Banco Popular, the $37 billion-asset holding company based in Hato Rey, Puerto Rico, has been rebranding in the U.S., shifting its image from that of a Hispanic bank to a community bank that serves everyone. At the same time, it's digitizing its U.S. presence to better serve its existing smartphone-savvy audience and to compete with large banks in its metropolitan markets.
The bank came to the U.S. 50 years ago and has operations in New York, Los Angeles, Illinois and Florida. "The original strategy here was to establish ourselves as the preferred financial provider for Hispanics in the U.S.," says Manuel Chinea, senior vice president, U.S. Retail Banking. "Over the years, as we grew, we ended up with a diverse customer base; about 50% of our customers are not Hispanic. We realized some time ago that our business strategy was better served by being the best community bank we could be in our markets and not trying to limit ourselves to just the Hispanic market."
Chinea acknowledges there were hurdles to overcome. "If you're not Hispanic and you see a branch that says Banco Popular, your assumption is that they must be going after Hispanics," he says. "We spent tremendous amounts of time, energy and money trying to overcome that and to let people know that the name might be Banco Popular, but we're here for the entire community and we're a full service bank, we have all products and services of a regular bank and welcome everybody with open arms."
In 2010, the bank decided to test an Americanized version of its name, Popular Community Bank, in its least risky market, Illinois. The bank has the fewest branches in this region, so it required less investment to change the signage and branches. Illinois also had the highest percentage of non-Hispanics within the bank's footprint. It made the changeover in August 2010 and watched carefully for signs of backlash from the Hispanic community. "We were happy to validate that it was a nonevent for customers, the change was well received by the Hispanic community," Chinea says.
The first day of the new name, Chinea visited a branch in the most Hispanic part of Chicago and started talking to a couple of customers in Spanish. "I asked one of them, what do you think about the name change? He said, 'What name change?'" The customer hadn't noticed the new signs. He had noticed and appreciated the new uniforms the branch staff were wearing. "I think the critical thing for [Hispanic customers] was they walked into the branch and saw the same familiar faces," Chinea says. "If they want us to support and serve them in Spanish, we do."
The bank set goals for growing its non-Hispanic customer base and was pleased with the results. "It doesn't happen overnight — you're not going to have a bunch of non-Hispanics lining up outside the door just because you change your name," Chinea notes. "It takes time to build. We've been advertising on radio, we've done billboards, we've been doing print ads."
Banco Popular repeated the process in its California and Florida markets in August 2011, with even better results, Chinea says. "That gave us the green light to go forward with rebranding our very last market, which is New York," he says. It's currently doing prep work to make the change in New York in June.
In parallel with the rebranding, the bank has made over its digital channels. In 2010 it upgraded its online banking platform, then began working on mobile banking, which it launched in November 2011. This month, it rolled out mobile check deposit for its iPhone and Android mobile banking apps.
"For us, digital plays an extremely important role," Chinea says. "We want to open the doors and attract a segment of the population that wasn't considering us before. We are in large metropolitan markets where we compete with the largest banks. To be a viable option for customers to consider as an alternative to Chase, Citi, and so forth, you need to have the same type of convenience they provide. We're investing a lot in mobile, we see it as a tremendously important platform going forward, and we're committed to continue to invest in that platform. A bank our size can not out-R&D a large bank in terms of mobile technology, but we're committed to being early adopters to mobile technology enhancements, and we are quick to follow whatever the big banks might be doing."
The bank has several items on its product roadmap for the rest of 2012. Later this quarter it plans to roll out a mobile banking app for business customers. In the second quarter, it plans to allow standalone enrollment, such that a customer wouldn't need to be an online banking user to use mobile banking. "Because of our high concentration of Hispanic customers, that tends to be more of a challenge," he says. In the overall population, 80% of households have internet access; in the Hispanic demographic about 62% have internet access. However, the penetration of smartphones within Hispanic households is greater than that of the general market. Over 50% of Hispanic households have smartphone access and use the smartphone as a way to surf the internet. "We have a population of customers that would like to use mobile banking, but because they don't have access to internet banking, they can't right now take advantage of mobile," Chinea says. "We're working with our tech partner [FIS] to create the ability for customers to enroll directly through the mobile phone on mobile banking and not need to have a computer at home or at work."
Banco Popular is also working on a tablet app that it hopes to launch in the third quarter of this year. Other features to come include person-to-person payments and security enhancements.