Mexico City - With buzz-building ads, low-cost services and even home visits, Mexican banks are spending millions of dollars to get wary consumers accustomed to parking their money for savings or retirement. Dutch bank ING (ING.AS) in recent weeks joined Citigroup (C.N) in plastering Mexico City billboards and bus stops with hundreds of advertisements coaxing consumers to go online to check out new savings and retirement accounts. Meanwhile, the Mexican offshoot of Wal-Mart Stores Inc (WMT.N) says it will soon expand its small but growing bare-bones bank to offer all-purpose credit cards so that customers will make the mega-retailer their bank of choice. "We're beginning with some very basic services like savings and checking accounts to create a bit of pickup," Wal-Mart de Mexico (WALMEXV.MX) Chief Executive Scot Rank told reporters recently. "Our own Walmart credit card will be launched in a massive way from March." In a country where a quarter of workers earn their living in the informal economy and millions live in desperate poverty, saving money is a luxury for many Mexicans. And before they can build customer trust, banks must erase suspicion about profiteering and the memory of past financial crisis. "They took our dollars and changed them to another currency. The peso was worthless," said Virgilio Morales, a jeweler, recalling the 1982 bank nationalization that was reversed in the early '90s. "They stole from the little vendors, the little businessmen. We can't put money there." BUILDING FAITH BEFORE SAVINGS Half of Mexicans have little or no faith in finance firms according to a recent government survey - a number that has climbed during the recent global financial crisis. Another challenge is that roughly 40 percent of Mexicans believe 'long-term savings' means planning for the next one to five years, said Lourdes Arana, head of ING wealth management in Mexico. "The awareness about savings in Mexico simply does not exist," she said, calling the Latin American country a "virgin market" worthy of big up-front investments. Banks here are willing to fund big marketing efforts with hopes that they can convince Mexicans to simply open a savings account and lift that rate to something above the 25 percent today. ING, which runs Mexico's third-largest private pension fund, is hoping to corral new customers into pensions while Citi's new online service Blink! lets clients transfer cash, pay bills and buy stock from a personal computer. Both campaigns take a step away from the traditional brick and mortar financial services since neither will operate branches and ING plans to reach clients with an army of 2,000 investment advisers making house calls. Only a fraction of Mexicans have regular access to the Internet so that gateway will likely only be appealing to middle class Mexicans while Blink! requires a minimum balance that is likely to draw consumers who already have a savings history. Citi executives say the Blink! account, which integrates links to Facebook, Twitter and music downloads, is a long-term strategy meant to attract young, upwardly mobile clients and show them the benefits of investing in mutual funds or even stocks. Wal-Mart, though, is aiming for the much larger market of millions of middle and lower class Mexicans who shop for bargains and pass through their doors each day. "Many times our (shoppers) have not had access to banking services at a reasonable price," said Rank. "Little by little, we are going to be offering more." Mexico's financial industry is mostly in the hands of foreign banks like BBVA (BBVA.MC), Santander (SAN.MC) and Scotiabank (BNS.TO) that have handed out millions of credit cards to new clients over the past decade but have also been blamed for gouging clients with costly fees. In February, lawmakers approved a proposal to let the central bank curb hefty credit card interest rates and fees. (Additional reporting by Cyntia Barrera; Editing by Andrea Ricci)
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