Banks Use ATMs to Reach Foreign-Language Niches

As part of a retail strategy designed to strengthen their presence in ethnically diverse areas, a growing number of banks are installing ATMs that communicate in languages such as Spanish, Chinese, Italian, Korean, and even Russian.

For a relatively minor investment, bankers have found making an automated teller machine bilingual can increase its transaction volume by as much as 75%. But perhaps more importantly, the software can help bankers establish relationships with fast-growing segments of the American population.

Many Non-English Speakers

According to the most recent data from the U.S. Census Bureau, more than 4 million people - or roughly 2% of the total U.S. population - speak English poorly or not at all. And those numbers are growing, particularly among Hispanic and Asian groups.

"To ignore the fact that people in a lot of areas do not speak English is to ignore the needs of your potential customers, and that's just not good business," said Kenneth B. Herz, a spokesman for Chemical Bank Corp. in New York.

Chemical is not alone in tailoring its retail product to foreign-speaking customers. The lead banking subsidiaries of Chase Manhattan Corp. and Citicorp, New York, BankAmerica Corp., San Francisco, and Meridian Bancorp, Reading, Pa., have all employed the strategy.

Catering to Neighborhoods

Most of these institutions rig only select machines for foreign languages. Chase and Chemical, for instance, have placed teller machines with instructions in Russian in some New York neighborhoods with burgeoning populations of recent Soviet emigres.

The reason for this selectiveness, bank officials said, is because there are typically extra instruction screens on bilingual ATMs that increase the time it takes to complete a transaction. In areas with low concentrations of ethnic residents, speed of product delivery generally takes precedence.

Thus, bilingual ATMs are similar to automated teller machines that dispense postage stamps, movie tickets, and supermarket coupons, in that they are largely a niche product that bankers hope will increase transaction volume and the revenue generated by specific machines.

Bankers emphasized, however, that machines programmed for Spanish, Russian, or Chinese are typically also part of a larger program. "This is a chance for us to say to a specific community, |We are big, but we are not inflexible. We value your business, and we can adapt to deliver the product as required,'" said Jeffrey Gordon, a vice president at Meridian Bancorp.

Rigging an ATM to communicate in a foreign language is fairly simple, Mr. Gordon said. Software can be easily configured to form words that are spelled with English letters, and customized microchips can be used to store specific characters and punctuation marks unique to foreign languages.

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