Sure, First National Bank of Omaha may predate the Model-T Ford and modern baseball, but this hoary, Midwestern bank knows how to adapt to the times.
The bank has been around for 150 years, but it’s not looking to coast on its reputation. In an effort to market its Internet bank, FNBO Direct, to a national audience, the institution is issuing a “Pay Yourself First” challenge to all Americans. The idea: deposit paychecks directly into savings accounts—as opposed to the more common checking-account option—and start earning interest right away.
The brand-building campaign is designed to boost deposits and garner media and blog attention. FNBO Direct President Rajive Johri wants FNBO to compete with the nation’s biggest money-center banks. “The focus of Americans has been on spending and spending through credit,” Johri says. “What we’re saying is, ‘You can do all the things that you currently do, but you can do it in a manner where you actually save.’”
The idea is to have the customer direct deposit his paycheck into an FNBO Direct savings account. While that money is waiting to be transferred from the savings account to the FNBO Direct Online BillPay account, it earns interest. In June, the rate was at 3.50 percent, 89 percent more than the national average, according to BankRate.com.
To accompany the brand-building campaign, FNBO has launched a contest that customers enter by uploading a 10- to 60-second video at the contest Website (www.pyfchallenge.com) about why they should be a finalist. FNBO executives asks amateur directors to make them laugh or cry. “Be compelling, original and creative,” say contest rules. The bank will choose five finalist at the end of July.
The finalists compete for “best saver” between October and April. Although one criteria of actually winning the contest is the sum of savings, the public will also vote and participate in an ongoing blog on the savers’ “money-saving journey.” The top saver wins a trip to a spa. But no one will go home empty- handed. The bank will match all five contestants’ savings—up to $5,000 each.
Dan Harley, vp of the bank’s e-business department, says the bank hopes to attract independent savers who prefer to manage their own finances online and through mobile phones and ATMs. “We are looking to find more folks who fall more into a behavioral segment than a demographic segment,” Harley says. For Johri, valuable segments include Generation X and Y and single women and mothers in charge of paying the household bills.
While “Pay Yourself First” is meant to polish the Internet bank’s brand, it also will use the traditional bank’s name to sell customers. “The best interest-rate offers have primarily been coming from foreign banks like ING, HSBC, Emigrant and so on,” Johri says. “And here is an all-American bank that has been around for 150 years.” Harley says the bank’s marketing material emphasizes the bank’s century-plus existence.
FNBO Direct opened to the marketplace only a year ago and has already amassed 50,000 customers and $1 billion in deposits, with the goal of a million new customers in the next five to 10 years; eventually, Johri envisions the bank becoming one of the nation’s largest.
Johri’s stints at JPMorgan Chase and Citigroup has served him well before he joined FNBO in September 2005. The India native built a team of executives with experience at money-center banks. “We understand [money-center banks’] strengths, but even more importantly, we understand their weaknesses, and part of our effort is to exploit those weaknesses,” he says. He argues, for instance, that BofA, Citi and JPMorgan Chase can’t compete as aggressively as FNBO Direct with online-banking products for fear of cannibalizing their deposits.
But FNBO Direct has a difficult road ahead, says Thomas Ordahl, a partner at New York-based branding consultant Group 1066. “Building a retail-bank brand is one of the toughest assignments in the industry,” Ordahl says. “In [FNBO’s] case, to be successful and to be a disrupting brand ...they’re going to have to have some type of an offering that distinguishes them.” If the savings challenge is “a temporary gimmick, those don’t have lasting power,” he notes. “They have to break a rule and do something that is a little different.” (c) 2008 U.S. Banker and SourceMedia, Inc. All Rights Reserved. http://www.us-banker.com http://www.sourcemedia.com
