Banking on Cause Marketing

Open an account with ableBanking and the Internet-based bank will make a $25 donation to the cause of your choice. More, albeit still undefined, donations are promised in time.

It sounds a little like the bank promotions of yesteryear when a new account might bring you a toaster, a set of china, even a firearm!

I don’t know exactly how ableBanking makes money, but its parent company, Maine-based Northeast Bancorp owns a lot of insurance agencies in the State. It could be that ableBanking will serve as a lead generator for Northeast’s insurance business.

In traditional ‘George Bailey’ style savings banks the bank pays an interest rate lower than the rate it is able to lend at. Savings banks made their money on the difference between the interest they’re paid and the interest they pay their depositors.

George Bailey, you’ll remember, is the main character in the classic Christmas movie ‘Its a Wonderful Life.’ George worked for a savings bank that had a liquidity crises caused by a venal big bank.

Costs in such institutions are key. Because ableBanking is basically Internet-only its cost structure ought to be pretty low. And so long as ableBanking keeps it simple and doesn’t get into 'warrants,' 'swaps,' 'forwards' or other complicated derivatives that helped to sink the banking sector in 2007-2008, it ought to be relatively low-risk.

ableBanking is Maine’s ninth largest public company, according to Wikipedia. It occupies the same market space as ally Bank and ING Direct. All three banks don’t offer mortgages, which because of their length can be enormously risky, credit cards, checking accounts, business banking or much else in the way of loans. Ally Bank, however, does offer auto loans.

ING Direct built deposits by offering large cash bonuses to new depositors. Ally used traditional TV advertising to drum up business.

Scotty Henderson’s fingerprints are all over the bank’s blog, so I suspect my fellow cause marketer and blogger has played some role in the campaign’s development.

I’m anxious to get a sense from him how well the promotion is working.

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