EAU CLAIRE, Wis. - Members aren't afraid of banking online.
So say adoption rates at several credit unions, despite industry reports that consumers- fearful of fraud-are shying away from doing business on the web.
A Consumer Reports survey last year said that one-third of web users surveyed had cut back on their overall use of the web.
Jim Watts, chief information officer at $775-million Royal CU (RCU) here, worried that the credit union might experience a similar trend.
"With all the news of identify theft, I've thought, 'What are we going to do-we're going to lose members online,'" Watts said. "But that just hasn't been the case at RCU. Members have not expressed a huge concern. In fact, we're on our way up."
Nearly three-quarters of the RCU membership actively uses Internet banking, up from two-thirds last year, he said. RCU uses e-Commerce Banker, provided by Glastonbury-Conn.-based Open Solutions, Inc., for Internet banking.
At Hanscom FCU in Hanscom Air Force Base, Mass., bill pay usage is up 16% in the past year, while adoption of online statements has increased by 21%, according to Scott Post, vice president, Strategy and Delivery, at the $552-million CU.
"If anything, members are using the online channel with confidence for activities that are perceived to be less secure in the paper world," Post said.
More members are also actively using Internet banking; two-thirds actively log in, he said. Hanscom uses the Internet Banking solution from Mounds View, Minn.-based Cavion Plus.
At $155-million CorePlus FCU in Norwich, Conn., online banking is even gaining on the archetype of self-service technologies, phone banking. About 25% of the CorePlus membership actively uses online banking, up 25% from last year, said Ray Hasson, compliance manager at the CU.
At the same time, phone banking has decreased by about the same amount, he said.
That makes Hasson himself feel more secure.
"A phone call can be intercepted in plain-voice from anywhere," explained Hasson. But if you're dealing with a reputable online banking provider and the security is genuine, then online banking is much more secure than audio banking."
Granted, members are concerned about online banking security, the credit unions said. However, various security campaigns have helped allay fears.
Multi-factor authentication and other layered security approaches, mandated by the Federal Financial Institutions Examination Council and the NCUA, help keep members feeling safe, Watts said.
"Within the first week of our multi-factor authentication rollout in July, we had 78% user acceptance," said Watts. "That's phenomenal."
Meanwhile, the nation's large banks have lent a helping hand, he said. The recent media blitz promoting multi-factor authentication, paid for by the likes of Bank of America and Citigroup, has helped "solidify the concept in our members' minds," said Watts.
The popularity of online banking at CorePlus can't be attributed to multi-factor authentication, said Hasson.
"We will implement multi-factor authentication as soon as our core vendor provides it," he said. "But even without it, usage is increasing."
In lieu of stronger authentication, the security marketing materials posted at the CorePlus website and in mailers for the past year have "helped members know how to protect themselves against identity theft," said Hasson.
"The campaign is one of the few things I can point to that can account for the increase in online banking usage," Hasson said.
The security awareness materials are sponsored by Grand Rapids, Mich.-based CU*Answers, a CUSO that provides CorePlus with its PC Banking solution.
CUJ Resources
For info on this story:
* CorePlus FCU at www.coreplus.org
* Hanscom FCU at www.hfcu.org
* Royal CU at www.rcu.org
* Cavion at www.cavionplus.com
* CU*Answers at www.cuanswers.com
* Open Solutions at www.opensolutions.com
