Ability To Move Money Popular, But Aggregaton Lagging
Early results from the integrated account aggregation and funds transfer platforms at Patelco Credit Union indicate a gush of money movement that hasn't yet translated to heavy aggregation use.
"Money movement is the more popular piece," said John Shields, senior vice president of e-Business at the $3.1-billion CU. "It's more practical for most people."
Patelco garnered 1,000 active users for Online Money Movement, provided by New York-based CashEdge, one month after it offered the service to members, Shields said.
Funds transfer transactions tripled in December, representing about $1.5 million, from November transfers totaling $500,000, Shields said.
Homebanking-hungry Patelco members can perform inter-institution funds transfers and person-to-person payments in addition to moving money within Patelco accounts. Patelco has 190,000 members, 31% of whom are active homebanking users.
But it's wait-and-see with CashEdge's Advanced Account Aggregation platform. Patelco is beta-testing with 50 users, who view and manage their banking and brokerage accounts at Patelco's website.
Shields said funds transfer capabilities haven't yet shown a relationship to account aggregation activity. The CU hoped to finish beta-testing with members and go live in January.
In theory, the integrated platform is smart stuff. Instead of just looking at summaries of their financial portfolios on an aggregation screen, members can also manage money with just one log-in.
"What we really like is that the platforms are integrated," Shields explained. "Members have the ability to view the aggregated information and then actually act on it with the money movement piece-all within one page within our homebanking site."
Shields believes that, ultimately, money could move to the beat of Patelco's drum. For example, members could view their aggregated financial portfolio, and then move money from high-balance bank checking accounts into high-interest Patelco certificate accounts, Shields said.
Patelco's previous aggregation provider, Yodlee, Inc. in Redwood City, Calif., couldn't offer the bundled platform. Besides, said Shields, "CashEdge came in at half of what Yodlee charges per month. We're saving a couple thousand dollars a month, plus tens of thousands for getting aggregation up and running.
"With Yodlee, we had very small active usage," he continued. The 300 active users had to sign-in to aggregation on a login separate from Patelco homebanking.
And, in addition to the data encryption and multiple layers of security employed by CashEdge, Patelco members can choose to manually enter their PINs for each of the aggregated financial accounts each time they update the aggregation frame.
"There's still some segment of the membership worried about storing a PIN for other accounts," explained Shields.
Although Patelco is seeing a higher outflow rather than inflow of funds, Shields isn't worried. "Money movement is just a service. People would send money with a check or by calling us even without the service."
Shields said that large banks are the recipients of most of Patelco members' funds transfer outflow. Money coming in to Patelco is often from other credit unions, which probably offer lower interest rates, he said.
GTE FCU, a $1.6-billion CU in Tampa, Fla., also uses CashEdge's bundled platforms.