Magazine article American Banker

While Spreading out, Allstate Thrift Keeps Narrow Focus

Magazine article American Banker

While Spreading out, Allstate Thrift Keeps Narrow Focus

Article excerpt

As financial services companies continue to expand and reshape themselves, many are taking a narrow approach to their cross-sales targeting, even while they broaden their product offerings.

Allstate Bank, in Northbrook, Ill., is a case in point. The thrift is in the midst of a rapid nationwide rollout -- on Monday it added 27 states and the District of Columbia to its realm of operation -- but the thrift and its insurer parent, Allstate Corp., are by no means trying to be generalists.

Instead the $79.8 million-asset thrift is focusing on retirement planning, particularly for the middle-income Americans who might want to supplement the annuities and life insurance the insurer already offers, said Kevin Slawin, Allstate Bank's chief executive.

As financial services companies continue to expand and reshape themselves, many are taking a narrow approach to their cross-sales targeting, even while they broaden their product offerings.

Allstate Bank, in Northbrook, Ill., is a case in point. The thrift is in the midst of a rapid nationwide rollout -- on Monday it added 27 states and the District of Columbia to its realm of operation -- but the thrift and its insurer parent, Allstate Corp., are by no means trying to be generalists.

Instead the $79.8 million-asset thrift is focusing on retirement planning, particularly for the middle-income Americans who might want to supplement the annuities and life insurance the insurer already offers, said Kevin Slawin, Allstate Bank's chief executive.

Trained Allstate insurance agents "discuss banking products as part of the total retirement savings and planning process, and some of our banking products appeal to a good number of our customers," Mr. Slawin said.

Allstate Bank now offers checking and savings accounts, certificates of deposit, money market accounts, and mortgages. Mr. Slawin said it is considering adding a variety of other things to the mix, possibly by yearend.

Mr. Slawin said Allstate plans this year to train agents in 49 states in marketing its banking products. (Allstate has no agents in Massachusetts.)

The insurer-owned thrift's expansion follows on the heels of a competitor, State Farm Bank, which began doing business in 47 states and the District of Columbia last year and now has more than $1.2 billion of assets.

Both companies are counting on strong brand name recognition and their national network of salespeople to talk up the thrift's deposit accounts, loans, CDs, and other banking products.

And they are not alone.

MetLife Inc. of New York last February bought Grand Bank in Kingston, N.J., and renamed it MetLife Bank. Even the San Francisco discount broker Charles Schwab & Co. recently outlined plans to seek a bank charter to supplement its business.

MetLife's target audience is its customers who receive life insurance payments. And Schwab will add some basic banking products and pitch them to its higher-end customers.

In all cases, the goal is to get a bigger share of existing customers' business rather than draw in new customers in droves. And focusing on a narrow group of customers may help allay concerns that these companies want to do what few think they can: namely, take on retail banking giants head-to-head for banking business.

Peter Patrino, the director of insurance services at Fitch Inc. …

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