HSBC customers, you're never going to feel so attractive. Less than a week to go before First Niagara completes its takeover of 195 HSBC branches, competing banks are falling all over themselves to try to snatch up you – and your deposits.
The eager suitors are hoping to capitalize on what they expect will be turmoil and disruption accompanying the banking giant's break-up with Buffalo. The $1 billion deal is set to close Friday.
Under the deal, First Niagara Financial Group will buy the branches, then sell 64 to KeyCorp, Community Bank System and Five Star Bank over the next few months, while closing 35 others that overlap and aren't needed. The other three banks also expect to do some consolidations.
Together, the series of big changes means uncertainty and concern for many customers, and opportunity for the other banks. They see this as a great time to swoop in with the banking industry's equivalent of a dozen roses and a romantic walk on the beach.
They're trying everything from using catchy pick-up lines, showering new customers with cash bonuses and promising lots of quality time to build a solid relationship.
"Generally,banking is a tough business, and it's hard to sell people to change," said Darren King, executive vice president for retail banking atM&T Bank Corp. It's up to the banks on the prowl to persuade new customers to give them a shot, King says.
The banks have certainly been gearing up. M&T is offering a $100 bonus to anyone who switches over to "raise the green flag," as its campaign says. The Buffalo-based bank, which will be No. 1 in Buffalo after HSBC leaves the market, will also pay $50 for a customer referral.
These aren't new campaigns, King acknowledged.
"We're probably being a little more thought-provoking than we usually are," King said.
M&T is also making itself more available, extending hours from 1 p.m. to 3 p.m. at 43 branches in the Buffalo, Rochester and Jamestown markets that are already open on Saturday. After eight weeks, the bank will assess whether to continue.
Evans Bancorp is also gettin' all dolled up for you.
"What we've been doing for a matter of months is reaching out to HSBC customers that we're aware of and making ourselves available," said marketing director Kevin Brady. "We've had a lot of conversations, and now that the disruption is more imminent, we're seeing a whole lot more."
Like M&T, it has also been active with advertising, urging consumers to "choose your bank," rather than letting the bank choose them through sales.
The Hamburg-based bank started a new billboard campaign a couple of months ago -- "Choose Better, not Bigger" -- as an extension of its earlier campaign. It also has a television commercial about the bank's brand awareness, and is running a radio ad directed squarely at the HSBC transactions. A print and digital campaign will start within a week.
And, also like M&T, it's extending its branch hours at seven of its 12 branches on Saturdays, to 2 p.m., beginning this week and continuing through June.
"You want to make yourself available," Brady said. "The HSBC customers seem to be in play now, and we are seeing more activity in the branch."
Other banks are taking a lower-key approach, relying on their message, reputation and word-of-mouth rather than promotions.
"As the only bank that provides customers with seven-day banking, we see a lot of opportunity in Buffalo," said Sylvia Bronner, spokeswoman for Citizens Financial Group, parent of Citizens Bank. "People are busier than ever, and our customers tell us they love the convenience of our in-store Tops branches, which are open as late as 7 p.m."
In Little Valley, Cattaraugus County Bank is "using our one-on-one relationships with our customers and potential new customers to make them aware of why and how they should bank with a community bank," said CEO Salvatore Marranca.
"Relationships do not matter to the megabanks, only transactions," he said by email.
However, the bank doesn't see any benefit in marketing promotions and has actually reduced its marketing spending by over 50 percent since 2008.
Even among the banks that are buying branches from First Niagara, executives are counting on their smaller size and customer service to help attract customers and employees.
Five Star Bank, for example, has hired more commercial lenders in the Buffalo and Rochester areas, including two from HSBC who approached the smaller bank on their own.
"We didn't solicit them," said CEO Peter Humphrey. "Our reputation is pretty attractive, whether as an employer of choice or a lender of choice. People come to us because of our style of banking."
For their part, HSBC and First Niagara say they're trying hard to retain customers and ensure a "smooth and seamless" transition. They're also working with the other three banks to guarantee flawless transition for those followup deals, which are scheduled to close by the end of September.
While the other banks claim to have had success in attracting customers and deposits away from HSBC, the British banking giant insists that its total deposit balances in the branches that are slated to be sold remain just above $15 billion -- almost exactly where they were last July.
The two banks have been sending letters and making telephone calls since at least mid-April, and First Niagara even ramped up the staff in its call centers "in anticipation of volume," which has since doubled, said Scott Fisher, senior vice president and retail channels director.
"Customers did exactly what we thought they were going to do," he said.
One problem that was expected has finally started to emerge: HSBC customers whose accounts end up being split between more than one acquiring bank, such as First Niagara and Key.
Even though it may be the same customer, bank accounts and deposits are associated or linked with a particular branch. So the accounts could get split simply because of "who got which branch" in the deal, Fisher said.
Officials from First Niagara, HSBC and Key determined three months ago that fewer than 6,000 customers might end up with split accounts. So the banks gave those customers 60 days to go into an HSBC branch or call customer service to express their preference about which bank they wanted their accounts to go with.
"Those were processed or honored almost exclusively according to customer wish," Fisher said.
The cutoff date was April 27, to allow enough time to prepare for the conversion in mid-May.
"We now know which ones are going to First Niagara and which ones are going to Key," Fisher said.