As much as I believe in diversity, equity, and inclusion (DEI) programs as a driving force for business and society, the truth is that after the last few years, many marketers in corporate America are tired of the idea. Although I don’t agree with them, I believe that DEI—just as a name—has become an all-encompassing phenomenon that includes marginalized communities.
In an era of cost-cutting and fear of what’s about to happen in this country—financially and otherwise—many retailers don’t see DEI as important. From what I hear and see, 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 increase the bottom line
Unfortunately, the economic power to be gained by marketing to diverse consumers is lost in DEI’s messaging—a message that often focuses on doing the “right” thing from a public perspective rather than the financial benefits of the effort. If you ask me, at the same time improving the community and the foundation are not only direct reasons to emphasize DEI, but also sufficient thinking.
For example, increasing financial literacy among various consumers, especially entrepreneurs, offers a number of benefits, especially given the expected growth of their purchasing power. Consider that Hispanic consumers currently make up more than 18% of the US population, and their purchasing power is expected to reach $2.6 trillion by 2025. The Hispanic population is also getting younger – as Adweek reports that 58% of Hispanics in the US are under the age of majority. 34.
It’s worth noting that this isn’t just an idea for financial services companies—it’s an opportunity for any brand that wants to connect with communities that need financial education and/or that tend to be loyal to the companies they invest in. Simply put, financial literacy is nowhere near where it should be for many of these young, diverse consumers entering their spending years. And it’s time we changed that.
With that in mind, here’s an explanation of what financial education might look like, depending on the group and stage of life.
Financial education for Gen Z and Gen Alpha
Encourage and educate 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 are still driven by the goal of home ownership and a life that will allow them to take care of themselves and their families. However, many do not know how to do that.
Most financial education programs are designed for the general population rather than for diverse individuals with different financial goals—such as the expectation that they will need to provide financial support to their parents as they grow older. That means these groups need to find a way to make and save money differently than their Caucasian counterparts. It’s important to note how few financial influencers from diverse communities have hit the “big one,” and unfortunately, that’s the type of content Gen Z consumers are looking for. The same goes for books. Financial education needs to include cultural nuances relevant to underserved communities.
Financial education for entrepreneurs
Equally, Hispanics tend to comprise the highest percentage of entrepreneurs, yet have the lowest rates of borrowing. The Federal Reserve’s Small Business Credit Survey found that only 19% of Hispanic-owned businesses received the full amount of financing they wanted by 2021, compared to 35% of white 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 to traditional financial services, such as language barriers, high fees, and negative past experiences, making fintech a more accessible option for many different communities.
And we’re not just talking about selling financial products, either. Besides loans and financing, entrepreneurs need training and continuing education related to managing their money once they start a business.
Financial education for the sandwich generation
For those unfamiliar, the “sandwich generation” has nothing to do with your statistics. It’s just about where you are in your life and it’s a moniker used to suggest that you’re taking care of children while also taking care of elderly parents. Note that both Hispanics and Blacks over-index on “sandwich” behavior, partly because they have more children but also because it is not uncommon for Caucasian families to take in elderly parents and take care of them yourself.
But in Black and Hispanic communities, there is an expectation (and need) to care for the elderly financially, emotionally, and in other ways. In the US, breadwinners are twice as likely to report financial problems (36% versus 17%) compared to those who only care for parents over the age of 65. Providing tools, services, and support to those in the sandwich industry is a huge opportunity for companies looking to build brand loyalty.
Although it may sound counterproductive for a non-financial product to teach people how to save their money instead of spending it on the products and services they sell, the truth is that consumers will spend money on what they really want. As their income increases, they will remain loyal to the brand they care about.
Marina Filippelli is the CEO of Orci.
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