BOULDER CITY, Nev.–The value to and opportunity in serving the “rainbow market” can not only be seen in the hard data, but in the softer payoffs as well, according to an executive with Visa.
Speaking to the CU Pride Leadership Event as part of Pride Month, Jorge Esteban, VP-community and financial institutions-Southeast with Visa, said there are “powerful beliefs that connect and bind us together, and one of those powerful beliefs that I firmly believe in is that commerce can be a force for good when it's done right.”
In addressing the virtual event, Esteban broke his remarks out into three themes.
Theme I: Why Visa Is Making the Investment
Inside Visa, Esteban said the Pride employee resource group (ERG) is the second-largest inside the company.
The Pride ERG, said Esteban, is in business to advance and develop diverse talent, to engage the LGBTQ+ community, and to drive financial inclusion within Visa.
“They do this in a number of ways including working across our partners, who together help us to mentor young LGBTQ+ talent to drive success among LGBTQ+ fintech and to support charitable organizations,” said Esteban.
All of that plus actions taken by Visa itself are in support of a “core belief that inclusion uplifts.”
Theme II: A Personal Journey
The second part of Esteban’s message focused on his own journey.
“Something I think about and bring to work every day at Visa is this kind of lens of intersectionality,” said Esteban. “I grew up in Miami the child of Cuban immigrants and I'm also a credit union baby. My grandparents and parents got their start in this country because a credit union in Little Havana in Miami that could look past the limitations of the circumstances of a recent arrival, and instead see visible the possibilities of a fresh start. As young person credit unions were how I was introduced to financial services. My first account (resulted from) my wrapping nickels with my grandfather.
“In college, it was the credit union shared branch next door that in a way kept me fed and clothed and definitely within my own budget, and the fact that my parents could do continue to bail me out in a potential emergency kept my mother from going gray.”
What all that means to and older and wiser Jorge Esteban, he said, is a broad perspective that includes the “richness and the hardship and the beauty of all of these experiences. Latino. Immigrant. Cuban. Gay. Those experiences in the (southeastern) region in particular may seem sort of like oil and vinegar, but if there's one thing that cuts across the region it's intersectionality. It's demonstrated by the vast and multiple identities and experiences you see in that part of the country, as well as the big differences between access and resources.”
Keeping Intersectionality Top of Mind
Saying he was seeking to arm his audience with guidance to help them keep intersectionality in a business environment top of mind, Esteban told the CU Pride meeting:
- The Southeastern U.S., particularly Georgia, Florida and North Carolina, is the “cultural center” of the LGBTQ+ community in the United States. Moreover, he noted up to 60% of the country's Black population lives in the southeast and 85% of the country's historically black colleges and universities are in the region, as are the largest Latinx and Hispanic populations.
- More small businesses are located in the southeast than in any other part of the country.
- The Southeast is also home to some of the largest challenges and opportunities, with one-in-five youth in the justice system identifying as LGBTQ+. Overall, Esteban said, “it’s a great example of how in a business context intersectionality shows up.”
Theme III: The Business Case
Part III of Esteban’s story involved building out the business case for greater inclusion.
“What I've heard most from leaders in credit unions is not about tax status or NSF, it's been about one word: relevancy,” he said. “So, we already have a problem statement here: how can a credit union remain and grow relevance. I would argue there's a classic way out of this business problem and those two paths are to either find and develop new products solutions and experiences, and/or to find and develop new markets.
“Credit unions have been at the forefront of these types of problems historically. Developing products and finding underserved markets is in the DNA of credit unions.”
Esteban said approximately 4%-16% of the U.S. population identifies as LGBTQ+, depending on the source of information. That population represents about $1.1 trillion of purchasing power, again, depending on the source, he said. There are also about 1.4 million LGBTQ+-owned businesses in the United States representing $1.7 trillion in revenue and purchasing power.
Strong Market Needs
But it’s also a market with strong need for financial services and direction, according to Esteban, who said:
- 53% don't maintain regular savings.
- The average LGBTQ+ Millennial is 66% less likely to have savings than the average American. “We need budgeting. Forty-percent of Americans don't have an emergency savings plan, 60% of LGBTQ+ folks don't.”
- “We need lending. “Same sex couples are denied mortgages more often and when we do get mortgages we pay higher interest rates, closing costs and fees.”
- “We also need alternative lending. The largest transaction in the life of a queer person may not be necessarily their home purchase; it might be adoption or surrogacy, immigration or citizenship expenses, or transition.”
“If you put these all together, these aren't unusual needs, they are again in the DNA of credit unions and the communities and foundations that your organizations already support,” said Esteban.
The Generational Opportunity
There is another big reason to reach out to the LGBTQ+ market, according to Esteban.
“If you look at Gen Z they're shaping up to be the most racially, ethnically, sexually diverse generation in history,” he told the meeting, referring to the 70-million member Generation Z.
“Most compelling is the ripple effect. Gen Z makes decisions much differently,” Esteban stated. “Previous generations made purchasing decisions as an act of rebellion. Equity and inclusion, even when they themselves are not members of that specific group or identity (are important to this generation). “When they're looking at companies and brands they're most interested in, it’s those that celebrate their own style and express their version of individuality. So, for brands that means that mass marketing does not work
“Gen Z values individuality and personalization and the ripple effect is that social consciousness is one of their values and drivers behind purchasing decisions,” Esteban continued. “When you support the LGBTQ+ market, when you build services and solutions and market to this underserved market, it has a ripple effect to this bigger and broader market overall, and that's a winning strategy for driving relevance within a large, growing market.”
The Business Case
The business case for serving the LGBTQ+ market is obvious, according to Esteban.
“The challenge most often quoted by senior leadership is relevancy; that's a classic business problem,” he said. “Finding and developing new markets is one way to rise up to that challenge. The LGBTQ+ market is big and is underserved. They have specific needs within financial services and there are positive ripple effects beyond the confines of that market. A McKinsey study in 2019 and again in 2020 showed higher return assets and return a net income among organizations that included this type of thinking within their goals, compared to organizations that did not.”