How fintech partnerships can make financial planning more inclusive

A growing number of fintech companies are targeting their apps at the Hispanic market – and for good reason. Hispanic consumers are twice as likely to research financial products and services using mobile apps, according to CUNA Mutual Group’s 2018 TruStage What Matters Now consumer research.

While many apps are focused on helping Hispanics meet immediate financial needs, such as paying off debt and saving for short-term goals, some – like Finhabits – encourage long-term financial planning. The Finhabits digital platform is designed to make it easier for Hispanics to build the habit of investing for their retirement in low-cost portfolios of stocks and bonds.

“Finhabits has simplified retirement savings so more people in our community can reach their financial goals,” said Carlos Garcia, founder and CEO of Finhabits. “We created an easy-to-use service that is available in English and Spanish and allows anyone (with a Social Security Number or an Individual Taxpayer Identification Number) to start saving with as little as $10 a week. Our mission is to make financial services more inclusive.”

An encouraging trend… and a troubling correlation

The timing couldn’t be better. More than 3 percent of Hispanics plan to make their first financial investment ever in the next 12 months, compared to 1.5 percent of non-Hispanics. This means Hispanics may represent almost a third of all new investors in the market in the next 12 months.

It’s an encouraging trend considering recent data on retirement savings within predominantly Hispanic communities. According to a study published by Finhabits, in the five top Hispanic metro areas in the U.S., more than 90 percent of small business workers do not have access to employer-sponsored retirement savings accounts. In those same five metro areas, only 4 percent of small businesses offer retirement plans to their employees, compared to 11 percent in the five least Hispanic metro areas.

“Our analysis found a moderate and troubling correlation between retirement savings and the Hispanic population of a city,” Garcia said. “This will have a long-term impact on the quality of life and the economy. We need more aggressive retirement education aimed at the Hispanic community and need to leverage technology to enable them to invest in their future easily even when they do not have access to 401(k)s.”

That’s where Finhabits – and credit unions – come in.

The Finhabits platform is built around the concept that you don’t need to be a millionaire to invest smartly. The technology provides Hispanic consumers easy access to high-quality, low-cost investing and retirement savings options. And the Finhabits team of experts watches out for every customer by monitoring accounts daily, rebalancing portfolios and reinvesting dividends as needed.

The difference a credit union can make

Often fintech companies like Finhabits desire – or even require – the support and partnership of established financial institutions. Digital marketplaces connect unknown third parties, which is still uncomfortable for some. But attaching the name of a trusted credit union to it? Well, that changes things.

“We’ve partnered with credit unions on the East Coast to give their members access to a simple retirement savings app,” said Garcia. “These partnerships have also allowed their members who are small business owners to facilitate a retirement savings benefit to their employees.”

Partnering with Hispanic-focused fintech companies – especially those that understand the credit union’s “people helping people” philosophy – will not only benefit your Hispanic members. It may even turn fintech startups and other industry disruptors from a competitive threat into your next competitive advantage.