By JASON BOOTH
The new BankAmerica Corp., after strategizing in the wake of its $62.5 billion merger agreement with NationsBank, has identified Los Angeles as its most important market nationwide. As a result, it plans to aggressively expand market share here by going after small-business and ethnic-minority customers.
“L.A. is creating the 21st century economy, which is very entrepreneurial, is driven by small- and mid-size businesses and has tremendous ethnic diversity,” said Liam E. McGee, the bank’s newly appointed president of Southern California banking. “It will be the largest and most profitable market for the company.”
A large part of the expansion effort will be to increase the number of L.A. bank employees who are both fluent in foreign languages and are comfortable in other cultures.
“There is a tremendous amount of wealth creation going on in non-Caucasian communities in Los Angeles. That’s our business and we have to learn to do a better job serving these people,” McGee said in an interview last week. “Most banks traditionally have not viewed markets from a multi-ethnic perspective. If you look at the population trends in this area alone, that may be misguided. We have to understand where our future customers come from.”
McGee also said the new BankAmerica will try to get minority customers to move beyond merely holding checking and saving accounts to using the bank to secure home mortgages, credit cards and make investments.
He disputed the assertion made by some civic activists that to reach minority communities, you have to have a large branch presence.
“You can’t just stereotype one class of people and say that they want to do business in one way. Virtually every population group uses the telephones, the ATMs, just as much as any other,” he said. “Yes, you have to have people on the ground, but you also have to invest in the technology. Every person, whether they are rich or poor, has the same time pressures as you and I.”
John Bryant, president of Operation Hope Inc., a non-profit community banking organization based in South Central Los Angeles, acknowledged that BankAmerica has a larger branch presence in minority neighborhoods than other commercial banks. But he expressed concern that the bank’s focus on technology would backfire when it comes to serving minorities.
“You can’t be high-tech and low-touch in the inner city,” Bryant said. “Black and brown people are not traditional customers. We need someone to talk to.”
The new BankAmerica is not expected to compete against the growing number of high-priced check-cashing shops that have sprung up in L.A.’s poorer neighborhoods and which have replaced traditional bank branches. In fact, McGee said the check-cashing industry may be getting a bad rap.
“There are some customers who may never want to do business with a bank and are completely comfortable going to a check casher,” he said. “It may be completely presumptuous for you or I to assume that they should be at a bank.”
BankAmerica will give particular attention to emphasizing its technological strengths to small-business owners in Los Angeles, McGee said.
“You are going to see more investment in the technology that customers are going to want to use in the future,” he said. While branches will continue to play a role, McGee said, small-business owners increasingly prefer the 24-hour convenience of doing business through online services, ATMs and over the telephone.
Part of that effort will be for BankAmerica to integrate itself into NationsBank’s information delivery system, which McGee said is superior to anything BofA currently offers.
The system, already in place for most of NationsBank’s customers, allows bank employees to access a customer’s entire banking profile checking and savings accounts, business loans, credit-card accounts, mortgage histories, investment portfolios, etc. at a single computer terminal.
John Getzelman, chairman of Pasadena-based Community Bank, said BankAmerica’s new mission to target L.A.’s small and mid-sized businesses is a concern, but the giant bank’s emphasis on technology means there will always be room for smaller, relationship-oriented banks.
“We always get nervous. When the big banks decide to employ their resources toward a target market, they are inevitably going to make a disruption,” Getzelman said. “But the more money you put into technology the less money gets put into people. By that strategy, you inevitably lose a portion of your small-business customers who require more personalized service.”