Group Head, North American Personal and Business Banking
BMO Financial Group customers embraced a new product that rewarded them for saving money, just as the research suggested they would. But the level of enthusiasm from bank employees marketing the Savings Reward account surprised Erminia “Ernie” Johannson.
“They made it successful,” said Johannson, BMO’s group head for North American personal and business banking. In fact, as a result of the product’s widespread appeal, the bank is on pace this year to double its previous record for new personal savings accounts, according to Johannson.
This savings product, Johannson said, dovetailed with the bank’s broader purpose: “to boldly grow the good in business and life.” But it also flowed from a value proposition that Johannson developed for the bank in 2020, the notion that BMO could help U.S. customers make real financial progress. Personal savings is one area where Americans notoriously lag.
Under the Savings Reward account, BMO kicks in an extra $5 each month that a customer saves at least $200. So far, the bank has opened 83,000 Savings Rewards accounts for consumers and nearly 3,000 for small businesses. Roughly 40% of consumers and more than 50% of small businesses are meeting their monthly minimums for savings.
Read more:
Executives recognized the accounts would cost the bank. But the costs have been offset by increased customer loyalty, new account openings and the ability to differentiate BMO in a competitive market, Johannson said.
To address the broader needs of small businesses, particularly minority-owned businesses, Johannson and her team are expanding nationwide a program launched as a pilot in December 2020. BMO for Black and Latinx Businesses is designed to improve access to capital, educational content and meaningful networking opportunities, among other tools. In its first nine months the program funneled $11 million in capital to 260 Black and Latinx entrepreneurs.
“Some of them just needed encouragement to go get the loan to expand their business or start their business,” Johannson said.
