Magazine article American Banker

Fleet Hopes Product Turns Unbanked into Customers

Magazine article American Banker

Fleet Hopes Product Turns Unbanked into Customers

Article excerpt

With the dual aim of reducing teller wait times for existing bank customers and attracting new clients, FleetBoston Financial Corp. on Monday unveiled a direct deposit account for unbanked customers, especially those who use Fleet branches to cash their paychecks.

The new accounts, which carry no minimum balance requirement or monthly fees, allow free access to funds directly deposited by employers. Though they cannot use the accounts to write checks, customers can access their money through Fleet's automatic teller machines and can use a debit card to make purchases and get cash back at point of sale retailers.

Robert B. Hedges Jr., the head of banking products for Fleet's consumer banking and distribution group, said market research had identified a group of low- and moderate-income consumers who are not interested in traditional checking accounts but need a cheaper way to cash their checks.

"There is a large segment of the consumer population who really want a cash-oriented bank account and who aren't writing checks, and have shied away from doing business with banks for all sorts of historical and cultural reasons," Mr. Hedges said.

Fleet currently cashes about 1.1 million noncustomer payroll checks a month at its branches. It expects to open 8,000 Access Advantage accounts by yearend and thereby reduce the number of noncustomer payroll checks cashed at its branches this year by 216,000.

The company has been steadily rolling out initiatives to improve its customer service reputation, which has suffered after years of acquisitions. For example, last month it began offering bundled accounts for small-business customers and said it would add about 500 tellers to its branch network.

The Access Advantage accounts are also part of Fleet's effort to expand its customer base and wring more from its retail banking unit. …

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