Bath Savings Institution, Bath, Maine
Bath Savings, a mutual savings bank, offered a new eSafe transaction account and its existing Basic Savings account at its locations in coastal Maine. Not all of the institution's savings customers are transaction account customers, so Bath Savings marketed its new eSafe transaction account to existing savings account customers. This cross-selling opportunity was a way for the bank to broaden its product offerings and provide increased value to its customers. The bank opened eSafe Accounts as second chance accounts for unbanked consumers and as first transaction accounts for college students in the area. The bank trained its employees to identify a variety of opportunities to promote eSafe Accounts across customer market segments; personalized marketing was found to be a particularly effective strategy. Bath Savings staff was trained to identify a variety of opportunities to promote these accounts across customer market segments. Direct contact marketing through customer service representatives was a more personal and effective approach than using marketing materials.
Citibank, New York, New York
Citibank offered pilot savings accounts in several New York City branches in Upper Manhattan and Queens in partnership with Grameen America, an organization that provides affordable micro-loans to low-income entrepreneurs to enable them to start or expand small businesses and establish formal credit histories. All of the accounts were for women, most of whom are self-employed and living in New York's underserved neighborhoods. The Citibank accounts - which feature enhanced electronic access, debit cards, no minimum balance and minimal or no fees - enable Grameen members to build assets and gain access to mainstream financial services such as debit cards and ATM networks. The partnership relies on a structured program in which micro-loan borrowers are encouraged to make regular, small savings deposits, with savings goals that are as low as $2 per week so as to be achievable by even very-low-income individuals. Citibank and Grameen America have teamed up to provide education and other assistance to new customers learning how to manage financial products. The program requires an investment in partnership and program development but can help develop longer-term, scalable and profitable relationships. Citibank believes that partnerships like this enable unbanked people to transition into mainstream banking while building financial capability and asset building.
Cross County Savings Bank, Middle Village, New York
Cross County offered pilot transaction and savings accounts in all of its branches in New York City, including some in underserved areas. During the pilot, Cross County celebrated an important milestone: a new branch opening in the Bronx in a Banking Development District, an area the city identified as being underserved by financial institutions. Cross County focused its efforts and resources on promoting the new branch and its product offerings, and worked with local nonprofit groups and government officials to help establish a presence in the community. The bank also emphasized in-branch marketing, making sure that staff in all branches were fully trained on how and when to offer pilot Safe Accounts. Cross County realizes that it takes time to make inroads into new markets and to increase product and name recognition, especially among consumers who may not be accustomed to dealing with financial institutions. Cross County remains committed to offering safe transaction and savings accounts to benefit the residents and neighborhoods they serve.
First State Bank, Union City, Tennessee
First State Bank was active in opening both transaction and savings accounts and found a niche market in new entrants to the banking system. First State's pilot accountholders generally had not experienced banking problems in the past but rather had never had a banking account or banking relationship before. Recognizing the difficulty of marketing to an audience that might be more familiar and comfortable with alternative financial service competitors, the bank chose to use collaborative outreach strategies instead of broad, traditional marketing activities. First State worked with key community partners to identify and reach out successfully to new entrants to the banking system. While the bank worked with several nonprofit organizations, one of its most successful endeavors was a business partnership with temporary employment agencies. The agencies promoted the safe transaction account at orientations for new employees, who were required to have a bank account to accept direct deposit of payroll checks. First State plans to continue similar business partnerships, and is committed to finding ways to compete with local alternative financial service providers.
ING DIRECT, Wilmington, Deleware
ING DIRECT's participation in the pilot allowed the institution to explore the feasibility of using the Internet delivery channel, in conjunction with email and direct mail marketing, to open savings accounts for underserved populations in targeted markets across the country. Because the bank's savings account product requires customers to have an existing transaction account with a depository institution, it had a unique focus on customers with unrealized potential. For the pilot, ING DIRECT focused on the Orange Savings Account, their flagship product (which is consistent with the Template). In its effort to engage underserved consumers, the bank strove to demonstrate how and why its savings product could provide important benefits. ING DIRECT's marketing emphasized that customers needed only $1 to open an account, and that accounts had no minimum balance requirement. As a result of the pilot, ING DIRECT reports that they have learned important lessons about reaching out to the underserved market while offering a product that can be beneficial to different market segments.
Liberty Bank and Trust Company, New Orleans, Louisiana
Liberty Bank and Trust Company offered its new E-Cash transaction and savings accounts to consumers in the greater New Orleans area. The bank partnered with two local trade schools to provide accounts, financial education, and direct deposit for students. Liberty also offered the Safe Accounts to consumers as second chance accounts. Notably, the bank felt that their E-Cash accounts were a way to provide consumers with a deposit account and not have to turn them away. Liberty's tellers offered Safe Accounts to many applicants that did not qualify for a traditional account. The bank found that the Safe Accounts performed better than its traditional accounts and was pleased with the higher account retention rates and relatively low overdraft rates. Liberty attributes this success to the motivation of its customers. In the bank's experience, second chance customers are particularly motivated to have successful banking relationships because they do not want to be shut out of the banking system again.
Pinnacle Bank, Lincoln, Nebraska
Pinnacle offered Safe Deposit transaction and savings accounts in its offices across Nebraska, Kansas, and Missouri. The bank instituted an electronic training program for branch staff that was quite effective. Pinnacle's new accounts representatives understand the Safe Deposit account products and are able to identify potential customers that may benefit from access to these accounts, including consumers that had experienced difficulty managing bank accounts in the past. Pinnacle is committed to reaching underserved consumers in its market area and believes that these new customers may eventually transition to more traditional deposit products, providing the bank with new cross-selling opportunities in products like auto loans. Even without these opportunities, Pinnacle believes that these accounts are viable and sustainable. Moreover, Pinnacle believes that offering Safe Deposit transaction and savings accounts has allowed the bank to develop relationships with customers who they otherwise might have turned away.
South Central Bank, Glasgow, Kentucky
South Central Bank offered new transaction and savings accounts at its branches in Kentucky. To reach underserved consumers, the bank used a grassroots marketing campaign through community partnerships. South Central believed that partnerships with local community organizations, schools, nonprofit groups, and local government agencies would be the most effective and respectful way to connect with underserved consumers, with the added benefit of not requiring a large budget for a one-year pilot project. The bank received substantial interest from its potential partners early in the project, which led to early success for the bank in the form of new customers. South Central also learned that it needed to continue to engage with its partners to maintain momentum for the accounts and believed that their partners would have benefited from quarterly meetings to keep up enthusiasm and interest. Nonetheless, South Central believes that the market segments reached by this pilot represent an opportunity for the bank to expand its customer base while meeting the needs of the community.
Webster Five Cents Savings Bank, Webster, Massachusetts
Webster Five offered its card-based First Step Checking Accounts and Passbook Savings Accounts as part of the pilot and will continue to offer both accounts in the future. The transaction account was a new product for the bank, and the savings account is a staple product that the bank offers in electronic and traditional passbook forms. Webster Five opened most of its First Step Checking Accounts as second chance accounts for consumers who have had difficulty managing accounts in the past. The bank also opened several transaction accounts for young adults who may have been new to the banking system and who did not want or need checks. These consumers used ATMs and point-of-sale terminals for most of their transactions. While some of these young consumers signed up for Webster Five's online banking, few used the bill payment services, likely preferring to pay bills with their debit card or with money orders offered at the bank. Webster Five believes that the functionality and affordability of these accounts are important for reaching consumers.