In an effort to strengthen its ties to the growing Hispanic market and advance its image as a leader among companies marketing themselves to minority customers, Bank One Corp. on Tuesday announced a far-reaching alliance with the U.S. Hispanic Chamber of Commerce.

Bank One is one of a handful of financial companies considered to be leaders in a trend broadly referred to as "ethnic marketing" - the targeting of specific communities instead of or in addition to geographic markets - as a path to growth.

Such programs are not to be confused with efforts required by the Community Reinvestment Act. Rather, they show the lengths to which banks and other companies are willing to go in striving to capture business among the emerging affluent and to buy loyalty among customers with the potential for wealth.

The Hispanic business community has caught the eye of bankers in recent years in large part due to its rapid growth. According to the Small Business Administration, the number of Hispanic-owned businesses increased 82% from 1992 to 1997, and annual revenues produced by these businesses grew 152%.

Though reaching out to particular ethnic groups is a relatively new phenomenon for large financial companies, the number doing so is growing. Twenty-eight percent of companies contacted for a recent survey by Datamonitor Corp. of New York said they have specific ethnic campaigns in place, and almost all said the efforts are less than 10 years old.

Justin Megson, a spokesman for Datamonitor, said that in addition to growing in numbers, ethnic communities are drawing bankers in because they are becoming more affluent. He said Bank One, along with Bank of America Corp. and Allstate Corp., are the three financial companies that tend to do the best at reaching minority customers.

"Those companies do the best job at segmenting, trying to identify the needs of individual customers within a group," he said. "Many banks just run a blanket ad in Spanish to reach Hispanic customers."

A spokesman for the $633 billion-asset Bank of America said that the company has separate agencies tailoring advertising toward African-American, Hispanic, and Asian-American customers. The company also has 240 Chinese-language automated teller machines in California to help it serve that market segment.

Terms of the Bank One partnership, dubbed "Alianza: Gateway to Capital," call for the $260 billion-asset company to commit $5 million to a venture capital fund and to offer a new affinity rewards program for Hispanic business customers. The banking company also is to issue a Hispanic Chamber-branded credit card, and it has agreed to become a lead sponsor for the chamber's monthly television program, "Hispanic Television Today."

"We have forged a partnership whose mission is to open the doors of opportunity to the Hispanic community," said Jeffrey P. Gaia, president of business banking at Bank One. "We are making history here today with this program."

Effective immediately, Hispanic chamber members can earn credits on balances held on Bank One credit cards, deposit accounts, and loans. The credits will be applied towards events such as educational seminars held at local chamber affiliates. The venture capital fund, which organizers say will be the first national fund to exclusively target Hispanic-owned businesses, hopes to have $75 million to disperse within 12 months.

Though the move does not necessarily create geographic expansion for Bank One, it could help the company establish itself as the bank of choice among Hispanic customers. And that could be even more important than new territory in terms of profitability, industry experts said.

"By going after a niche market, they have a decent chance at getting a very good share of that market," said Kenneth H. Thomas, a professor and banking consultant based in Miami. "Right now, there is no major bank that has come to be known as the preferred bank for Hispanics. If Bank One could become that bank, it would be very significant for them."

Other companies have also formed affiliations with ethnic-based groups similar to Bank One's partnership with the Hispanic Chamber. Bank of America, for example, in 1999 committed $20 million to the Hispanic group National Council of LaRaza to help fund affordable housing, start-up businesses, and other community improvements.

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