delicate balance of public policy to help support the lower income segments of the population while managing economic/fiscal policies that allow the countries to maintain acceptable credit ratings/standings in a highly competitive and demanding global marketplace.  Occasionally, political changes or economic forces have negatively impacted the acquisition power of local currencies and/or impacted the overall stability of the banking systems in Latin America.  These economies are fragile and for the most part still highly dependent on direct foreign investment and/or debt issuance in the global capital markets.  In the past, Argentina, Mexico, Venezuela and Brazil have all experienced significant economic challenges.   When people migrate to the US they have greater confidence in the US economy but are not as familiar with the US banking system and often distrust traditional banks due to the hardships experienced at home.


Traditional brick and mortar financial institutions have increased their focus on the segment.  In-language bankers and service resources are normally easily accessible in most communities.  Most importantly, the presence of traditional banks in the neighbourhoods where Latinos concentrate notably increased over the past 20 years yet the ultimate impact of the pandemic on the advances of geographic focus by banks to this segment are yet to be measured. Some key financial institutions have reduced the number of branches as a result of the digital channel inroads made to date, resulting in lower reliance on physical branches to serve customers.

Financial literacy

While most of the US population is banked, most of the Latin American countries are still facing a largely unbanked population due to the economic conditions and the perceived high cost of banking services to the layperson in Latin America.  The unbanked population ranges between 40% to 70% of the population depending on the country of origin.  Serving this customer requires a focus on spending time and resources in both serving AND educating, both proactively and/or reactively.

Welcome Tech is uniquely positioned to effectively address the above-noted factors as the foundation of its mission aligns with the needs of the segment, bridging the gap often encountered by most traditional financial services institutions.

Consumer Behavior

Hispanic consumers’ top driving value is always family (collective ethos), and as such their financial decisions often stem from that key value system.  Here are a couple of observations:


Families will often sacrifice as much as possible to cover their children’s advanced education above and beyond other key priorities such as saving for their own retirement.  In turn, the children are often culturally raised to understand that they have an obligation to their parents and often will support or fully cover the needs of their aging parents; hence college savings are often more important than retirement savings.

Family support

Families will often support members in need voluntarily.  Not a loan but ongoing financial support due to family ties and economic hardships.   Consumer remittances are a good example and evidence of this clear obligation.  Billions are transferred between the US and Latin America.  Mexico alone represents over $26billion in family remittances today.  Often the beneficiaries are parents, partners, siblings, or children.   During the housing crisis, many Hispanics employed in the construction field lost their jobs and turned to lower-paying jobs.  In some cases, their families in Mexico and El Salvador provided the extra support required to help over this period of time. It’s a reciprocity understood within the Hispanic ethos.


The work ethic of the Hispanic employee is well known across the US.  The Hispanicperspective is that hard work pays off and if needed any type of work that helps meet financial goals is acceptable.  However, due to the lack of experience with credit and the resulting lack of credit history and limited financial education, Hispanics often underutilise credit and/or have limited access to credit.  Financial education is a key factor here in educating Hispanic customers in understanding credit and managing it to their advantage when needed.

Welcome Tech’s products and services effectively align to the unique values and needs of the segment, and their focus on educating, empowering, and providing solutions to meet the market’s unmet needs is critical to the cohort’s success. The solution must be 360.


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