ABA Banking Journal - September 2007 - (Page 38)
COVER STORY KEYBANK continued from page 30 check holds present a challenge to lowincome wage earners who live paycheck to paycheck. Some prefer check cashers, he’s learned, because they consider it more private, at least from someone in their life. In all KeyBank Plus markets, Key has found usage strongest when the head of the household is 45 or younger. (John Templer, CEO of Valid Systems, says about 60% of the customers of the instituAMALGAMATED BANK continued from page 32 tions using his service are between 18-29.) “We would love to transition as many of these customers as we can to checking and savings accounts,” says Griffin, “and, hopefully, to credit products.” However, the bank has come to realize that some customers will remain content with cashing checks and buying money orders. In the meantime, Key continues to look for ways to expand this effort with the unbanked. Griffin is pushing for a reloadable debit card onto which check cashing customers could have their funds placed, if they chose. The bank has also been experimenting with a standalone ATM that cashes checks, a remittance program, and utility bill payment. “What we’re trying to do is to look at what people are doing at check cashers,” says Griffin. In other words, the bank is continuing to give people what they want. BJ deposited in their business or personal accounts. A personal debit card brings $25, for instance, a CD, another $25. A consumer can get up to $150 this way, he says. The offer is built around free checking with free ATM access and free online banking. Still, the fledgling branch has its work cut out for it. “Many people are extremely intimidated by banks, because no one in their family has ever had a relationship with a bank,” says Mosbacher. Josh André, vice-president and branch manager, says “We’re not getting the neighborhood traffic yet.” The outreach to the community is important not only because many people have never dealt with a bank, but also from a practical standpoint. Some people that André and his staff met in their forARVEST BANK continued from page 36 ays say they didn’t even know the new branch had opened. The neighborhood near the bridge is, in places, a maze of offramps and exits and approaches to the big bridge. Some streets, including the one where the branch is located, cater more to vehicles than pedestrians, and many residents don’t have cars. The branch’s immediate neighborhood is somewhat industrial, and lacks stores that would bring customary foot traffic. The branch is also seeking business accounts, says André, and “we’re getting a few.” There are other, trickier barriers to breach, as well. André says trust must be built. Some people hesitate to open accounts, he says, because they fear that the government may attach their funds for things such as child support payments. André says these attitudes take time to overcome, and meanwhile he and his staff walk the neighborhood, meeting with people and distributing literature. The branch maintains long hours—8:306:00 weekdays, 8:30-1:00 on Saturdays. Hopeful possibilities The potential for business bodes well, in time. A state study of activities in 12 bank development district branches conducted in 2005 found an average of $6 million in loans and 920 account openings among the group for the previous 12-month period. Mosbacher says that thanks to the state program benefits at this point, Amalgamated estimates the branch will become profitable in its second year. The prospects look promising enough that Amalgamated in July applied to the state for establishment of another development district in Brooklyn. BJ that their needs, circumstances, and dialects can be very different. “You have to sing to each group’s particular tune,” Ocasio says. “The subcultures can be as different as rap and rock and roll.” Salvadorans and Mexicans, for instance, don’t mix well, says Ocasio, and an innocent word in one dialect can be a vulgarity in another. Ocasio warns bankers to avoid automated translation programs, which can produce highly embarrassing results. Where it all began “The greatest need for the Hispanic market is building credit and deposits,” says Ocasio, and the education needed to accomplish the first steps is something Arvest pioneered. The effort began in the 1990s in Rogers, Ark. Chicken processors and other industries were bringing many Hispanic workers to the area, many from Mexico. “We elected, as a bank, to study and understand this new market,” says Brothers, who is president and CEO of Arvest Bank, Rogers. The most effective strategy turned out to be holding seminars at the plants. Arvest’s contribution was its staff’s expertise, training the immigrant workers in the basics of the American banking. There were obstacles to overcome. The plant owners were won over by the prospect of building a labor force that was more stable. Up until then, the pattern was to work for a number of months and then go home for a while. Learning the system helped get the workers to put down roots. The bank’s efforts weren’t always popular in town. “I fielded a lot of telephone calls from folks who said, ‘If you’re serving these folks, we’re finding a new bank’,” says Roberts. But he saw this as a matter of “corporate stewardship,” in his words, and pressed on. Today, 25% of Rogers’ residents are Latinos, and about the same percentage of the bank’s workforce is also Latino. The bank found it was more effective to train Hispanic workers in banking than to train bankers to speak Spanish. “The other banks were happy to see us take all the arrows,” Roberts says, but who could afford to say they are not going to serve 25% of the market?” “Today,” says Roberts, “we enjoy the largest share of the local Latino market.” BJ 38 SEPTEMBER 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html
If you would like to try to load the digital publication without using Flash Player detection, please click here.