Provident Bankshares Corp. of Baltimore has started a pilot program to win more business from the Washington area’s growing Hispanic market.
If the program is a success with Hispanics, Provident plans to use it to target other ethnic groups.
“The Korean market could be a possibility in the future,” said Shelley J. Martin, the segment manager of Provident Bank.
James Ballentine, the American Bankers Association’s director of housing and economic development, said, “The basic concept — addressing the financial services needs of a community by employing staff members from the community that the bank is serving — can be moved to any other ethnic group.”
Ms. Martin called this a “key strategy” for Provident. “We see the multicultural model as a way to increase growth in the future.”
The $6.1 billion-asset bank holding company started the initiative in early December. It uses bilingual employees, including all the mortgage lenders.
“We can offer all the products and services to meet the needs of the Hispanic market,” Ms. Martin said.
With the steady influx of Latin American immigrants, Hispanics have become the nation’s largest minority group, topping 40 million. That number is expected to reach 60.4 million by 2020, according to a 2005 study by the Pew Hispanic Center.
A sharp rise in their median income has bolstered Hispanics’ purchasing power and led to an increase in their demand for financial services, a 2004 study by MasterCard International’s TowerGroup found. “Up to 70% of the organic growth for the U.S. financial services market over the next five years could come from the Hispanic market,” the study said.
Bankers are clearly paying attention. Many large, regional, and community banks have stepped up their marketing to Hispanics in recent years, and several new banks catering specifically to them have either opened or are in organization.
Just 13 of Provident’s 152 branches are participating in the pilot, and the bank has no firm plans or timetable for expanding it. Each branch has at least two Spanish-speaking associates, and a phone line to a translator. Provident has also created a mortgage unit with a full-time Spanish-speaking staff, and a remittance program is to be in place by spring.Customers can use a matricula consular, an identification card issued by the Mexican government, as a primary form of ID to open an account. They can also use an individual tax identification number in lieu of a Social Security number when buying certain products.
Martin Yescas, the manager of Provident Bank’s Takoma Park, Md., branch, and a native of Nicaragua, said customers like that he can speak with them in Spanish. “Some have trouble with English, so there is a level of comfort in being able to conduct business in their native language,” he said.
Many Hispanics are suspicious of banks because of bad experiences with the corrupt and unregulated banking systems of certain Latin American countries, Mr. Yescas said. “It’s about the trust factor,” he said. “If you can speak to a customer in their own language, it’s going to open the lines of communication.”
Mr. Ballentine said these efforts will boost Provident earnings in the long term. “While they may see a short-term bump, the real profit is two or three years down the line as the Hispanic market continues to grow,” he said.
Provident is not pouring money into advertising media such as newspapers and television, Ms. Martin said. Instead it is sponsoring events and sending employees like Mr. Yescas into Hispanic neighborhoods to cultivate relationships with business owners.
“We’re getting into the community and talking to people rather than putting up a billboard,” Ms. Martin said.
