For bankers whose New Year's resolution is to target customers more precisely, technology is providing them tools for identifying prospects and serving them with more finely tuned offerings.
In many cases, bankers and vendors say, financial companies have missed opportunities with high-potential but underbanked groups such as Hispanic immigrants, or the companies have allowed markets such as retirement accounts to slip away to competitors.
But reaching these narrow customer groups may require bankers to employ new approaches in areas as diverse as product mix, branch design, and market analysis.
For instance, Banuestra Financial Corp. of Roswell, Ga., targets the Hispanic market, largely immigrants, both through its 12 Atlanta-area branches (under a charter agreement with People's Bank of Winder, a unit of People's Holding Co. of Winder) and by offering proprietary check-decisioning and consulting services to other banks.
Luz Urrutia, Banuestra's president and chief operating officer, said it divides its target market into six customer groups, from newly arrived to fully acculturated.
The immigrant market especially remains largely untapped, Ms. Urrutia said. "Even settled workers, with a paycheck and a W-2, are still buying all their financial services from check cashers."
Bankers usually lead with demand deposit accounts, especially with customers whose employers can use direct deposit, but that does not work with immigrants, she said. "We need to look at other services to establish entry points with this customer."
Banuestra seeks new customers by focusing on check cashing and remittances, offering what Ms. Urrutia called a "combo meal" that can lead to broader services.
"We start by making them a member," she said. Banuestra has applied for 17,000 tax identification numbers on behalf of immigrant customers who do not qualify for a Social Security card, and 99% of the applications have been granted.
After that, Banuestra will provide the customer with a identification card for future transactions, Ms. Urrutia said.
Banuestra keeps track of customers' useage of prepaid cards, remittances, rental histories, and other assets, which "enables us to build an internal credit score for that customer so we can lend them money," she said.
Banks also can work with alternative credit bureaus such as Pay Rent Build Credit Inc. of Annapolis, Md., or the Center for Financial Services Innovation, an affiliate of Chicago's ShoreBank Corp., to assess the creditworthiness of prospects who may have no conventional credit history or only a thin one.
Michelle E. Scales, the director of diverse growth segments at Wells Fargo & Co., said it is working with the center to expand its reach the underbanked community. "You're going to see a lot of focus by us and other industry players" on extending credit to underserved customers.
Such a strategy is important to Wells Fargo, because 50% of the Los Angeles area's population, for instance, is Hispanic, Ms. Scales said in a presentation last month at the Bank Administration Institute's Retail Delivery conference.
"Sixty stores in L.A. are tailored to reflect that community," not only with Spanish-language promotional materials, but also with color schemes and artwork that reflect Latino culture, she said.
The San Francisco company has strategies to target not only Latino prospects, but also Asian-Americans, African-Americans, women business owners, and even the gay-lesbian-bisexual-transsexual market, Ms. Scales said.
This does not mean Wells has an open-ended commitment to reach out in every direction, she said. "There has to be a business case you have to justify your decisions. This makes us make choices."
Robert B. Hedges Jr., the managing partner of the Boston consulting firm Mercatus LLC, said that segmentation strategies can vary widely, and not only by ethnicity, and that bankers sometimes overlook opportunities by defining their markets in ways that exclude the customers they should be seeking.
For example, Mercatus conducted research for the BAI on retirement assets, and it defines the retirement market as beginning with 35-year-olds, who have accumulated enough assets in their employer-sponsored 401(k) accounts to meet its definition of "mass affluent" — people with $50,000 to $2 million of investable assets. (The study was sponsored by five large banking companies.)
A business that bankers "were a dominant player in has gotten away, because they didn't have the right products," Mr. Hedges said, losing business to mutual funds and brokerages because of "marketing myopia and not using technology right."
Computerized tools can help bankers analyze the challenges and opportunities in their markets. MapInfo Corp. of Troy, N.Y., provides geographic matching of demographic and marketing factors for bankers, while BancIntelligence Corp., an Atlanta provider of analytical tools and strategy consulting services, lets bankers benchmark themselves against competitors by profitability, asset size, geography, or other factors.
Steve Cotton, the president and chief executive of BancIntelligence, which Fiserv Inc. acquired in October, said community banks need to focus on market niches.
"When you niche-focus, you limit the number of competitors you bump heads with," he said.
"Every market is different. Any institution of any size is going to have a lot of different opportunities in its markets," Mr. Cotton said. "Even if you are in a low-growth market, there are higher-growth niches you can pursue."
