Workplace Banking

Banks have been quick to heed this call for more service, greater convenience and lower cost through a service called "Workplace Banking," which gives convenient access to and helps companies understand depository, credit and investment options that are available to their employees. Under the Workplace Banking mantle, financial services are tailored to meet the needs of the company employees, and benefits are derived due to the volume of the participants.

Workplace Banking begins with recognition that it is a value-added service to a bank's larger commercial client. The bank determines eligibility when a client has at least 50 employees and meets certain requirements for this service. This focus establishes a target market that ensures the financial viability of service, thereby resulting in cost savings that are passed along to the employee.

The bank has designed a package of services that has a broad cross-section appeal and includes a core group of financial services such as a depository account, a credit card, a credit facility (subject to the usual credit guidelines) and direct deposit. The cost savings related to mass provision of these basic financial services generates significant cost savings for the employees. In fact, most of the services provided in the package are free (the ubiquitous "free checking"), priced at a discount (a 1/4 percent reduction in the rate of interest charged on consumer loans) or have recurring fees waived (the annual charge on the credit card).

Bankers have begrudgingly come to terms with the fact that making a deposit at a branch is on the lower rung of exciting social interactions for certain customers. This is especially true for families where both spouses are employed outside the home. Direct deposit is a service designed for this type of customer and, in fact, often is the item that entices the employee to enroll in Workplace Banking.

Direct deposit is a service that automatically places the net wages of an employee directly in a bank account of his or her choice. The employee can access cash from that account that very day at one of the bank's area locations. The result is the employee is relieved of the specter of rushing to the bank at lunchtime or late Friday afternoon to deposit a payroll check. Avoiding inconveniences saves time for the employee and, as they say, time is money.

However, the underlying objective is to expand beyond the core package of services by providing the employee other needed services. Generally, this objective is communicated when the core package of services is reviewed with the company's director of human resources (or office manager) and a representative from the bank. The contact at the company has a keener insight into the needs of the employees than a representative from the bank might have. For example, on-line banking may be an appropriate extension to the basic package if the company has an employee populace that is skilled in the use of personal computers. This also demonstrates why a company that is considering workplace banking service should examine the range of services provided by the financial institution and compare it to the needs and desires of the workforce.

One of the distinguishing benefits of Workplace Banking is its convenience - the bank going to the employee. Not surprisingly, the service is introduced to these potential new customers at one or more meetings that are held at the workplace of the employer. The meetings generally are held at a time convenient to the employee and employer.

The key item is the ability to commit the additional time to review other needs that the employee may have, which is the basis for providing excellent service in banking. For example, the absence of a company-sponsored retirement plan presents an opportunity for the employee to review with the representative banker the advantages of developing an investment strategy that features long-term capital appreciation. This requires that the representative of the bank have a working knowledge of both traditional and Roth IRAs as well as the ability to implement the strategy. Some banks are equipped with investment counselors and private bankers with the ability to match an employee's investment goals with specific mutual funds or other investment alternatives can be accomplished right on the spot.

In sum, Workplace Banking has all the characteristics that appeal to today's not-enough-time-to-get-things-done employee who is seeking good value at a reasonable cost. Maybe this sounds somewhat familiar to what you are hearing from your employees?

Mark F. Rhein is senior vice president, Private Banking Division of SunTrust Bank, Southwest Florida.