Immigrants' Access to Financial Products and Services
Often times, immigrant communities across the U.S. are not part of the financial mainstream and lack the knowledge and resources to achieve financial inclusion. New York City's Office of Financial Empowerment (OFE) and the National Council of La Raza (NCLR) have undertaken extensive studies to identify the main barriers to financial inclusion for immigrant communities in the U.S. and what missed market opportunities exist.
OFE is the first local government initiative in the U.S. with a mission to educate, empower and protect low income New Yorkers so they can build assets and make the most of financial resources. With this mission in mind, OFE undertook the monumental task of surveying 1,324 New Yorkers in the Chinese, Mexican and Ecuadorian communities on their financial behaviors and relationships with financial institutions. The main findings of the survey were that structural and non-structural barriers to financial institutions exist, respondents were more likely to have long term savings aspirations like starting a business or saving for education and that savings behavior was prevalent, with savings rates higher among banked respondents.
NCLR undertook a similar survey of 1,038 Hispanics in California that attempted to identify pathways and barriers to financial inclusion for Hispanic immigrants. Of the 1,038 respondents, 20% were unbanked with the main reasons being concerns about immigration status and fears of identity theft. A main takeaway from NCLR's survey was that there is a great need for fundamental financial education to foster trust and understanding of financial institutions among the Hispanic community.
Both of these surveys offer great insights into the relationships immigrant communities have with financial institutions and what blocks them from financial inclusion. With these takeaways, financial products and services can be designed to address the structural barriers that dissuade immigrant communities from engaging financial institutions.