Banking Still Foreign to Russian Immigrants

By Yerasov, Pavel | American Banker, May 31, 1995 | Go to article overview

Banking Still Foreign to Russian Immigrants


Yerasov, Pavel, American Banker


"I simply don't use banks."

That's what most of the estimated 85,000 Russian immigrants living in Brooklyn's Brighton Beach are likely to say when asked about where they bank.

As in other minority communities, the main problem for banks trying to do business here is language.

The fact that Russia began development of a Western-style banking system only about five years ago complicates matters even further.

Even now, most of the people in the former Soviet Union use banks only for making deposits and receiving pensions.

For many of the Russians in Brighton Beach, bank use is restricted to check cashing. In part that's because many of these new immigrants are retired or on welfare.

When they do have extra money, Russian immigrants don't use savings accounts, for fear the banks will notify the government and jeopardize their welfare payments.

Yet things have changed significantly since the late 1970s, when the flow of immigrants to Brighton Beach began to grow from a trickle to a flood.

"When they first came here, they did not understand what a bankbook was, because in Russia they were not allowed to have them," said Esther Soscia, assistant vice president and branch manager at the Dime Savings Bank office on Brighton Beach Avenue, one of two Dime branches in the area.

"People were very reluctant to open an account. They used to come in and they wanted only cash. At that time we even sent 15 of our employees to study Russian banking terminology," Ms. Soscia said.

"We started to show immigrants what a bankbook was and how the neighborhood economy could improve if they started to bank with us.

"At first, they began to make deposits, and now about 75% of Russian customers have savings accounts. Along with deposits, many of them buy U.S. government savings bonds."

Bank branches all over Brighton Beach currently sport signs proclaiming, "We speak Russian." At the Dime Branch on Brighton Beach Avenue, 10 of the 26 employees are fluent in Russian.

Russian immigrants interviewed said they did not see much difference in service between the various banks operating in their community. Those that do use banks are most likely to choose a branch near their home. Some said they did consider transaction charges when they chose their bank, but not many shopped around.

Members of Brooklyn's Russian community also said they were not concerned about the size of the bank they used. In general, Russian immigrants believe, as Alexander Tsvetkov I.D. tk put it, that "American banks do not become bankrupt."

Chase Manhattan Bank has done a good job positioning itself in this difficult banking market. Under an agreement with the New York Association for New Americans, all new immigrants getting financial aid through the organization have Chase checking accounts and ATM cards.

Chase also has Russian-language ATMs in three of New York City's five boroughs and provides product literature written in Russian. …

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