Citizens plans push to get customers to switch banks

Citizens Financial Group, New England's second-largest bank, plans to launch today an aggressive effort to encourage customers to switch banks.

The bank plans to pair customers with a "concierge" to handle issues such as setting up online bill payment and direct deposit, and to close customers' old bank accounts for them. Executives hope the initiative will provide an extra incentive to thousands of customers who dislike their banks but stay anyway because it is too difficult to change.

"People hate switching banks," said Lawrence K. Fish, Citizens' chief executive. "We're going to provide a concierge service that will make that effortless for you."

The move comes as Bank of America Corp. of Charlotte, N.C., is in the midst of rolling out its brand at Boston-area branches of FleetBoston Financial Corp., which it acquired this spring. Bank of America introduced its brand on Fleet's online banking service this fall, and it has converted the signage at many ATMs as it prepares to replace all Fleet outdoor signage next month. Many rival banks around the region have stepped up their advertising and vowed to win over customers dissatisfied with the acquisition of a New England institution.

Citizens tends not to speak directly about stealing customers from Bank of America, but its executives have been quietly working behind the scenes to find ways to match or one-up the North Carolina bank. Citizens earlier this year introduced free checking with direct deposit, then last month said it would pay customers $100 if they switched banks. The concierge idea, in which the bank dispatches a team of employees to switch accounts for customers, is the latest salvo in that effort.

Citizens' marketing director, Theresa McLaughlin, insisted the bank's new switching initiative is not aimed at Bank of America or other rivals, but instead responds to a need in the marketplace. "We do it based on customer research," she said.

Many banks view services such as online bill paying, direct deposit, and automatic fund transfers from a checking to a savings account as features that encourage customers to stick with their bank, even when another bank offers them a better deal. Those relationships are typically time consuming to unwind.

But if Citizens succeeds, it will handle the most difficult of those issues for its customers, plus pay fees associated with the switch, making a change easier. That idea could pay dividends for the bank, said Suzanne Moot, a banking consultant with M&M Associates in Milton.

"I was once observing a focus group where one guy said, 'Changing banks is a bigger pain than changing dentists,' " she said. "Anything that a bank like Citizens can do to make it easier for customers will likely have some benefits for the bank."

The bank plans to back its initiative with heavy advertising on television, newspapers, and radio. Its print ad, set to debut the week of Nov. 14, proclaims "Bankers so nice, they'll even help you move."

The idea to make it easier for customers to switch banks has been around for years, and other banks have tried various versions of it. But Citizens' McLaughlin said the bank takes the idea the furthest. Citizens not only tells customers how to switch banks, as other banks do in their "switch kits," it has created an entire team of people to handle it for customers.

Customers provide Citizens, the US subsidiary of the Royal Bank of Scotland, the account numbers for their utility and other bills they pay online, and the bank's switch team will change them over automatically. They also can switch direct deposit and close out a customers' old bank account.

But several of New England's other major banks say they also make it easy for customers to switch their accounts. Sovereign Bancorp, Massachusetts' third-largest bank, has a tool to help its customers consolidate the information they need to switch into one place, but the service is not automated. Bank of America's president of the Northeast, Anne Finucane, said its branch workers are happy to walk potential customers through the switching process.

She also said the bank has pledged not to lose a single customer in its merger with Fleet.

"Bank of America has almost 6,000 store managers ready to deal with any issues our customers have, whether that's sales, customer account changes, or directing them to an investment adviser," she said.

Many banks, including both Bank of America and Citizens, have become increasingly focused on using checking accounts as the foundation for a broader relationship with customers. These banks are willing to offer customers free checking, but they encourage them to use online banking and other products designed to retain them at the bank.

Sasha Talcott can be reached at stalcott@globe.com.