Bank of America expands rewards program for existing customers
By Peter Rudegeair
NEW YORK (Reuters) - Bank of America Corp will announce on Monday it will lower the threshold for consumers who qualify for discounts on loans and other benefits as the No. 2 U.S. bank seeks to win more business from existing customers.
Clients who have at least $20,000 in deposits and investments at the bank will be eligible for the benefits, according to an advance announcement reviewed by Reuters. The changes will be phased in starting this week.
Previously, the threshold was a minimum of $50,000 in deposits and investments.
The bank is offering lower rates on mortgages and home equity loans, higher interest rates on savings accounts and free stock trades to members of its new "preferred rewards" program.
The new benefits are part of Chief Executive Brian Moynihan's push to broaden the array of products and services to current customers as the bank struggles to boost overall revenue. He has pressed executives in different parts of the bank to work together to sell, for example, brokerage services to investment banking customers.
Among the areas of focus are households with some savings, but not enough wealth to be served by brokers at Bank of America's Merrill Lynch unit, or private bankers at its U.S. Trust unit. In 2011, Bank of America set up a "preferred banking" group to focus on these customers, known as "mass affluent."
As part of this effort, the bank has hired thousands of investment advisers within its retail branches and developed Merrill Edge, an online brokerage focusing on the mass affluent that has amassed $100 billion in assets under management in four years.
"We have re-pivoted our entire organization on these clients to better serve them," said Dean Athanasia, the executive in charge of preferred and small business banking. Continued...