As the nation's fourth-largest bank, San Francisco-based Wells Fargo & Co. (WFC ) concentrates its growth largely in the West and Southwest U.S. One of its fast growing markets is the population of Mexican-Americans and Mexican nationals along the border and in California and other border states. To tap into this group, Wells Fargo is increasingly tailoring its products and marketing to accommodate the economic needs and cultural traditions of this population.
BusinessWeek Correspondent Louise Lee recently spoke with Wells Fargo's Shelley Freeman, regional president overseeing the bank's Los Angeles metropolitan area, which includes Los Angeles, Ventura, and Santa Barbara counties, and parts of San Bernadino County. Edited excerpts follow:
Q: What has been the bank's primary way of reaching out to the Hispanic market?
A:One of Wells's most crucial means to grow in the Hispanic market is our acceptance of the "matricula" card -- a form of identification issued to Mexican nationals by the consulates -- as a valid form of identification to open a checking account. We started accepting the matricula card in November, 2001. Since then, we've opened 250,000 new accounts from people using the card as ID.
And the rate of these account openings is increasing: In the months after November, 2001, we were opening accounts for people using the card at the rate of 3,400 a month. But during the last three months, the rate has jumped to 22,000 a month.
Q: How does Wells adapt its branches to the Hispanic culture?
A:Marketing materials are in English and Spanish. Employees in branches in Hispanic communities are both bilingual and bicultural. We hire from the local area. Branches serving Hispanic neighborhoods have a Latin-style decor and play Spanish-language radio in the background. Because many customers come in with their kids, branches have long benches for the kids to wait on and are stocked with coloring books.
Q: How does the bank get the word out about its services?
A:While we do buy advertising on Spanish language TV and radio, ads aren't always the best way to go, because of the informal communication network in this population. And many unassimilated Hispanics do hesitate to come to our branches. So more than a year ago, we started hosting in-home seminars in the heavily Hispanic community of Pacoima, Calif. It works because many Hispanics feel more comfortable being in a friend's home.
Q: What occurs during an in-home seminar?
A:Typically, one host will invite 15 or so friends, neighbors, or relatives into his home for the event, usually held around dinnertime. Attendees bring food. Someone from the branch talks about topics ranging from saving for the kids' college tuition, to buying a house and establishing good credit, to very basic matters like how to write a check. We're planning similar seminars in South Los Angeles in 2004.
Q: How does Wells adapt products to cater to the Hispanic market?
A:We realized that among many Hispanics, people other than parents or spouses contribute to the total family income. So we consider the income of other family members when we evaluate income. We even look at income from another family. And we also consider cash income, since a lot of these individuals are paid in cash.
Q: What other products are designed for this market?
A:We're unveiling a pilot test in Los Angeles called the Opportunity Checking Account, aimed at people who don't qualify for regular checking accounts. And in 2002, we introduced Intercuenta Express. That service lets account holders send money to their relatives' local accounts in Mexico. It costs a flat fee of $10 to send $1,000 back.
Q: Do efforts to reach out to undocumented Hispanics also benefit Wells's relationships with assimilated Hispanics?
A:Yes. The assimilated population appreciates the bicultural nature of our approach. It's not just about having our marketing materials in Spanish. It's about showing up in the community. The assimilated population cares about the nonassimilated population. Both populations appreciate our approach. Plus, many assimilated Hispanics prefer to get information about our products in Spanish.
Q: How has Wells tried to learn about this community?
A:You learn from talking to people. You learn more from the streets of Pacoima than at a seminar at the Ritz Carlton. Last year, a handful of very top executives, including CEO Richard Kovacevich, traveled to L.A. to meet with the publisher of La Opinion, the big Spanish-language newspaper in L.A. They met with experts on Hispanic politics, demographics, and health and human services. [These experts] immersed us in learning about this community.