Banks Pursue An Old CU Strength: SEG Marketing

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DALLAS – Those select employee groups (SEGs) credit unions have been so eager to shed have proven popular with another financial services provider: banks.

Case in point: Comerica Bank, which has long offered its employees free checking, fee waivers at ATMs and discounts on mortgages and insurance. Now it has started to offer those same perks for employees at businesses that are not yet commercial customers of the bank. “As a business bank, it’s a natural for us,” Cassandra McKinney, Comerica’s SVP-retail product and sales management, told American Banker, an affiliate of Credit Union Journal.

Comerica’s initiative is noteworthy, experts say: At a time when banks desperately need new customers, Comerica and other banks are getting them by creatively expanding their workplace banking programs.

Workplace banking is a flexible term. It can encompass everything from offering free checking accounts to having actual branches located at workplaces. Often, it includes presentations from bankers about financial planning, mortgages or other timely subjects, American Banker noted.

Whatever their form, workplace banking programs allow banks to reach audiences that they might not have touched otherwise. Given the fee pressure on banks, and their need for new revenue, it’s hard to overstate workplace banking’s potential value, said Dave Martin, an executive vice president at NCBS, a SunTrust Banks Inc. consulting subsidiary.

“The successful players are going to be all about bringing the bank to where the customers are,” he said.

McKinney estimates 7% of NCBS’s consumer checking base derives from its program. What’s more, the programs offer banks more than just checking deposits: Through employee presentations and pay-envelope stuffers, banks can cross-sell a range of products.

KeyCorp’s workplace banking program, for instance, has provided a big boost to its health savings account business, said Robert DeAngelis, head of consumer banking at Key.

Of the country's top 50 banks, 82% offer workplace banking in one form or another, according to Informa Research Services Inc. But experts say too few banks have made workplace banking a priority. Those that “actively promote, market and use it as a significant entrance to customer acquisition” appear outnumbered by those that do not, said Steven Reider, the president of Bancography, a bank consulting firm in Birmingham, Ala.

 

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