As Postage Rises, So Does Interest In E-Deliveries
The latest postal rate increase has triggered more interest in electronic statement delivery, which can cut a credit union's mailing costs by as much as 80%, according to one company.
Mark Schulte, president and CEO of Lasertec Inc., of Sterling Heights, Mich., said more credit unions have expressed an interest in the service in the last several months since the third postage hike since January 2000.
"In speaking to new credit unions, we are definitely using it to our advantage," Schulte said, noting that the postage increase has been incorporated into its marketing of electronic statement delivery. "And we are seeing business go up consistently."
Lasertec Inc, which has been providing hard copy statement delivery for CUs since 1984, added the electronic method almost two years ago, Schulte said.
"We've probably got 50 out of our 200 (credit union clients) actively using it," he said. "And, I'd say we are getting five to six (new clients) a month. It's definitely taking off."
Considering the benefits, Schulte said, he's not surprised. "We think it's a pretty good product," he offered. "There are no start-up costs. There's no hardware or software investment. And it doesn't matter what data system they are using."
Lastertec maintains a database for its clients, and for those members who agree to receive their statements electronically, it simply sends them via the Internet. The remainder are printed and mailed.
"Credit unions inform members (via e-mail) that their statement is ready and offer links to their website," he said, noting that it takes an account number and corresponding password to access the statements, which are protected behind "secure firewalls."
Typically, electronic statements are available within 24 hours after the credit union sends the information to Lasertec.
The cost to credit unions is minimal compared to the traditional method, Schulte said, explaining that credit unions are charged per image with volume a factor in the rate.
"Typically, the savings is up to 80% of their costs," he said. "It's a straight printing fee." Costs for postage, envelopes and paper are eliminated, he said.
Steve Moseley, CFO at MidFlorida FCU in Lakeland, Fla., said he's been pleased with the service thus far and especially likes the fact the credit union didn't incur a start-up fee.
"We feel it's sort of a longer term benefit to our credit union," he said, acknowledging it will take some time before most of MFFCU's 85,000 members opt for electronic delivery.
Since the $525-million MidFlorida started offering e-statements through Lasertec nearly two years ago, 6,500 of its 40,000 checking account holders are receiving the service.
"We originally offered it as a competitive advantage first and a cost savings second," Moseley said, adding that the credit union offers free home banking to those members who receive their statements electronically.
And, a recent promotion offers an additional $5 dollar incentive, he said, noting that it is informing members of the service via its newsletter, statement stuffers, home banking page and new member orientations.
Once they access their statements, he said, they could save it to view later or print.
Schulte said statements are stored for 60 days at no additional cost to the CU. Some do prefer to pay extra fees to have their members statements archived for longer periods of time, he said.