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Cultural Currency-The Business Journal

Posted on: April 30, 2004
IN DEPTH: BANKING / FINANCE

From the April 30, 2004 print edition


CULTURAL CURRENCY
As they reach out to immigrant populatons, banks find that language isn't the only barrier
David Forster

A branch manager for one of the nation's largest and richest banks is handing out brochures at a corner grocery to drum up business.

For Lorri Taylor, it's one of the most effective ways to reach the fast-growing multiethnic population of immigrants around the Wells Fargo branch she manages in South Sacramento.

Other Sacramento-area bankers are resorting to similar hands-on, street-level strategies as they adapt their marketing to a region that has rapidly become one of the most diverse in the country.

Language is the most obvious barrier between banks and an immigrant population that represents a huge pool of potential customers. It's not the only barrier, however, and in many ways it's the easiest to overcome.

Bank branches throughout the region are already hiring tellers who speak the languages of the immigrant populations around them, translating forms and brochures, and offering ATM screens in multiple languages.

But it's not enough. Local bankers have found that right behind the language barrier lies a much more challenging obstacle to turning immigrants into customers: mistrust.

Although not spotless, the reputation of banks in the United States is mostly one of stable, reliable institutions, heavily regulated by the government, with deposits backed by the Federal Deposit Insurance Corp. This is not the case in many foreign countries -- where bank failures, scams and scandals are more commonplace -- so many immigrants are wary about banks as safe places to put their money. Also, many immigrants simply have had no dealings with banks, good or bad, and are used to a cash-based existence.

In either case, local bankers often find that in order to do business with immigrants, they first have to earn their trust.

That means getting personal.

Banks are reaching out to churches, community leaders and immigrant-owned businesses -- all people or places of trust. This is why Taylor hands out Wells Fargo brochures at neighborhood groceries. When the store owner agrees to let the brochures be distributed in his shop, it's like putting in a good word for the bank.

Another way to establish trust is to hire people from the immigrant populations.

"They may notice you advertise in their language. They may see you participate in events. But until you have someone they can relate to that speaks their own language, they don't respond; they're not comfortable," said Diane Bacon, Northern California vice president/manager for U.S. Bank Home Mortgage, a division of U.S. Bank.

Several years ago, U.S. Bank hired two Russian-speaking loan officers in the Sacramento area to become the bank's ambassadors into the local Russian population, one of the largest in the United States.

These loan officers, themselves immigrants, conduct homebuying seminars in Russian. The seminars are done for groups, and sometimes one-on-one. U.S. Bank, like many others, offers a home loan tailored to immigrants who have not had the chance to build up credit. Instead of the traditional measures of creditworthiness, the bank evaluates their credit through other means, such as whether they pay their phone, utility and other bills on time.

Crossing a pre-built bridge: While banks work to build their own networks in the immigrant communities, much of their outreach is done by teaming up with organizations that have already opened lines of communication.

A key partner for several local banks is California Capital Financial Development Corp., a Sacramento-based nonprofit that offers a variety of services and "microloans" to immigrants and other ethnic minorities who want to start or expand a business.

Two years ago California Capital launched a series of forums conducted in various languages, each sponsored by a bank. Most of the forums cover similar ground: loans, taxes, insurance, resources, marketing. Speakers often include representatives from the U.S. Small Business Administration, the state Franchise Tax Board, the state Board of Equalization, local ethnic and regional chambers of commerce and other business players.

Beyond the basics, the forums include content tailored to the interests of the particular ethnic group. A recent forum targeting Hispanics, for example, included a presentation by an immigration attorney. Forums for Chinese and Vietnamese audiences may include presentations on health-code enforcement because restaurants and grocery stores are common businesses among these groups. Hmong and Mien forums may include presentations on real estate loans because of the number of farmers in these groups who want to learn how to buy land instead of leasing.

Forums have been offered in Russian, Hmong, Mien, Spanish, Hindi, Cantonese and Vietnamese. Attendance varies, from a handful to more than 100. Sponsoring banks so far include Wells Fargo, Citibank, U.S. Bank and United Commercial Bank.

"We've become a fairly major distribution channel for the banks," said Deborah Lowe Muramoto, director of fund development and marketing for California Capital.

You're on the air: California Capital has spent years developing networks and building trust within the immigrant populations. Muramoto said that the outreach effort varies from one population to another. The local Mien community, for example, is divided into eight groups, each with its group leader. The Mien look to these leaders for direction, so she had to reach out to each one to get the word out about the Mien forum. "If the community leaders tell the rest of the community that this is important, they will attend," she said.

Radio has been a particularly effective medium for outreach because so many immigrants cannot read, Muramoto said. A couple of local radio stations that sell broadcast time feature locally produced programs in Vietnamese, Hmong, Mien, Russian and Hindi. Muramoto and others from California Capital have appeared on several of these programs, and found that radio is a vital link to the world outside of their communities for many immigrants who otherwise lead pretty insular lives. And they're hungry for information.

Muramoto was a guest on a Hmong call-in talk show and said she found it "amazing how responsive the listening audience was. They wanted to know what our interest rates were. 'How do I do a business plan? Who do I call if I want to have someone help me with my taxes?' "

Questions like these are at the heart of California Capital's forums. The forums don't go into much depth on any topic. Instead they give the audience a quick introduction to some of the challenges, opportunities and responsibilities of starting and running a business.

The real purpose, said Clarence Williams, president of the nonprofit, is to give the audience contacts in the government and private sector. Making blind calls to a massive bureaucracy like the Franchise Tax Board can be intimidating enough for anybody, and especially so for someone who doesn't speak English and comes from a country where the government is corrupt, oppressive, dysfunctional or all of the above.

"We're giving them a person to call," Williams said.

Other channels: Banks also turn to the private sector for their outreach. Bank of America, for example, teamed up with local real estate agents to create its series of homebuying seminars, said Rick Maya, president of the Sacramento market for the bank. It has offered them in Russian, Chinese, Vietnamese and Spanish. The seminars are conducted by bank staff who speak the language.

Another common way banks reach immigrants is through their employers. One way to get immigrants set up with checking accounts is to persuade their employers to offer direct deposit of paychecks.

Through its "Bank at Work" program, Citibank goes to businesses and introduces its products and services through lunchtime seminars. Spokeswoman Janice Tarter said the bank has done this locally with large and small businesses, including a landscaping company with a lot of Hispanic employees, and an Asian grocery.

Citibank, like many others, offers no-fee checking accounts to employees set up with direct deposit. Banks have also found other ways to make it easier for immigrants to set up accounts. Many banks, for example, accept Mexico's "matricula consular" card as an alternative proof of identification to a driver's license or Social Security card.

Many U.S. banks also have established partnerships with Mexican banks and other financial institutions that allow immigrants to send money home. The traditional remittance program is a wire transfer of funds to a financial institution in Mexico. Banks say they offer these wire transfers at rates much lower than the competition. Many also have introduced a variation of the traditional wire transfer that allows a person here to deposit money into an account and a person in Mexico to pull money from that account using a debit card at an ATM machine, for a fee.

These remittance programs are often an immigrant's first encounter with a bank, and banks view it as a gateway product.

A common theme in all of these outreach efforts to local immigrant populations is that banks are getting creative and finding ways around some of their traditional strictures when it comes to opening accounts and making loans. Bankers understand they can't cling to the old rules and ignore the rapidly changing demographics of the Sacramento region. Banks hope that penetrating the cultural barrier of mistrust, and building relationships with the first waves of immigrant families, will pay dividends with future generations.

This outreach also often comes with a little more hand-holding than most bank customers have come to expect. For example, the two Russian home-loan officers at U.S. Bank will often attend a sales closing to make sure their customers understand what they are signing.

"This is a long, involved process," said U.S. Bank's Bacon. "It takes education. You have to build confidence through experience."



© 2004 American City Business Journals Inc.