Now that its merger with Society Corp. has been consummated, Keycorp is renewing efforts to market its successful retirement savings plans.
The Prism 401(k) retirement plan, developed by Society, is now being marketed to Keycorp's greatly expanded customer base. Such plans enable corporate employees to shelter a portion of salary from taxes by earmarking it for retirement.
According to Keycorp officials, business is booming thanks to the bank's expanded distribution network and the growing brand name recognition of the Prism product line.
Keycorp, which has $63.4 billion in assets, has 1,300 branches in 23 states.
Getting a Leg Up
"If there's a way to get a leg up in the investment products arena, then we make sure to do it," said Robert H. Cooley, executive vice president in charge of investment management and trust services department.
Society had been marketing the product to companies with some success, signing up 290 in Ohio, Michigan and the Midwest, according to Mr. Cooley.
The bank carved out a niche for itself by being one of the only banks in the area to offer a 401 (k) plan that had daily valuation, a process whereby the value of a company's retirement portfolio is calculated on a daily basis.
This makes it easier for customers and their employees to track or change their investments.
"Daily 401(k) is a fairly new product, and Society was already an old hand at it," said Timothy J. Connors, senior vice president with the investment management and trust services department.
Large Customers Balked
But the new valuation was a hard sell for some of the bank's large corporate customers, many of whom already had in place profit-sharing programs in which they controlled investment decisions and the flow of cash, Mr. Cooley said.
The hesitation by these larger companies showed in the makeup of the bank's clientele.
Fully two-thirds of its corporate customers employ less than 500 people.
Mr. Cooley is not discouraged. "The place we thought we'd get more bang for the buck was the middle market," he said. "But there's a lot of promise among larger companies."
Selling the Product
The bank has more than 40 ' dedicated marketing representatives out selling the product. So far, Prism has garnered about 300 clients with more than 125,000 individuals signed up since the merger took place in March.
Mr. Connors is hopeful that another six accounts will come aboard in the next few months and boost the $2 billion the bank now has under management.
Keycorp is betting on its expertise in money management, built on years in the trust business, and an expanded distribution network to give Keycorp the upper hand.
The bank has also revamped its marketing material to include snazzy brochures and informational folders for both corporate clients and customers.
The material is emblazoned with the Prism logo, a moniker that was purposely designed not to be too closely identified with either of the merged banks.
"We wanted something that could compete with anyone out there," Mr. Cooley said. He added that a nationally, recognized plan would be more marketable than a retirement plan too closely associated with a regional bank.
Branch managers are getting a crash course in 401 (k) plans, and Mr. Connors hopes that the added education will bear fruit in the form of new clients culled from community businesses.
"Prism now has broader appeal to smaller scale players," said Mr. Connors.
"We do have success in that market but we think we can have more."
The merger left the new company with several strong community bank franchises, Mr. Connors said, and it's through these branches, that Keycorp hopes to gather more smaller businesses into its 401(k) network.