one of the most underutilised distribution channels remains the
workplace. In the US, much further advanced than other markets,
workplace banking is a mainstream distribution channel – and not
just in core product lines such as pensions and life
insurance.
With its Bank@Work service, US giant Citi has one of the more
developed workplace banking programmes. Last year, the number of
such accounts grew 72 percent, according to Citi’s own figures –
one of the fastest-growing areas for the group in what was a
difficult year (see chart below).
Another, similar sounding product is offered by Australia’s ANZ
banking group. Called ANZ@work, the service is a full consumer
banking package available to employees of ANZ’s business
clients.
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Employees can mix and match the products in “any way they like,
when they like”, says ANZ, and benefit from sharply reduced fees
such as no loan approval charges and a first-year credit card fee
waiver.
Customers must open an ANZ Everyday or ANZ Flexiplus account and
have their company salary (at least A$500 ($470) per month)
directly credited into one or more of these accounts.
The dominant starting point
According to the latest survey of workplace banking
and financial services in the US by the insurance group MetLife,
the workplace has become the “dominant starting point for building
a strong financial safety net” with more than half of working
Americans (52 percent) now obtaining the majority of their
financial and retirement products through the workplace, up from 46
percent a year ago.
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By GlobalDataThe MetLife study reported that growing financial concerns among
employees are creating a greater interest in advice and guidance at
the workplace – 44 percent of employees would like access to
general financial planning advice at work, up from 30 percent last
year.
And, it said, more employers are recognising that benefits drive
satisfaction. A majority (58 percent) believe that benefits play a
very important role in employee retention; that percentage climbs
to 65 percent for employers with 500 or more employees.
All of which makes the relative paucity of dedicated retail
financial services packages for business staff across the world all
the more surprising.
Here is an opportunity for banks to access a captive pool of
earners with a range of products and services.
At the moment, the US is by far the most established workplace
banking market. Another US heavyweight, Bank of America, for
instance, offers Bank of America At Work, a comprehensive package
of services and products usually with fee discounts. The bank
markets the product as an opportunity for employees to save up to
$500 a year on “everyday financial solutions”.
US Bank, the country’s sixth-largest retail player, offers what it
calls Workplace Banking, which comes with a line-up of
rate-discounted chequing accounts, loans and card offers.
But it also offers something unique: access to the US Bank online
Shopping Mall and discounts on a range of selected retailers. Visa
card holders can get 15 percent off Lenovo computer products, for
instance, or mobile phone deals with AT&T.
