Planning 2005 Technology Investments to Achieve the Greatest Impact

Cheryl Harris
November 11, 2004

Credit unions planning their budgets and technology purchases for 2005 should focus on initiatives that make an immediate impact on member satisfaction and staff productivity.

With the increasing number of members adopting online services, more credit unions are focusing on ways to make their online channel more marketable. By 2007, Tower Group estimates that close to 37% of all U.S. households will be registered to bank online – that’s a total of 42.5 million households.

As consumer expectations for online services increase, credit unions must focus beyond the basic suite of online services. Outlined below are considerations to keep in mind when shopping for credit union technology tools.

Transforming online bill payment into a bill management tool . Members’ needs have matured beyond the basic online bill pay service. Today’s tech-savvy members are looking to receive, review, and pay their bills online. To meet this need, credit unions are turning to the more complete package of electronic bill payment and presentment (eBPP). With eBPP, payment information is automatically pre-filled and the member is able to view the details of the bill online. This leads to greater convenience for the member and alleviates their concerns of paper invoices delivered via the mail.

The next evolution of online money movement .Members are now expecting to quickly and effortlessly move money online between their accounts at the credit union and other financial institutions. Also known as person-to-person (P2P) or account-to-account (A2A) transfer capabilities, this service enables members to electronically transfer funds via the Automated Clearing House (ACH) network. Credit unions may be concerned that outbound transfers will exceed inbound money transfers. In actuality, data from credit unions shows the ratio is around 50/50. And because members visit their credit union’s website to initiate transfers, the credit union has more opportunities for building and maintaining member relationships.

Strengthening online relationships through an integrated financial management tool . Account aggregation is showing impressive growth and members are realizing the value of this portfolio management tool. For example, Suncoast Schools Federal Credit Union in Tampa, Florida (with $4.2 billion in assets and 343,000 members) has been offering account aggregation since December 2003. On average, 11% of its online banking users actively use account aggregation and an additional 1,000 members enroll each month.

Increasing member satisfaction through single sign-on access . Consider the various logins and passwords you’re required to remember to access secured systems. Now think about it from your member’s perspective. If the member has already been authenticated into one of the credit union’s systems, why require them to sign on again to another system? A feature like single sign-on (SSO) is critical to a positive user experience.

Bellco Credit Union based in Greenwood Village, Colorado (with $1.5 billion in assets and 144,000 members), discovered the value of this service by offering a new SSO interface between their home banking and bill pay solutions. Sandra Sagehorn-Elliott, vice president of CRM, says, “The number of new bill payment enrollments we received each month had remained relatively static for about a year. Then we began offering single sign-on access and enrollment through home banking. Coupled with a marketing campaign, this caused new enrollments to more than double. Moreover, those enrollment numbers have remained high.”

Proactive communication with members . An added convenience for a member is access to key information for financial decision-making. This goal is closer to reality with secured messaging. A secured messaging service allows secure two-way communication between the credit union and its members, enabling them to feel comfortable sharing private or sensitive information.

An alert system allows members to request notifications when designated events occur. The alerts are established by the member based on a list of events selected by the credit union, such as account balances falling outside of a designated threshold, insufficient funds (NSF) activity, or the due date of an important bill. This added level of convenience enables members to continuously monitor finances at the credit union.

Member growth and increased efficiency using an online solution . When a prospective member finds an attractive offer on a credit union’s website, it's critical to provide them the tools to take immediate action. The first step is to become a member. Offering a new account opening service through the credit union’s website enables consumers to apply for membership 24 hours a day, seven days a week. Compliance checks, ID verification, and credit scoring can all be facilitated electronically. Immediate funding of a new account can also be completed online through an ACH or credit card transaction. Boeing Employees Credit Union (BECU) in Seattle (with $5 billion in assets and 381,000 members) has seen significant success with its online account opening tool. BECU has been offering the service since April and is seeing about 10% of its new member applications coming through this channel. BECU has found these new members to be strong online banking users who are more likely to establish an online service relationship with the credit union.

Reprinted with permission from Corporate Network eCom LLC, a credit union service organization. For more information on the new technology trends highlighted above and how they can be implemented in your credit union, please contact Cheryl Harris at 888-656-4050, ext. 6027 or visit www.memberstreet.com.