By Walt Albro
During a time of limited growth, the ethnic demographic is the only one that offers revenue enhancement opportunities. Here’s how one regional bank, BB&T, developed a comprehensive effort to pursue the multicultural market.
The current demographic reality in the United States is as follows: The birthrate among non-Latino whites has declined, and, since the start of the Great Recession, net immigration has dropped to near zero.
These trends suggest that a major source of population growth is now represented by persons of African, Asian and Latino heritage, groups that are still expanding in size and that currently comprise about a third of the nation—and represent 50 percent of the children entering public schools.
In the past, these groups were sometimes overlooked because they had a high proportion of unbanked or underbanked members. Today, these same groups represent potentially huge opportunities for financial institutions.
An example of a regional bank that has energetically positioned itself to take advantage of the emerging multicultural market is BB&T (assets: $187 billion), Winston-Salem, N.C. The bank, founded in 1872, has 1,842 locations (as of January 2015) in 12 southeastern and Mid-Atlantic states plus the District of Columbia.
About a dozen years ago, the bank became aware of the growing diversity of its market area. In Forsyth County, N.C., where BB&T’s headquarters is located, the bank observed that children in the public schools spoke 93 languages.
It learned also that if it were not for the growth of ethnic populations in the southeastern United States, the overall population in this region would have declined.
Division for multicultural markets
Realizing that it would be wise to earnestly pursue the ethnic market, the bank in 2002 created a multicultural markets division and in 2011 appointed Luis G. Lobo, executive vice president, as its manager. Lobo himself is an immigrant, from Costa Rica, who came to this country with his parents in the mid-1960s. “I know the drive and desire immigrants have to improve their lives in the U.S.,” he says.
The division’s first task was to gather information about the immigrant community. It learned that they shared some common characteristics: They distrusted financial institutions, had difficulty integrating into the national fabric and tended to depend on check-cashing services, money remitters and payday lenders because they are unbanked or underbanked. On the other hand, the immigrant population also included entrepreneurs and professionals.
The division initially concentrated on the expanding Hispanic-Latino community by opening Hispanic banking centers that offered marketing materials in Spanish. From the beginning, BB&T was determined to do more than simply provide bilingual banking services. “Our goal has always been to help individuals and families achieve economic success and financial security,” Lobo says. “We seek to truly understand the needs of recent immigrants and their U.S.-born children.”
Outreach was designed to teach immigrants not only the basics of financial services but also the importance of parental involvement in the schools and traditional civic duties. A key effort involved the creation of a series of 12 audio CDs presented in the form of a Latin soap opera (known as a “novella”). The “BiBi” tapes, named after the protagonist in the series and presented in both English and Spanish, were made available in the Hispanic banking centers and also distributed to the community at large.
Over time, the bank expanded its multicultural focus to include all the densely populated Hispanic, African and Asian communities in its markets. “It soon became evident BB&T needed more native-speaking associates to address communication and cultural differences,” says Lobo. The multicultural markets team was formalized and developed regional strategies, closely coordinated with BB&T’s community banking regions, to better engage and serve the multicultural communities.
BB&T also opened non-traditional mini-branches that offered compact lobbies, native-speaking staffs and relevant marketing materials. These financial centers could quickly be opened in shopping centers and areas convenient to ethnic communities. Later, this became the genesis for the bank’s Vecino (Spanish for “neighbor”) branch concept, which is the present-day branding approach for the bank’s multicultural banking centers.
Lobo says the bank’s approach has been to get to know its multicultural customers in order to serve them better. “It’s all about the relationship, which is very different from a transactional-type service model. We believe our emphasis on human engagement, aided by media, marketing, language, and culturally relevant support, has allowed BB&T to consistently earn some of the highest client satisfaction scores in the industry.”
Hiring more Spanish-speaking associates, evaluated through a third-party language assessment, has given the bank not just linguistic skills but also cultural relevancy, Lobo says. “All other attributes being equal, we also make a concerted effort to ensure that new hires have specific foreign language skills. It has been interesting to observe the high engagement level of these associates, which is reflected in their delivery of our client sales and service process. Our staffing model is our most competitive advantage.”
Marketing at work, church and school
The bank has made an effort to engage its multicultural customers not only in its banking centers but also where they work, worship and learn:
Where they work: “A large percentage of our new retail households are reached through building business relationships with their employers. We provide exclusive benefits for the employees with the products and services provided through our BB&T@Work program. At the place of business, BB&T@Work sales officers make presentations, conduct benefit sessions and provide financial knowledge to these prospects.”
Where they worship: “Taking financial education to members of the faith community, notably houses of worship that bank with BB&T, creates another opportunity to meet potential multicultural clients. With an approach that offers basic financial literacy, it opens a door for our associates to be more visible and build relationships with members of the various congregations.”
Where they learn: “This includes public schools, community colleges, historically black colleges and universities, and traditional colleges and universities. We’re focused on having an ongoing presence at these institutions rather than only showing up on campus at the start of the year.”
In general, the bank believes that to reach out to multicultural customers, the financial centers should operate as classrooms where the bank customers and members of the communities can learn how to better manage their money and make better financial decisions.
“When individuals make wiser financial decisions, they are more likely to achieve their life goals. I believe that is how we in the banking business will also reach our goals,” Lobo adds.
Walt Albro is the editor of ABA Bank Marketing and Sales magazine, Washington, D.C. Email: Walbro@aba.com.