Banking Trends and the US Latino Population

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Note: We know that language is constantly evolving. We strive to be inclusive, reflecting the varied labels used within the Latino community. As such, the following terms are used across the article, sometimes interchangeably: Hispanic, Latine, Latino, and LatinX. 


In 2021, the United States Latino population reached 62.5 million, which is 19% of our country’s population. Latinos are the largest contributor of growth to the US population. According to the Latino Policy & Politics Institute at UCLA, the Latino population is projected to increase to 28% of the US population by 2060.

Fintech solutions for LatinX population

This key group has unique preferences in personal finance, including the highest adoption of fintech among racial groups (92%) compared to white (74%), Asian American (79%), and Black (88%). Primarily this adoption is motivated by a younger skewing population, barriers to traditional financial services, and a desire to build wealth outside of financial services that traditionally have left many feeling excluded or distrustful.

While this group faces challenges in building wealth, according to the Federal Reserve between 2016 and 2019 median wealth rose faster for Hispanic families than any other, but substantial wealth gaps persist between Hispanic and White families.

As the US recognizes Hispanic Heritage Month, banks should find new ways to serve this growing population beyond marketing campaigns tailored to LatinX and Spanish markets.

Major barriers include language support and security. According to Everfi, 69% of all Hispanic banking is done on mobile or tablet. By offering digital applications tailored to appeal to Latine language and preferences, banks can both better serve their customers and win new ones.

“Fintech applications can allow the Latinx community to engage in personal finance and business banking through a familiar native experience,” said David Robinson, director of fintech partnerships for Armed Forces Bank. “And when one member of a group or family has success with one bank or fintech brand, that trust will be shared across their network.”

What is the best home loan for Latinos?

LatinX also have the largest near mortgage-ready population of any racial or ethnic group according to the National Association of Hispanic Real Estate Professionals. Mortgage-ready includes a variety of factors from FICO to debt-to-income ratio that indicate a borrower can qualify for a home loan. They also trend younger as homeowners often because of a desire to build roots and see their families grow.

Homeownership amongst the Hispanic population grew to 48.6% in 2022, the eighth consecutive year of growth. While the mortgage market is challenging among most groups, Latinos made up nearly 39% of all household formations last year. With a median age of 30, Latinos are young.

However, banks cannot simply bring customers in with Spanish marketing campaigns. They must consider the entire process from application to closing disclosures and tailored to this population.

Nick Alphs, president of residential lending at Armed Forces Bank said, “Serving the Latino population with homeownership opportunities through counseling and ease of transacting has never been more important than today. Building trust, transparency, and understanding by sharing credit education, using bank statements to identify income, and utilizing alternative credit data will ensure that lenders can serve population’s needs well into the future.”

Hispanic Entrepreneurship and Small Businesses

Another critical group that banks and financial institutions should consider are Hispanic investors. Hispanics are 1.5x more likely to start a new business than any other demographic in the US. In fact, the Latino population has a growing entrepreneurial bent. In 2016, more than 4.2 million business were Hispanic owned.  Rising costs of living is the primary reason Latino entrepreneurs want to start businesses. These entrepreneurs are enthusiastically looking for ways to get ahead – build wealth and take charge of their financial future as their own boss.  

If banks want to better serve this market, and capture more customers, they must go beyond small-scale loans and offer a more holistic approach.

“In the ever-evolving landscape of banking, Banks cannot overlook the potential of Hispanic investors,” said Jacob Nemechek, Armed Forces Bank’s senior vice president of business banking. “To truly thrive in this dynamic market, banks must expand their horizons, moving beyond mere transactions to offer comprehensive support. By providing education and entrepreneurial loans, they empower clients with the tools to succeed, simultaneously reducing risk and unlocking a world of potential customers."

In 2022, fewer business sought financing, but Latin owned businesses were 50% more likely to request financing than White-owned businesses. These funds were used to expand businesses, make capital investments and meet operating expenses, according to the State of Latino Entrepreneurship Report from the Stanford Graduate School of Business. These Latino-owned businesses have similar, if not better, business metrics than White-owned business and yet their approval rates are lower for loans over $50,000. Although Latino owned businesses are strengthening the American economy, outpacing revenue and growth rates, they still face challenges in accessing funding that would serve communities and the economy as well as strengthening bank portfolios.

Overall, the LatinX population is a growing opportunity for banks and financial institutions. With a holistic view of the process and people, and a deeper understanding of unique customer needs and preferences, banks can find new ways to serve this population and drive growth across their portfolios in an increasingly challenging market.

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