Synovate Study Finds U.S. Hispanics and African-Americans Still Have Much Lower Ownership of Several Financial Services and Prod

Synovate Study Finds U.S. Hispanics and African-Americans Still Have Much Lower Ownership of Several Financial Services and Products

CHICAGO, Aug. 13 (AllPayNews) -- Despite growing use of
financial services and products, and more targeted communications, U.S.
Hispanics and African-Americans continue to be 'unbanked' and 'underbanked'
according to Synovate's 2008 U.S. Diversity Markets Report.

To better understand financial behavior among multicultural consumers in
the U.S., Synovate recently surveyed a total of 4,000 males and females ages
18+, including 1,000 General Market respondents, 1,000 African-Americans and
2,000 Hispanics.

Bank Accounts and Investments

While the percentage of U.S. Hispanics with any type of bank account is up
7%, from 70% in 2004 to 77% in 2008, this is quite low when compared to
General Market and African-American consumers, both of which are at least 90%.
Even though African-Americans have increased ownership of checking or savings
accounts by 8% since 2004, from 82% to 90%, they, and Hispanics still have
much lower ownership of several types of investment accounts, including:

-- IRA or 401k plans: 54% ownership for African-Americans and 32% for
Hispanics versus 72% for General Market consumers

-- Stocks or bonds, individually or as part of a mutual fund: 33%
ownership for African-Americans and, 18% for Hispanics versus 60% for General
Market consumers

-- Certificates of Deposit (CDs): 25% ownership for African-Americans and
24% for Hispanics versus 36% for General Market consumers.

"A substantial number of multicultural consumers don't have jobs with
retirement plans," said Denise Marks, Vice President of Diversity research at
Synovate. "This is particularly true for Hispanics, almost half of who are
employed in the blue collar industry and don't have the opportunity to
participate in these types of investment accounts."

Credit Cards and Mortgages

The financial services gap between multicultural consumers and the General
Market is also evident in credit card ownership, with 69% African-Americans
and 51% of Hispanics owning cards compared to 87% of General Market consumers.
While more than half (54%) of General Market consumers hold a mortgage, the
percentage of African-Americans and Hispanics who do is only 47% and 26%,
respectively. Also, only about one-quarter of African-Americans and Hispanics
have a home equity line of credit (23% each) compared to 35% of the General
Market.

Health Insurance and Financial Attitudes

Health insurance is another area in which Hispanics lag compared to
General Market and African-American consumers. Just 62% of Hispanics say they
have health insurance versus more than 80% of African-American and General
Market respondents. As with investment accounts, this lower incidence of
coverage is related to having jobs in which employers do not offer health
coverage for employees.

Socioeconomic circumstances are certainly a factor in the lower ownership
of financial products and related services among multicultural consumers.
However, the relationship that Hispanics and African-Americans have with
financial institutions is also impacted by cultural differences. While about
the same amount of Hispanics and General Market consumers feel that they are
treated well by financial institutions (36% and 41%, respectively), only 31%
of African-Americans feel this way. When considering Hispanics by
acculturation level, almost 40% of more acculturated Hispanics -- those with
higher incomes that speak English or are bilingual -- agree that they are
treated well compared to those who are less acculturated (29%), who tend to be
foreign-born and rely on Spanish-speaking services.

When asked about their financial outlook, it is not always positive for
these consumers. Only 18% of Hispanics and 12% of African-Americans agree that
their financial situation has gotten better in the past few years.

"The good news is that multicultural consumers are building trust towards
financial institutions and owning more financial products, but there are still
gaps that need be addressed," said Elliot Savitzky, Vice President in
Synovate's Financial Services group. "This is especially true in the subprime
mortgage market, which has hit multicultural consumers particularly hard."

Remittance

A bright spot for the financial sector is remittance. Sending money to
relatives who live outside of the U.S. continues to be an important activity
in the lives of U.S. Hispanics, although there are signs that this too has
been slowing due to rising unemployment. More than half (54%) of U.S.
Hispanics say they send money to family or friends outside of the U.S. Almost
three in ten (28%) send money once a month or more and, on average, the amount
sent is $230. In addition to traditional remittance companies such as Western
Union and Orlandi Valuta, banks such as Bank of America and discount retailers
including Wal-Mart have launched their own remittance programs over the past
several years to attract this audience. Due to current immigration legislation
and higher border security, Hispanics that are undocumented or temporary are
tending to remain in the U.S. instead of going home to visit their families in
Latin America.

"There are many cases of seasonal workers from Mexico and other Latin
American countries not seeing their families in their home countries for
several years as it has become more difficult to cross the border," said
Marks. "Since it is less risky to send money via remittance, this area is
still an opportunity for marketers in spite of the current economy."

For more information on Synovate's 2008 U.S. Diversity Markets Report,
with data on buying power, language use profiles, and media, product, and
service usage information for Hispanics, African-Americans and Asian-Americans
visit www.synovate.com/insights/publications/reports/diversity [1] . To learn more
about Synovate diversity research, visit www.synovate.com/whatwedo/diversity [2] .
For more information on Synovate's financial services research expertise visit
www.synovate.com/whatwedo/financial-services [3] .

About Synovate

Synovate, the market research arm of Aegis Group plc, generates consumer
insights that drive competitive marketing solutions. The network provides
clients with cohesive global support and a comprehensive suite of research
solutions. Synovate employs over 6,000 staff in 63 countries.

For more information on Synovate visit www.synovate.com [4] .

Contact:
Jennifer Chhatlani
+1 312 526 4359
jennifer.chhatlani@synovate.com [5]

SOURCE Synovate