Tuesday Topic: Do Cash Bonuses Work?

It's hard to believe that more consumers wouldn't take advantage of the cash bonuses being offered but then you consider the lack of motivation cash bonuses often have with our employees and you remember that extrinsic motivators don't work with everyone. We've not tried cash bonuses to attract consumers but I know the economics generally work except for the mischievous ones. Steady and intentional wins the deposit race even if we don't always have the patience for it.

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John Tyson
CFO/SVP
Altamaha Bank & Trust Company
Vidalia GA
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Original Message:
Sent: 01-21-2020 15:32
From: Barb Rehm
Subject: Tuesday Topic: Do Cash Bonuses Work?

CEO Bill Demchak said PNC is rethinking its cash promotions for new checking accounts, saying too many customers take the money and never use the accounts. "There's a lot of mischief in that," Demchak told American Banker, adding that cash bonuses have become "less attractive to us than some other things we're doing." PNC is offering $300 to new customers who agree to set up direct deposits totaling at least $5,000. This story caught my eye because, until last week, I had never considered one of these cash offers. In fact, I've had the same checking account since 1984 (with a community bank in Washington, D.C., that after multiple mergers, is now part of Wells Fargo.) But then Chase came into my market and offered me $1,000 for depositing $75,000 for three months.

Will I become one of the mischievous customers Demchak mentioned? Maybe. Wells Fargo still has my direct deposit, all my online bill pay info, and way more branches near me. Has your bank tried cash bonuses? What do you do to entice new customers to use their accounts? I'd love to hear what has worked for your bank?

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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