May 1, 2017 | In the Media

Ethnic banks say tech now speaks to customers

Ethnic banks say tech now speaks to customers

L.A.’s Chinese and Korean banks rely on their communities. Second-generation Asian Americans who speak English, while still tied to those communities, don’t need the language-specific services their parents did, and that has local ethnic financial institutions worried.

“As the population of first-generation business owners retire or sell their businesses, we have found that the population of attractive clientele is shrinking,” said Chong Guk Kum, chief executive of Koreatown’s Hanmi Bank. “The Asian ethnic banks have not done a good job of attracting this younger generation.”

Those anxieties have sent local Asian-American banks in search of new strategies to shore up their customer base, targeting a second generation cohort that tends to be more professionally oriented rather than entrepreneurial.

Though there is no way to quantify the shift, anecdotally, bankers are talking about how this new generation of doctors, lawyers, and accountants is replacing shop and restaurant owners – and potentially their banks.

“It is a fundamental shift in customer base,” said Timothy Coffey, vice president of research for consultancy FIG Partners, who’s based in Walnut Creek. “All of them are struggling to find the right approach to dealing with it.”

Ken Siegman, a senior director in the downtown office of business consultancy West Monroe, said many Asian-American retail customers are opting to bank with larger community institutions or big national players such as Wells Fargo & Co. and JPMorgan Chase & Co. because of their desire to have more advanced or developed digital capabilities. 

To read the entire article, please visit the Los Angeles Business Journal web site (subscription required). 

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