Bank Shots: Two Texas CUs Say Rivals Have Nothing On Them

Big bank websites, which continue to attract national attention for delivering enhanced usability and utility, don't hold a candle to their credit union counterparts.

That's according to two of the nation's largest CUs, $1.2-billion Community CU and $3-billion Security Service FCU, who said that big banks could learn a thing or two about Internet functionality from CUs.

Financial services consultants and researchers Lafferty Group, based in London, and Waltham, Mass.-based Gomez, Inc., which recently published its Q2 Internet Banking Scorecard, regularly sing the praises of banking dot-coms like Wells Fargo and American Express.

Credit unions, however, seem to be routinely ignored.

"Gomez would be in for a rude awakening if they included credit unions in their rankings," said Julie Mecham, web developer at Community CU.

Functionality such as inter-financial institution (FI) ACH transfers and online deposit statement archives, which Gomez said are part of a "torrid pace of website enhancements," at large banks, has been a success at Community CU for quite a while, Mecham said.

"We've had inter-FI transfers up and running for about six months, and we're even making efforts to improve the timeliness of transfers," she continued.

And members seem to respond well to the sites - online banking penetration is well over 30% at both credit unions.

In contrast, online users at Bank of America, which has more online users than any other retail financial institution worldwide, make up only 20% of its customer base, according to Bank Technology News, an affiliate of The Credit Union Journal.

In fact, if you ask Community and Security Service Federal Credit Unions, credit unions seem to be setting the pace for web functionality in the online banking space.

Said Mecham, who is responsible for 99% of Community CU's site development, "It seems to me that large banks may be learning from us."

And Stanford Federal, First Tech, and Digital Federal credit unions' sites provide inspiration for Security Service Federal Credit Union, said John Worthington, senior vice president of corporate communications at the 485,000-member credit union.

Security Service, the nation's twelfth-largest credit union, itself was a pioneer, being the first local financial institution to launch a website in 1996 and then online banking in 1997.

Conversely, large banks just aren't flexible enough to be Web pioneers, according to Wendi Costlow, vice president of marketing at 210,000-member Community CU.

"I came from a banking environment," Costlow said. "Functionality that takes credit unions a year to implement could take large banks two or three years. Credit unions can be quicker to move on projects because there's not as much bureaucracy.

"And yet Community Credit Union is big enough that we still have the bottom-line asset dollars to make the commitment to try new things," she added.

Web functionality isn't really a matter of being bleeding-edge, said Worthington at Security Service FCU. New services are implemented depending on member demand, he said. As a result, Security Service FCU doesn't provide hot inter-FI and P2P ACH transfer capabilities.

"We pulse our members to see what type of functionality they're looking for. ACH just isn't high on their hit list."