BETHESDA, Md.-Many credit unions have struggled to successfully monetize Facebook and other social media outlets, but a new project aims to change that.
SafeNet is a planned, new social networking platform specifically aimed at credit unions, members and CUSOs. The brainchild of Jay Schwartz, VP of sales and service delivery at Marriott Employees FCU here, the SafeNet proposal is one of three finalists for the second annual CO-OP THINK Prize, the winner of which will be announced this week. The grand prize is $10,000 from MasterCard.
Schwartz's CU does not currently utilize any social media platforms, he said, in part because of the neglible, if any, ROI. SafeNet was conceived as a way to mitigate some of those issues. MEFCU currently has a goal of establishing a social networking presence by sometime in 2013.
Whereas person-to-person communication is central to Facebook's operation, the SafeNet model proposes something of a hybrid, and would feature a section for member-to-member communication, with the credit union having priority for messaging products and services.
Schwartz said that privacy in member-to-CU communication was also a concern. Users can ask questions online rather speak on the phone or in person with CU staff they may know. "They may want a degree of anonymity just to do their factfinding," he said.
Identity Issues
"It's locked down, so only you and your credit union know your identity," added Schwartz. "Everyone else sees a screen name, so therefore it's pretty much completely masked. Right now you sign onto Facebook and everybody sees who you are. With this one, only you and your credit union do that."
Schwartz admitted that a user could use their own name as a screen name rather than something more anonymous, but said that "at least you have the option of doing it and keeping your stuff on a private level. We would strongly recommend that people develop a unique screen name rather than their own name."
When it comes to the potential revenue piece, SafeNet proposes allowing for partnerships between CUs and CUSOs. "Credit unions and service organizations can sign an agreement allowing members to sign up for services-brokerage services and so forth," said Schwartz. "It facilitates an easier way for revenue to be shared between credit unions and service organizations through this network." He added that the site could also generate revenue through advertising sales and more.
SafeNet would also include an element allowing CUs to communicate with one another, including employee training, the sharing of best practices and more, all co-developed by the participating credit unions.
Schwartz also plans for the site to include financial news, blogs, videos, a place for member-users to receive financial advice and more. Analytical tools will enable credit unions to set goals and track results, as well as monitor member participation and see what gateways members use to get to the site.
Schwartz is in charge of information systems at MEFCU, and with that IT background he is projecting start-up costs of $189,000, which would cover legal fees, web development, consulting, promotion and more. "I don't envision any staffing costs until later on, and somebody has to be hired to run this thing," he said.
Investment Opportunity
The $10,000 grand prize for winning the THINK competition will only be a drop in the bucket, but Schwartz said that the site also offers an investment opportunity for CUs to help with capitalizing the project and providing the funds needed to put the necessary infrastructure in place.
The cost of use has not yet been determined, but Schwartz said he envisioned a two-tiered system: fee-per-member or fee based on asset size.
At this point Schwartz still does not have any mock-ups for the proposed interface, saying, "It's all up here in my head," and he is unsure of his chances for winning the competition. "I've read the other ideas and they're all very good, but we'll have to see how they work," he said. "My idea was based out of necessity in terms of where I thought the credit union movement needed to go and try to benefit everybody-members as well as the CUs themselves."
