While a number of banks, like Los-Angeles-based Nara Bancorp and Wilshire Bancorp, were created to sell predominantly to Korean Americans or Chinese Americans, other banks in other parts of the U.S. have struggled to make the Asian American market a natural fit.
According to recent Census results, nearly 12 million Asian Americans live in the U.S., concentrated in and around New York City, San Francisco and Los Angeles. Yet "Asian American" is an umbrella term that encompasses a diverse group of ethnicities, including Americans of Chinese, Filipino, South Asia, Vietnamese, Korean and Japanese desent As a result, banks are often intimidated by reaching out to what they view as a fragmented group.
With total buying power of more than $400 billion, Asian Americans represent the most affluent minority consumer group in the U.S., according to Packaged Facts, a market-research publisher. With a higher per-capita income than non-Hispanic whites, Asian Americans also trump their Hispanic counterparts with a per-capita income that is 85 percent higher than other minority groups. For example, Asian Americans earn an average of $25,786 compared to $14,007 for other minorities; the group has a median-household income 50 percent higher-$56,161 versus $35,929-than other groups. And Asian-American families make up the largest minority group with incomes of $100,000 and above, says Packaged Facts.
While Hispanics are often been portrayed as the fastest-growing U.S. demographic, the Asian population has been growing almost as fast as Hispanics since 2001. Packaged Facts predicts the Asian-American population will grow 14.7 percent to 14.6 million by 2010.
As a group, U.S. financial services is the No. 1 spender in advertising in the Asian-language media, according to Saul Gitlin, evp of strategic services at Kang & Lee Advertising, a New York advertising firm specializing in this market. "What we're seeing here is a high-growth, high-income market that is willing to spend, yet very conscious about their purchasing decisions," notes Don Montuori, publisher of Packaged Facts. "Asian Americans love to shop and will shop for the best deal. They're big on family, designer items, technology, Internet shopping, and healthy living, and are very open to all modes of promotion, making them an excellent target market."
But that also means Asian-Americans are value-conscious, so banks need to be aware of their competitive status in the community. Mainstream banks like Washington Mutual, Wells Fargo and HSBC have aggressively targeting this demographic for decades, and Gitlin says they aren't afraid to go the extra step to attract this clientele. "The human touch is very important to this group," he says. "And it always makes sense to have a few people per branch that speak the language, whether it be Korean, Mandarin or Vietnamese, a manager who can communicate with the target audience." He urges banks to use native languages for marketing, particularly ads.
And just because an Asian American client has a business loan with an ethnic bank does means he might want his consumer relationship with a mainstream bank. "Because they're so aware of value, they may have multiple banking relationships," Gitlan says. He also urges banks to be willing to over-explain investment products, such as mutual funds, that may not be available in consumers' home countries.
