MADISON, WISCONSIN (Milwaukee Business Journal), May 6, 2005:
As baby boomers move into retirement age, some banks are adding new checking account incentives that cater specifically to a demographic that is more active and healthier than previous generations of retirees. Those 50 and older are looking for incentives that will help them save for retirement and contribute to their savings, said Jeremy Janes, spokesman for Wisconsin's AARP, based in Madison. Programs that fit that bill are attractive to that market, he said.
"It used to be offer people a toaster to get them to sign up for a banking account, but I don't think that's going to work anymore. Not with our members, anyway," he said.
The boomer generation is more informed about finances than earlier generations.
Because people are living longer and staying active longer, they are looking for ways to make their money stretch, said Tracey Mills, a spokeswoman for the Washington, D.C.-based American Bankers Association.
"These are people who have more complicated lives and need more financial products that meet their lifestyle," she said.
Indeed, a number of local banks' checking account programs aimed at people 50 or 55 and older offer free financial planning advice and other perks such as free checks, discounts on safe deposit boxes, free ATM use and free online banking.
'Elite' checking
Late last year, U.S. Bank, Milwaukee, combined three checking products for the 55-and-older crowd into one checking program, called "Silver Elite Checking."
The program includes free checks, discounts on safe deposit boxes, free travelers' checks, cashiers checks and money orders, said Deborah Hill, senior vice president of retail banking in Milwaukee. The bank used focus groups to learn what discounts and products were important to that age group, Hill said. Since the product was introduced in November 2004, it has grown by nearly 20 percent in the Milwaukee market.
M&I Marshall & Ilsley Bank, Milwaukee, revamped its checking account for those 50 and older about a year ago. The changes included adding a rewards program for those who use a credit or check card, increasing the number of ATM machines customers could use without a fee and a fee-free online banking option, said Terry Littel, vice president in the corporate marketing group.
"You have to keep up with the times," Littel said. "Things change."
One reason bank executives got rid of fees for those with "Prestige Checking" and who use M&I or network ATMs is because the current 50-and-older crowd uses them much more frequently than earlier generations, Littel said. Under the rewards program, people accumulate points that they can use toward travel. Many customers in the program have been with the bank for years. Giving them more freebies and discounts is one way to reward that loyalty, Littel said. Membership in the program has increased over the last year, although she declined to provide specific figures.
Selling annuities
Tailoring a checking account to older clients also gives banks the opportunity to sell them other products, such as annuities, mutual funds or money market accounts, said Michael Crowley, president of Bank Mutual, based in Brown Deer.
"It has the ability to cement the relationship with the customer," Crowley said.
The bank also eliminated its travel package deals for those with "Silver Spirit" checking accounts about five years ago. Previous generations of retirees likely hadn't done much traveling and they preferred traveling in groups, Crowley said. Baby boomers are much more independent and more traveled than their predecessors and aren't as interested in traveling with others, he said.
The bank in the last decade made one concession to the baby boomer generation. It used to market its Silver Spirit program to customers 55 and older. Now the materials say "55 or better" because this over-50 crowd doesn't consider itself old, Crowley said.
"It's just a matter of a whole different group of people coming up," Crowley said. "It's so different from two generations ago when you hit the rocking chair at 65, so I think we have much more active people and they get bored if they just sit around doing nothing."
By Jennifer Batog
© 2005 American City Business Journals Inc.
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