Online account aggregation is here to stay for credit unions competing to be the trusted financial advisor, according to CUs with popular aggregation programs.
"Aggregation" was one of the buzzwords to emerge during the Internet boom of the 1990s, and refers to technology that pulls a member's personal financial data from various third party websites, consolidating the information into one fiscal snapshot for the member to view securely on the CU website. Proponents argued that "aggregation" brought "stickiness," that is, kept members from leaving, and claimed that credit unions either aggregate for their members or watch them be aggregated elsewhere.
Today, much of the hype has died out, but many credit unions remain believers.
"Account aggregation helps us to stand out above others," said Tammi Wimmer, Ebranch operations manager at First Technology CU in Beaverton, Ore. "Having the ability to use account aggregation and our Funds Transfer Service helps members think of First Tech as their primary financial institution."
10 Times The Penetration
Today less than 1% of U.S. households actively use online aggregation, according to Forrester Research, Cambridge, Mass., even though the service was introduced five years ago.
But at least 10% of the memberships at First Tech CU, Stanford FCU (SFCU) of Palo Alto, Calif. and Pinnacle FCU of Edison, N.J., use aggregation.
People sit up and take notice when they learn about the bundled aggregation, funds transfer and bill presentment services known as Money HQ at the $160-million Pinnacle FCU website, said Jeanne Chichelo, chief operating officer at the Edison, NJ-based CU.
"It's wild for a credit union to have this unique service," Chichelo explained. "The high-end member wants the latest and greatest, and with Money HQ, we can offer that to a member even before many banks do."
The three CUs make it easy for members to sign up-and sign on-to aggregate their accounts. For example, their members need only sign-in once to access most online services, including homebanking, bill pay and aggregation.
Members at First Tech and SFCU aggregate their accounts free of charge; Pinnacle FCU members pay $4.95 per month.
Pinnacle FCU's blue-collar SEG is not the sort you'd expect to latch onto online services, said Chichelo. Nevertheless, nearly 50% of the credit union's 4,000 active checking account members use homebanking, she said.
In addition, nearly 20% of Pinnacle's online members are also using the year-old Money HQ, provided by Online Resources of McLean, Va.
Chichelo was not able to provide specific adoption rates for the account aggregation portion of Money HQ.
It's clear why Pinnacle members are attracted to aggregation: "It's easy for members to sign up, and we do great marketing along with Online Resources," Chichelo said. "We offer our member service representatives an incentive program to reward them for every member who signs up for Money HQ."
At Stanford FCU, 13% of the credit union's 25,000 homebanking members aggregate non-SFCU accounts via the TekPortal eFinance Suite, offered by Teknowledge Corp., according to Sam Tuohey, vice president of information services at the $660-million CU.
And 12% of First Tech's 55,000 online members use MyOnlineCenter, with aggregation provided by Parsam Technologies' uMonitor platform, Wimmer said.
Members at First Tech can view their accounts via aggregation, and then move money between those accounts, Wimmer said. That synchronicity between aggregation and funds transfers helps fuel usage at First Tech, she said.
Important-Mission Critical
"We have also promoted our Funds Transfer Service, which allows members to transfer funds via an ACH process between First Tech and another institution for which they aggregate an account," she said.
The $1.5-billion CU has offered aggregation since 2001.
Stanford Federal's three-year old aggregation feature is "important, but not yet mission critical," said Tuohey.
Aggregation will gain steam when credit unions are able to make the most of their members' financial pictures, Tuohey continued.
"Members save; members borrow; the credit union keeps score of the transactions and balances," he explained. "We should be able to coordinate the sharing of our membership's combined wisdom about using, saving and spending money. This sort of cultural change will require a lot more than technology improvements, but aggregation is a short and necessary step to do it well."
CUJ Resources
For info on this story:
* First Tech CU at www.firsttechcu.com
* Pinnacle FCU at www.thinkpinnaclefirst.com
* Stanford FCU at www.sfcu.org
* Online Resources at www.orcc.com
* Teknowledge at www.teknowledge.com
* Parsam Technologies at www.umonitor.com
