Try to find another credit union with a higher electronic transaction rate than Atlantic Credit Union.
Last year, Atlantic CU's 28,000 members performed 92% of all their transactions electronically, using Atlantic's ATM and check cards, audio-response systems, Internet banking and Bill Payer, according to David Reis, director of technology.
That electronic transaction rate is so good that Reis said he doesn't want to push it any higher. "We have a pretty good penetration rate right now. From an economic standpoint anything higher would cost us more than benefit us. It's the bell curve idea. If you add a second processor to a computer you don't get double the speed, you get 1.75 times the speed. The benefit starts to decrease."
Member-Retention Strategy
This electronic obsession is part of Atlantic CU's member-retention strategy. "Our electronic hours are far more convenient than our manual hours," Reis explained. "Not only can members use us all day everyday, but if they permanently move out of our region, they will still use us because they're accustomed to electronic services."
Though not all of its 200 SEGs center around technology, Atlantic CU targets technology groups, Reis said. But techie-SEGs are only partly responsible for Atlantic's electronic success.
In 1998, 86% of Atlantic CU's transactions were of the non-human nature. "That's when we put the push on to go to a real time environment," Reis said.
By giving members instantly updated access to their funds, the real-time environment helped to drive the electronic transaction rate to its current high. "Members can go to any of our delivery channels and find out what funds they have," said Reis. "Any transaction shows up right away."
Members began to become dependent on the real-time convenience and accuracy. "Our Internet banking product is unique," said Reis, adding that members can update their Quicken or Money files with real-time data streams as well.
As further incentive, Atlantic CU began offering its Internet Bill Payer service at no charge to its members. As members switched to paying their bills online, the electronic transaction rate rose.
"We look at Bill Payer as a sticky product," Reis offered. "If members take the time to set up with Bill Payer, they're far less likely to switch to another financial institution later."
Of course, the credit union, with $196-million in assets, is getting more than member retention out of the deal. Cost-savings to a credit union due to electronic transactions are well-documented. Studies show that a CU typically spends less than a dollar per electronic transaction, which is about $1.50 less than a manual transaction. "We have not done a detailed analysis of this type in several years," added Reis.
A secret to Atlantic CU's inhuman success lies in guiding members to the electronic arena the minute they enroll with ACU. "Essentially we really push direct deposit when you set up an account here," Reis explained. "If members deposit money electronically, then they want to withdraw it in the same fashion."
Reis said 50% of Atlantic CU's members are enrolled in direct deposit.
In addition, new Atlantic CU members receive an umbrella of free electronic services material, such as ATM and check cards, when they enroll. "Then we can more easily give them Internet banking later," Reis said.
One-Quarter Using Web
About 25% of Atlantic CU's members are enrolled in Internet banking, while 17% of those are using Bill Payer online. Reis believes that electronic transactions have greatly reduced fraud as well. Atlantic CU has surpassed its .7% delinquency ratio goal, settling at about .5%.
With a near-perfect electronic transaction rate, it would seem that Atlantic has nowhere to go. But Reis said the hard part is still ahead.
"It's easier to get to your goal than it is to stay there," said Reis. "There's growing competition in the electronic services area. We have to constantly add new services." Up next: wireless banking and online lending.
