The Census Bureau projects that Hispanic population on the U.S. mainland will grow to 103 million by 2050, more than double the present population of 40 million Hispanics. On the contrary, in just half a century, the population of European Americans is expected to decrease by 19%. That might explain why expansion strategies for stateside banks are tightly focused on reaching Hispanics. According to market researcher Simmons Inc., there is an even more attractive factor defining the future of the banking sector around the demographic issue. The researcher estimates 56% of the nation’s Hispanics have never had any kind of bank account. Hispanics’ wealth and population rising three times faster than the U.S. average translates into a whole new universe of business opportunities for the industry. According to research group Economy.com, that new universe is worth $200 billion in new business over the next decade.

This new business isn’t concentrated solely on individuals; the Hispanic-owned firms in the U.S. also are expected to grow 55% to 3.2 million by the year 2010. Total revenue for Hispanic-owned firms will increase by 70% to more than $465 billion in the same period, according to estimates by HispanTelligence.

As early as 2009, Selig Center for Economic Growth at the University of Georgia projects the purchasing power of U.S. Hispanics will reach the trillion-dollar mark because in 2003 purchasing power was already $653 billion larger than Mexico’s Gross Domestic Product. This aggregate income will be spent, saved, and invested, all of which will spur demand for checking accounts, consumer credit, mortgages, and investment services.

Many industry analysts believe more than half of all U.S. retail banking growth will originate from the growing Hispanic market. TowerGroup, a research and advisory firm that focuses on the global financial services industry, estimates up to 70% of the growth for U.S. financial services between 2003 and 2008 could come from the Hispanic market alone.

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