Canadian Imperial Bank of Commerce, which has been glomming on to other companies brands to offer consumer banking services, has embarked on a similar approach for the small-business market.
Last week in Canada it opened banking kiosks in 11 stores of the Business Depot office supply chain, which is owned by Staples Inc. of Framingham, Mass.
The kiosks, which offer banking products to small businesses at lower rates than the bank normally charges, carry a new brand name: bizSmart. Only a disclosure form indicates that Toronto-based Canadian Imperial supplies the products.
Piggybacking on the brands of popular companies has helped the bank gain traction in the United States, where its own name is largely unknown, as well as in Canada, where it competes with Royal Bank of Canada and other banks with broad recognition.
Canadian Imperial is doing brand-name piggybacking through its Amicus Federal Savings Bank in Cicero, Ill. This month Amicus opened 25 electronic banking pavilions to promote its products in Safeway Inc. grocery stores, using the grocers Select moniker.
Amicus, which has $31.5 million of assets, also runs Marketplace Bank with Winn-Dixie Stores Inc., Yahoo PayDirect with Yahoo Inc., and in Canada Presidents Choice Financial with Loblaw Companies Ltd.
Amicus has 203 pavilions in grocery stores and has attracted 420,000 electronic banking customers about 17,000 a month. It expects to open 570 grocery store kiosks by October 2001, giving it access to 55 million potential customers, the company says.
Canadian Imperial executives say bizSmart and Amicus can help it reduce the costs of marketing and creating brand awareness.
By bringing together leading brand names to create bizSmart, we can save our members time and money, said Robert Paterson, president and chief executive officer of bizSmart, who formerly headed small-business banking at Canadian Imperial.
bizSmarts products are cheaper than those offered directly through Canadian Imperial, he said. They include no-fee transaction accounts, free access to all of the banks automated teller machines, up to 4.5% interest rates on savings accounts, and no-fee lending with decisions in five to 10 seconds for loans up to $100,000. Next month it will add a no-fee Visa card.
We use new cost-effective technology, and we have less overhead by using the business centers as opposed to branches, Mr. Paterson said. We are passing the savings on to the customers.
Though most banks will not lend to businesses under two years old, bizSmart approves loans for businesses that are only a year old, Mr. Paterson said.
Each Business Depot kiosk will be open six days a week, staffed with two employees. The bank plans to open more kiosks across Canada.
The Canadian banks strategy of selling to different target markets by offering its products under a variety of brands may be an effective way of expanding, said Robert Passikoff, president of the New York brand-consulting firm, Brand Inc.
For the company to go into disparate areas, he said, it is easier to establish a new brand than to take a more established one in one category and try to extend that brand in another category, Mr. Passikoff said.
