As much as I believe in diversity, equity, and inclusion (DEI) initiatives as a driving force for business and society, the reality is that in the aftermath of the last few years, many marketers in corporate America are fatigued by the concept. While I don’t agree with them, I believe DEI—as a term—has become a catch-all for anything involving underserved communities.
In an era of severe cost cutting and fear over what will happen to this country—financially and otherwise—many marketers just don’t view DEI as important. From what I’m hearing and seeing, they think it’s time to double down on business priorities, and DEI doesn’t fit the bill.
But here’s the thing: Focusing on DEI can boost the bottom line
Unfortunately, the economic power to be gained from marketing to diverse consumers has been lost in the DEI messaging—the messaging which all too often focuses on doing the “right thing” from a societal standpoint rather than the efforts’ financial benefits. If you ask me, simultaneously improving society and the bottom line are not only the exact right reasons to emphasize DEI, but sufficient reasoning as well.
For instance, boosting financial literacy for diverse consumers, particularly entrepreneurs, offers a slew of benefits, especially given the anticipated growth in their buying power. Consider that Hispanic consumers currently make up over 18% of the total U.S. population, and their buying power is projected to reach $2.6 trillion by 2025. The Hispanic population also skews younger—with Adweek reporting that 58% of Hispanics in the U.S. are under age 34.
It’s worth noting that this isn’t just an idea for financial service companies—it’s also an opportunity for any brand that wants to connect with communities that need financial education and/or tend to be loyal to the companies that invest in them. To put it simply, financial literacy is nowhere near where it should be for many of these younger, diverse consumers who are coming into their spending years. And it’s time we change that.
With that in mind, here’s a breakdown of what financial education could look like, depending on the group and life stage.
Financial education for Gen Z and Gen Alpha
Proactively teach Gen Z about financial literacy and how investing their money will set them up for success. Compared to their Caucasian counterparts, I see that minority communities remain consistently driven by a goal of home ownership and a life that will allow them to support themselves and their families. However, many don’t know how to do that.
Most financial education programs are tailored to the mainstream population rather than diverse populations with different financial goals—such as anticipating that they’ll need to provide financial support to their parents as they age. That means these groups need to figure out how to make and save money differently than their Caucasian counterparts. It’s worth noting how few financial influencers from diverse communities have hit it “big,” and unfortunately, that is the sort of content Gen Z consumers are looking for. The same goes for books. Financial education needs to include cultural nuances that resonate with underserved communities.
Financial education for entrepreneurs
Proportionally, Hispanics tend to comprise the highest percentage of entrepreneurs, yet they have the lowest rates of lending. The Federal Reserve’s Small Business Credit Survey found that only 19% of Hispanic-owned businesses received the full amount of financing they sought in 2021, compared to 35% for white-owned businesses.
Hispanics also have the highest rate of fintech adoption among racial groups, with 92% using technology-driven financial products compared to 74% of white consumers. This adoption is driven by barriers in traditional financial services, such as language obstacles, high fees, and past negative experiences, which make fintech a more accessible option for many diverse communities.
And we’re not just talking about selling financial products, either. Beyond loans and financial support, entrepreneurs need mentorship and continuous education related to managing their money once they’ve started a business.
Financial education for the sandwich generation
For those who aren’t familiar, the “sandwich generation” has nothing to do with your demographics. It’s solely about where you are in your life and is a moniker used to suggest that you’re taking care of kids while also taking care of aging parents. Note that both Hispanics and Blacks over-index in “sandwich” behavior, in part because they have more children but also because it’s not as common in Caucasian families to take in elderly parents and care for them yourself.
But in Black and Hispanic communities, there’s an expectation (and a need) to care for the elderly financially, emotionally, and otherwise. In the U.S., sandwich generation caregivers are twice as likely to report financial difficulties (36% versus 17%) compared to those only caring for parents over age 65. Providing tools, services, and support for those in the sandwich generation is an immense opportunity for companies looking to build brand loyalty.
While it might feel counterproductive for a non-financial brand to teach people how to save their money instead of spending it on the products and services they’re selling, the reality is that consumers will spend money on what they truly want. As their income grows, they will remain loyal to a brand that looks out for them.
Marina Filippelli is CEO of Orci.
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