Banks seeking to appeal to new clients have historically provided issues like toasters or free checks.
Now Bank of America Corp. is reporting traction with its provide to waive the $20,000 minimum-balance requirement for entry to its Preferred Rewards Gold Tier for workers who enroll in its Employee Banking & Investing program.
Bank of America
BAC,
mentioned it has gotten about $10.5 billion in new deposits and investments from first-time and present clients in this system, which it launched in 2020.
The program supplies workers at corporations in Bank of America’s present corporate-client community with financial-education and investing providers, together with the advantages of its Preferred Rewards Gold Tier, which embody credit-card bonuses, interest-rate boosters and different perks.
Employees additionally get entry to “Better Money Habits,” the financial institution’s online-resources and reside seminar collection geared toward boosting monetary data.
Bank of America mentioned about 450 company and business shoppers have enrolled in EBI, greater than double the quantity from two years in the past. The program is on tempo to develop to 500 shoppers by the center of the 12 months.
The financial institution now has 1.7 million accounts amongst workers within the EBI program, together with new and present Bank of America clients.
In return for offering the incentives, Bank of America good points new clients and the chance to cross-sell money-management merchandise and financial savings plans for faculty or retirement.
“Clients have a lot of different financial needs, and once they’re exposed to the bank and its programs … people tend to bring more business to the bank,” Aron Levine, president of most popular banking at Bank of America, advised MarketWatch. “They may use a credit card or take out a mortgage, or open a Merrill Lynch account.”
Brian Mulberry, shopper portfolio supervisor at Zacks Investment Management, mentioned the EBI program suits in with Bank of America’s strategic development efforts over the following two to a few years.
“Once captured as retail bank clients, the ability to offer other services and products is a driver of growth in revenues, which is critical in such a highly competitive sector,” Mulberry mentioned.
The financial institution’s deposits and mortgage balances have remained “solid” over the previous a number of years regardless of a difficult working setting, he mentioned.
The financial institution’s client unit is by far its largest enterprise unit, representing 36.9% of whole belongings on its stability sheet, whereas wealth administration represents 12.1% of belongings, Mulberry mentioned.
Bank of America’s Levine mentioned the EBI program sprang from the concept of utilizing its client financial institution to deal with considerations expressed by business clients about their workers’ money-management expertise.
“Our bankers are always looking for ideas to deepen relationships,” Levine mentioned. “Financial wellness and employee benefits are often talked about.”
Wendy Stewart, president of worldwide business banking, mentioned the financial institution had been listening to considerations for almost a decade from its business shoppers in regards to the monetary well-being of their workers.
“When they have an employee who is not thriving in one or more areas, they’re not going to be as productive,” Steward mentioned. “We said, ‘We can help you on the financial piece.’ We can provide banking, lending and investing advice for employees and bring it to them so they get economic benefits, and we bring them financial advice and all kinds of understanding on how to leverage our offerings.”
Bank of America’s 2023 Workplace Benefits Report discovered that 96% of employers mentioned they really feel chargeable for their workers’ monetary wellness. At the identical time, solely about 40% of employers provide financial-wellness packages.
Companies providing the packages will “stand out as employers of choice,” in keeping with Lorna Sabbia, the financial institution’s head of retirement and private wealth options, with greater worker retention and satisfaction charges and decrease stress.
Bank of America mentioned about 20% of the 4 million workers with entry to the EBI program are utilizing it, and the quantity continues to develop.
Also learn: ‘The small, regional bank business model is unalterably broken,’ says Oppenheimer analyst after New York Community Bancorp inventory swoon
Source web site: www.marketwatch.com
