Do-it-yourself electronic banking might aid the bottom line, but it may also be keeping potential investment products customers out of the bank, experts warn.

Now that the younger generation has been trained to use automatic teller machines, direct deposit, telephone balance inquiries, and other labor-saving devices, there's little reason for them to walk into a bank.

If bank investment departments want to sell them mutual funds and annuities, they've got to find a way to get them back in door, industry executives and consultants say.

Habits Formed

"The banks are doing the best they can to push customers out of the branches," said Paul Patsis, chairman and chief executive officer of Marketing One, a leading third-party marketer of bank investment products based in Portland, Ore.

"The banking industry, through the ATMs and |800' numbers, has given the customer the ability not to come into the bank," said David Nardozzi, director of Marinedge, the investment products division of Marine Midland Bank, Buffalo.

Some industry executives maintain that banks are still not perceived by the younger generation as a place to invest in equities, annuities, and other products more creative than a certificate of deposit.

"There is an apprehension that those are products and skills that banks don't have. And on the whole, banks have done a lot to dispel that," said Reed Reichert, Marketing One's sales chief.

Follow-Up Calls

Marketing One has a follow-up program where a previous customer or person who has been in contact with a bank's investment products department receives a telephone call from a sales representative.

Marketing One also sends fliers to customers who have inquired about investing, notifying them that a salesperson will follow up by phone or in person.

Like most of its rival companies, Marketing One also promotes informational seminars for customers. Such seminars typically focus on investment basics, explaining, for instance, what annuities are or how fixed-income investments work.

The seminars can introduce customers to products or even to the brokerage's sales force in the hopes of turning a sale.

Typical Customer

Most in the industry agree that the typical bank investment-products customer is a longtime depositor, aged 5 to 65. By and large, they are inexperienced investors who look to a bank to provide a sense of security in an unfamiliar area.

Richard B. Ross, president of Investment Marketing Corporation of America in Northfield, Ill., estimates that banks aren't reaching the two-thirds of bank depositors who are younger and better educated.

Mr. Ross sees a clear demarcation between the younger group and the "scared, older" group of people who have not traditionally been investors,

So far, banks have done well selling mostly fixed investments to older customers because they trust banks more than brokerages. But that strategy won't be enough, Mr. Ross said.

A Harder Sell

"The banks have taken the cream off the market," Mr. Ross said. "They have taken the easy customers as interest rates have declined and people looked for higher returns.

But, he added, "the cream is gone, so now they have to look to the rest of the market."

Mr. Ross advises banks to adapt different approaches to different groups, If a bank is doing a seminar for younger people, "it's not based on estate planning. It's based on how you're going to fund your kids' educations," he said.

The way to approach yuppies is to get them interested in a specific offer, he said.

Customized Programs

For example, a direct mail campaign on education funding should include a promise to develop a special program for the individual customer. For the best customers, use a more direct approach over the telephone or in person.

"You can't talk about a hot stock, or investments in general. You have to develop a package. If you come in, I'll give you this, show you this alternative."

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