Bank of America ramps up financial-wellness offerings to employees of its commercial clients

Bank of America
BAC,
-2.39%
said it has gotten about $10.5 billion in new deposits and investments from first-time and existing customers in the program, which it launched in 2020.

The program provides employees at companies in Bank of America’s existing corporate-client network with financial-education and investing services, along with the benefits of its Preferred Rewards Gold Tier, which include credit-card bonuses, interest-rate boosters and other perks.

Employees also get access to “Better Money Habits,” the bank’s online-resources and live seminar series aimed at boosting financial knowledge.

Bank of America said about 450 corporate and commercial clients have enrolled in EBI, more than double the number from two years ago. The program is on pace to grow to 500 clients by the middle of the year.

The bank now has 1.7 million accounts among employees in the EBI program, including new and existing Bank of America customers.

In return for providing the incentives, Bank of America gains new customers and the opportunity to cross-sell money-management products and savings plans for college or retirement.

“Clients have a lot of different financial needs, and once they’re exposed to the bank and its programs … people tend to bring more business to the bank,” Aron Levine, president of preferred banking at Bank of America, told MarketWatch. “They may use a credit card or take out a mortgage, or open a Merrill Lynch account.”

Brian Mulberry, client portfolio manager at Zacks Investment Management, said the EBI program fits in with Bank of America’s strategic growth efforts over the next two to three years.

“Once captured as retail bank clients, the ability to offer other services and products is a driver of growth in revenues, which is critical in such a highly competitive sector,” Mulberry said.

The bank’s deposits and loan balances have remained “solid” over the past several years despite a challenging operating environment, he said.

The bank’s consumer unit is by far its largest business unit, representing 36.9% of total assets on its balance sheet, while wealth management represents 12.1% of assets, Mulberry said.

Bank of America’s Levine said the EBI program sprang from the idea of using its consumer bank to address concerns expressed by commercial customers about their employees’ money-management skills.

“Our bankers are always looking for ideas to deepen relationships,” Levine said. “Financial wellness and employee benefits are often talked about.”

Wendy Stewart, president of global commercial banking, said the bank had been hearing concerns for nearly a decade from its commercial clients about the financial well-being of their employees.

“When they have an employee who is not thriving in one or more areas, they’re not going to be as productive,” Steward said. “We said, ‘We can help you on the financial piece.’ We can provide banking, lending and investing advice for employees and bring it to them so they get economic benefits, and we bring them financial advice and all kinds of understanding on how to leverage our offerings.”

Bank of America’s 2023 Workplace Benefits Report found that 96% of employers said they feel responsible for their employees’ financial wellness. At the same time, only about 40% of employers offer financial-wellness programs.

Companies offering the programs will “stand out as employers of choice,” according to Lorna Sabbia, the bank’s head of retirement and personal wealth solutions, with higher employee retention and satisfaction rates and lower stress.

Bank of America said about 20% of the 4 million employees with access to the EBI program are using it, and the number continues to grow.

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