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Citibank Puerto Rico, a bridge to Hispanic markets
Local operations serve as launch pad for companys expansion into key Hispanic areas on U.S. mainland
By GEORGIANNE OCASIO TEISSONNIERE
April 14, 2005
There is no question the Hispanic demographic is the coveted target of all U.S. mainland banks. The Census Bureau projects the Hispanic population on the U.S. mainland will grow to 103 million by 2050, more than double the present population of 40 million.
One of the bridges Citibank is using to reach the U.S. Hispanic market is Puerto Rico. The success Citibank has had in Puerto Rico is one of the big reasons behind the approach. Having seen the performance of personal-loan products in Puerto Rico, the company thought it would be a good idea for the Puerto Rico team to implement the same model in the U.S. Hispanic market.
Carlos Dávila, vice president & regional manager of Citibank in Puerto Rico, told CARIBBEAN BUSINESS they are on the verge of launching a unique kind of pilot program in the U.S. market in relation to this product. "One of the pilot programs we are working on is utilizing our methods and strategies to develop the personal loans division for the [U.S.] mainland Hispanic market. The program is expected to launch in New York and California during the month of May," revealed Dávila, who anticipates this will be one of many stateside projects in which Puerto Rico will be involved. Dávila explained the shared platform resulting from Puerto Rico being classified under the North America division allows them to offer clients numerous and unique benefits. Clients can perform the same kind of basic transactions in the U.S. branches as on the island as well as take advantage of the shared platform to facilitate a number of more complex transactions. For example, if a Puerto Rico client wants to buy a second home somewhere in the U.S., many of the processes are simplified and accelerated by the banks presence in both places. The same thing applies to mainland clients who want to purchase a home in Puerto Rico. In this same way, Citibank Puerto Rico also provides a convenient bridge for local businesses to expand to the mainland and conversely for U.S. merchants and companies to bring their products and offerings to the island. Dávila recently attended a Florida conference assembled by the Hispanic Chamber of Commerce, which is actively fostering the business relationship between Florida and the island.
Citibanks expansion tactics in the U.S. Hispanic market also depend in large part on the companys presence in some of the key states with a strong Hispanic population. Rebecca Vargas, vice president & director of Hispanic Markets Retail Banking of America, explained Citibank identified three subdivisions within the markettraditional Hispanics of whom many are unbanked; bicultural Hispanics, who are considered underbanked; and affluent Hispanics, who usually have more sophisticated banking needs.
The company realized there was a need to provide more services for the unbanked population; therefore, Citibank created the Access Account, which is a simple entry account that allowed first-time account users to start building credit for future financial needs. In addition, considering $16 billion a year is sent from the U.S. to Mexico; in 2003, Citibank opened a money remittance service called Citibank Global Transfers to serve this need.
One area Citibank plans to develop further, is the mortgage sector that fits the needs of the U.S. Hispanic market. Considering fewer than 45% of Hispanics in the U.S. own homes, the opportunity for growth is huge. Part of this effort includes a financial educational program sponsored by Citibank to help Hispanics learn more about the opportunities they have, including how to plan for purchasing their first home. In other words, how to achieve the American dream.
This Caribbean Business article appears courtesy of Casiano Communications.