In an effort to drum up business among Latinos, Pan American Bank is trying its luck with gimmicks like fortune tellers and macarena contests.
The start-up-the city's only Latino-owned bank-says its marketing efforts are helping build recognition among a population that relies chiefly on check-cashers for their financial needs.
"It's fun," said Ernest Ojeda, Pan American's chairman and founder. "This has helped immensely in letting people know who we are and what we've done."
The promotions directly brought in about 75 new accounts apiece, but officials say the attendant publicity attracted additional business. Pan American's efforts demonstrate how community banks are using marketing techniques to build niches-in this case an ethnic one-in an environment dominated by behemoth financial institutions.
Pan American has plenty of competition in Pilsen, a gritty neighborhood on the city's South Side. Surrounded by check cashers and branches of other banks, the $24.8 million-asset newcomer is trying to set itself apart.
"When you're a small institution and you're trying to get market share, you're more receptive to new ideas," said Kevin Tynan, president of Tynan Marketing Inc., a Chicago-based consulting firm. Mr. Tynan, who has been active in bank marketing for 20 years, has worked with Pan American since last year.
Bank officials said it chose promotions involving the macarena, a popular dance among all age groups, and fortune-telling because both would appeal to Pilsen's predominantly Mexican immigrant population.
The community bank has also used more subtle methods of appealing to this market. For instance, earlier this year it opened a check-cashing window that is available to noncustomers, said chief executive officer Ron Pikus.
"It's a way to get customers familiar with the bank, so you can migrate them over to banking services," he said.
Because many Pilsen residents have never had banking relationships, Pan American mails out a 5,000-circulation newsletter to make people more comfortable with banking, Mr. Pikus said. Issues of the newsletter contain profiles of the employees as well as information about federal deposit insurance.
Pan American spends about $10,000 a month on its marketing efforts, including bilingual advertising, Mr. Pikus said. Though that's a lot for a bank its size, officials regard the investment as necessary to build awareness.
"We're attempting to outreach within the community itself and become part of the fabric," Mr. Ojeda said.
Pan American hopes to be turning a profit by the end of this year, Mr. Pikus said.
Another local ethnic institution, Second Federal Savings and Loan Association of Chicago, has catered to Latinos throughout the city since the 1960s, said CEO Mark Doyle. He said that while other banks have reached out to Latino neighborhoods to meet Community Reinvestment Act requirements, a local institution can be nimbler and more responsive.
"Banks don't always appreciate the fact that this is a market that has value and you can get a return," the executive of the $188 million-asset mutual said. "There's a baby boom going on and people are looking for fridges, stoves, and houses. We've tapped ourselves into that market."
