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Virginia's banks and credit unions could be gathering millions of dollars in additional deposits by reaching out to Hispanic households that lack checking and savings accounts, University of Virginia researchers said.

Almost 39,000 Hispanic households in the state have no accounts with banks or credit unions but generate an average annual income of $23,500 that could flow into the banking system, according to the report by the Darden School of Business' Tayloe Murphy Center.

Some banks and credit unions recognize the prospects for growth from Hispanic households but have been trying to determine "how they can tap this market in a cost-effective way," said Gregory B. Fairchild, the center's executive director and co-author of the report, on Friday.

Some institutions can do it by hiring employees who are bilingual and familiar with the culture of specific Hispanic communities, he said. Some can do it by opening branches closer to Hispanic neighborhoods. In addition, they can capitalize on the availability of banking by smartphone, said Fairchild, who also is an associate professor of business administration at Darden.

Virginia has slightly more than 500,000 Hispanic residents, who account for almost 7 percent of the state's population. Slightly more than 70 percent of Virginia's 139,000 Hispanic households already have a checking or savings account, said Kulwant Rai, the center's research director and co-author of the report.

However, many Hispanics interviewed for the report said they felt uncomfortable dealing with conventional financial institutions, Rai and Fairchild wrote. Hispanics without a checking or savings account typically rely on community-oriented grocery stores for cashing checks, buying money orders and wiring funds to family members outside the country.

By using less costly services at a bank or credit union, these individuals could save money, according to the report, "Lost in Translation: The Opportunity in Financial Services for Latinos." They also could reduce their vulnerability to being robbed because they would no longer be carrying or keeping large amounts of cash on hand. READ MORE