Banks: Making saving sexy
As the economy slows, battered banks are rethinking their sales pitch.
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| Struggling banks woo a cautious consumer base by promoting savings accounts, CDs and retirement plans. |
(Fortune Magazine) -- Why is it so hard to save money?" asks the narrator of a new Bank of America TV ad. "This is America. We save everything. We saved the bald eagle, the redwoods." Cue images of said eagle, said trees, and also dollar bills and a girl pouring change out of a glass jar. The ad marks a change in the way banks sell themselves. During the recent housing bubble, banks urged their clients to spend, spend, spend - through home-equity loans or other forms of credit. With spending out of fashion today, those same banks are pushing savings accounts, CDs, and retirement plans.
"It's a good short-term idea for business, but it's also a good long-term idea for customers," says Anne Saunders, Bank of America's brand and consumer-marketing director.
Bank of America (BAC, Fortune 500) is not alone. Earlier this year Wachovia, which put its account up for review after eight years with the same agency, started advertising its Way2Save program, which automatically transfers $1 from a checking to a savings account each time a person uses his debit card or pays a bill online. In the commercials, created by Wachovia (WB, Fortune 500)'s old agency, money swirls around a man as he goes about his daily activities. One shot shows him sitting on a park bench; another has him picking up his dry cleaning.
These plugs for saving are also hitting the airwaves at a moment when banks are trying to dust off an image sullied by the credit crisis. Bank failures are no longer an abstract, Depression Era idea in consumers' minds. Even the financial institutions considered too big to fail have reported staggering losses and written off billions of dollars in bad loans.
"There is a very strong shift toward rebuilding trust," says Mich Bergesen, global director for financial services branding at Landor, a division of WPP Group. (Bergesen has worked on campaigns for Citi and AmEx in the past.)
Citigroup, for instance, at the urging of new CEO Vikram Pandit, has brought back "The Citi Never Sleeps" slogan (minus the word "The"). By resurrecting the old tag line, which was used in the '70s and '80s, Citi (C, Fortune 500) is looking to take the spotlight off its recent troubles (including a $2.5 billion loss in the most recent quarter) and bring the focus back to a happier time in the company's history, when it was known more for the ubiquity of its ATMs than for the toxicity of its SIVs (structured investment vehicles). Even mutual funds are selling themselves differently.
Instead of the performance-touting ads that were a mainstay during the last stock market boom, the funds are selling themselves with images that evoke today's investment climate - a glass of water that is half-full or a roller-coaster ride. The same principle holds true for the new save-happy advertising. "We wanted people to feel they could trust us," Bank of America's Saunders says.
But don't mistake the savings-oriented ads for altruism on the part of banks. As lending fees have dried up, banks are making their money - though less of it - on deposits, CDs, and other forms of saving accounts. It doesn't hurt that fees (such as overdraft or ATM charges) have been on the rise for the past decade, according to bankrate.com - or that many of those accounts pay little in the way of interest.
And although banks say the new programs are wildly popular with their customers, there is little evidence to suggest that these savings plans will have much impact on the economic picture or the banks' bottom lines. America, after all, remains a nation of spenders.
The personal saving rate hit zero in the earlier part of the decade and climbed to a mere 1.2% recently, according to the Commerce Department. Wachovia, whose stock is off 65% in the past 12 months, says it has enrolled 1 million customers in Way2Save in the eight months since it launched - more than it expected to sign up in all of 2008. And yet the bank estimates that a typical consumer will save just $600 the first year. That works out to roughly half-a-dozen tanks of gas, not exactly a life-altering amount. Nevertheless, the ads will be judged not by the growth of consumers' savings accounts, but by the goodwill they generate. And from that vantage point, the dividends are likely to be fat.
Reporter Associate Beth Kowitt contributed to this article. 
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