For years, most of the nation's banks have provided their business customers with exclusive perks for their employees: everything from free checking to fee waivers at automated teller machines to discounts on mortgages and insurance.
But in September, Comerica Bank started marketing those same perks for employees at businesses that are not yet commercial customers of the Dallas-based bank. "As a business bank, it's a natural for us," said Cassandra McKinney, Comerica's senior vice president of retail product and sales management.
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.
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 that 7 percent of its 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.
Employers like workplace banking programs because they're a way to offer additional employee benefits at no extra cost. Nine months ago Children's Memorial Hospital in Chicago partnered with U.S. Bancorp, which took over its cashiering function, opened a small branch and offered employees packages of checking accounts, low-cost loans, and more. "Anything we can offer to our employees that isn't part of the standard pay package, we absolutely want to do," said Paula Noble, the hospital's chief financial officer.
Of the country's top 50 banks, 82 percent 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.
There are plenty of reasons for banks' inertia. Credit unions are a big one: Having grown organically with many big employers, they often enjoy airtight relationships. Another barrier is the centralized management models of large banks. For that reason, small and mid-size banks often have more success, Reider said.
But there are certainly ways for big banks to overcome that handicap. Starting two years ago, Key began tapping dedicated relationship managers for each of its 21 districts. As a result, the amount of workplace banking business in some districts has doubled, said DeAngelis.
Business also seems there for the taking for banks willing to put branches into workplaces. U.S. Bancorp opened its first workplace branch a dozen years ago, with Procter & Gamble, in Cincinnati, and has recently been adding about 10 a year. It now has a total of 45 such branches, and sees no dropoff in demand, said Dan Hoke, the division manager for U.S. Bancorp's on-site banking.
Workplace banking's perks do cost banks a bit of revenue. Comerica's recent push had an especially high price tag because it involved cash rewards to both employees and the company each time a new account was opened.
But McKinney and others argue that workplace banking can be a cheaper way to win new customers than traditional marketing initiatives-even if cash incentives are involved.
"We certainly think we'll get it back and then some," she said. "Otherwise we wouldn't be doing it."