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Banks tap into social causes to lure customers
By Shelia Watson
Contributing Writer
No so long ago, the incentives banks used to gain customers were simple: The customer let the bank hold his money, and he was given back interest. And a toaster.
Then the banks went through a period of sharing the wealth, and the toasters advanced to Blackberries, DVD players and iPods, especially for wealthier customers who were letting the bank hold large sums of their money.
Today the focus is less on expensive gadgets and more on altruism, and the sharing of wealth has gone beyond the bank-customer relationship to include the needy and the environment.
This is the thinking behind many of the incentive programs offered by banks today, including the “My Cause” promotion by SunTrust.
“Giving back to the community has always been an important part of our business,” said Mark Lattanzio, market president and community banking manager for SunTrust. “We believe that if you build your community, you build your bank. We do a lot of giving back with the arts and education, so we figured that while we were giving back to the community anyway, why not find a way to let our clients give back too.”
The promotion offers clients who open a new checking account the choice to have SunTrust give $100 to their favorite charitable organization or to receive a $50 gift certificate for their own cause.
Lattanzio said the promotion has been well received, so much that, although scheduled to run Aug. 6 through Oct. 12, it has been extended through the end of the year.
“We’ve had some of our client base open additional accounts just to be able to donate to nonprofits,” he said. “We’ve also had a lot of nonprofit organizations get behind this. They’ll point their donor base to SunTrust and say, ‘Hey, if you’re so inclined, you can open an account here and direct $100 to us.’”
The promotion has turned out to be good for business. Lattanzio said the bank’s accounts went up by about 50% since the promotion started. In the Charleston area alone, the amount donated to nonprofits by the end of the promotion will total about $100,000 to $150,000, with about $15 million collected throughout the entire SunTrust corporate system.
Most banks have taken on a giving-back or save-the-planet mindset with various
promotions. For instance, First Federal’s Fall 2007 newsletter informs its customers about a check for $10,000 and a $60,000 pledge to the Lowcountry Food Bank as well as $2.4 million in construction and permanent financing it has made available to an affordable housing development in Mount Pleasant.
Most banks in the area have accounts where individuals may donate money to the families of the firefighters who died in the Sofa Super Store blaze this summer, with the banks offering matching funds in some cases.
For some financial institutions, the efforts are not promotional in nature but rather are ongoing. South Carolina Federal Credit Union is one such institution that has several ongoing efforts to benefit the underprivileged in the community.
“Credit unions are established to serve the needs of underserved people in communities,” said Beth Jaskiewicz, South Carolina Federal’s senior vice president of marketing. “We’re doing several things to benefit our communities, focusing on social responsibility.”
For example, Jaskiewicz said, the credit union was instrumental in fundraising efforts for The Children’s Network, going out to schools and providing more than 670,000 identification kits to help fight child abductions.
One current promotion South Carolina Federal is involved in is International Credit Union
week, the third week in October, during which the credit union’s members may select one of the Trident United Way agencies to receive a donation of $1,000.
Jaskiewicz said the credit union is looking into various other “green” incentives, including special opportunities for loans to purchase hybrid cars or make environmentally friendly home improvements.
“Helping out in this way fits our philosophy,” she said.
Other financial institutions are operating in similar fashion, making social causes and a concern for the environment part of their philosophy.
• Wachovia is rolling out “green branches” in California, which will offer loans for environmentally friendly businesses.
• Heritage Trust Federal Credit Union recently promoted a “Go Green” sweepstakes that offered a chance to win a hybrid vehicle by signing up for online bill pay.
• HSBC is spending $90 million on a global environmental efficiency program to reduce the bank’s environmental impact. That program comes on the heels of its $100 million partnership to fund climate research through the Climate Group, Earthwatch Institute and the Smithsonian Tropical Research Institute.
• Citi is investing $50 billion over the next 10 years to address global climate change through investments that will support the commercialization and growth of alternative energy and clean technology in the markets it serves.
• Bank of America has launched a $20 billion initiative to support the growth of environmentally sustainable business activity. For its consumer customers, the bank has plans to launch new products, including an “eco-friendly” credit card with a rewards program for donating to organizations that invest in greenhouse gas reductions, a green mortgage program and an environmental home equity program.
Many in the banking industry believe the trend toward green investing and eco-friendly products is likely to continue for some time.
“People like to feel that they’re making a difference and helping keep alive the causes that
can make a difference,” said Lattanzio.
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