Asian-American banks are turning to old-fashioned relationship-building to attract new customers and keep from losing old ones — and in the process offering a lesson to Main Street bankers everywhere about meeting similar challenges.

The Asian-American banks are competing with bigger banks to hold on to their customer bases, said Ken Siegman, senior director for the consulting firm West Monroe Partners.

They are “finding in second- and third-generation members of families, it’s not as important to them to have branch walk-in that is serviced and spoken in their native language … as it was for their parents,” Siegman said. “And so the banks are all seeing a lot of difficulty both in attracting as well as retaining a younger clientele.”

Part of the problem has been their failure to sufficiently invest in digital and customer-engagement technology, Siegman said. People in their 30s and 40s have decided “these banks don’t meet their needs,” he said.

Alan Thian, chairman and CEO of the Los Angeles-based Royal Business Bank, agreed with Siegman’s premise and said that younger customers will use other avenues for banking that aren’t your typical branch, like online and mobile services.

“Of course a small niche bank will not be able to invest in all this high-tech infrastructure as the big bank does,” he said.

But it is hard to outspend bigger banks on technology, so Asian-American bankers are trying other things, such as working with local professional groups to gain a foothold with younger customers.

Thian said the $1.4 billion-asset Royal is also focused on new immigrants, which it sees as its priority.

Joanne Kim, president and CEO of the $922 million-asset Commonwealth Business Bank in Los Angeles, said that her bank works with a number of minorities, including Persians, Pakistanis, Syrians and Chinese customers, and emphasizes personal service with all customers.

“We may not be able to retain younger generations who are so used to doing everything instantly with their fingertips — yes, that’s true,” she said. “But in terms of [the] business side, we still believe that face-to-face meeting has value to it. When they wanted to talk about serious businesses, instead of tweeting or texting, they wanted to sit down with us and go through it.”

At the same time, the bank is being prodded by its regulators to keep up with developments in fintech. Kim said she is open to partnering with fintech companies — something that some other banks have already done — but also said smaller banks struggle with investing in tech because of the cost.

“We have … limited resources in people and in money,” she said. “We have an open mind in that regard.”

Like Royal, Commonwealth is relying on networking within the community through sponsoring programs that seniors in high school or college students participate in to attract the younger customer base.

“We just keep letting them know our presence so that they hear our story more and more,” Kim said. “That surely leads them to come back to us when they need banking. It’s a lonesome strategy. … I want to believe that whatever investment we are making to the younger generation in their activities or their career path … we could get return from that investment by having them working with a community bank in our community.”

Kim also added that the bank knows younger customers are going to big banks but said she isn’t worried about it “because there are still other business opportunities here” such as first-generation immigrants.

Aaron James Deer, a managing director for Sandler O’Neill, said that has always been hard for banks to retain second-generation customers.

“They are doing a better job with that through technology and insuring that their capabilities are consistent with the mainstream banks, but I think more importantly is that … these institutions are getting more creative in how they think about their niches and looking at them more broadly,” he said.

The $13.4 billion-asset Hope Bancorp in Los Angeles has emphasized on previous earnings calls that it is trying to diversify outside of its traditional customer base.

CEO Kevin Sung Kim said on an earnings call last year that the bank’s Houston operation has “been very effective in attracting non-Korean customers and building a truly multiethnic customer base.”

“This is a model that we would like to replicate in other markets as we build awareness for the Bank of Hope brand as a good banking partner for all retail customers as well as small and middle-market businesses regardless of cultural background,” Kim said on an earnings call last year.

Bank of Hope officials did not comment for this story.

Alex Cappello, chairman and CEO of the M&A firm Cappello Global LLC, said he thinks that a newer generation moving away from their culture’s native banks is normal.

“It’s a natural evolution … for any group and just over time there will be greater assimilation and blending,” he said.

But at the same time, these institutions have all been making technological advances, he said.

“They should not be underestimated,” Cappello said.

Some banks insist they are seeing less disruption than others. Noor Menai, president and CEO of CTBC Bank in Los Angeles, said that younger people are loyal to and trusting of the people who helped their parents.

“There is an impetus to be loyal to ethnic banks,” he said. “We have never experienced a sudden dearth of customers for our products only because of that … intergenerational effect.”

There is a concern that customers leave to pursue better tech offerings, but even then the $5 billion-asset CTBC isn’t “sitting idly by,” Menai said. Smaller banks “have the ability to keep changing” whereas big banks, because of the money they have invested, can get stuck with old technology.

CTBC established a checking account that is geared toward nonprofits, companies and business owners who do not regularly carry large balances. Menai also said the bank is redoing its website and mobile app.

“You’ll see a series of things coming out from us,” he said.

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