Being First To Market Paying Off
Credit Union: ESL FCU
Nominated by: Digital Insight, Calabassas, Calif.
Nominated For: Penetration On Home Banking Bill Pay
Credit unions have always led the way in terms of consumer service, but few have beaten the big banks to market with new technology. ESL Federal Credit Union, Rochester, N.Y., is among the exceptions to that rule.
The $2.5-billion credit union has offered Internet banking since October 1997, says Mike Armbruster, ESL's senior vice president and chief information officer. More than 50,000 of the credit union's 250,000 members transact business electronically, and 17,000 use the credit union's bill payment services through the support of Digital Insight, Armbruster says.
However, the most recent addition to that suite of services has caused the industry, if not the members, to sit up and take notice.
ESL members can now transfer funds between institutions-to and from their credit union accounts-via the same automated clearing house network the institution itself uses. The service, rolled out in July, has already attracted several hundred users without the benefit of promotion.
"Citibank just announced a rollout of the same service with their vendors," says Armbruster. "It's nice when we can beat someone like that to market."
The funds transfer is made possible with the combined services of ESL, Digital Insight and Cash Edge, New York, whose software facilitates funds transfers, says Armbruster. The service is executed through ESL's Internet banking program and funds take three business days to clear, he says.
The cash transfer service is one more feature of the growing suite of services that bind members closer to ESL, according to Armbruster. "It makes it easier for them to bring money to the credit union."
Internet transactions, launched six years ago, grew 28% last year alone, Armbruster reports. Members can carry most if not all transactions online, and the hours for on-line services extend even beyond those of the credit union's telephone center.
At present, members can access service center staff by phone as late as 9 p.m. on weeknights. Through Internet banking, staff are available to answer questions through the system's on-line "chat" feature as late as 11 p.m., says Armburster.
Staff members on chat duty do so from PCs in their homes, he says.
ESL has done limited in-branch promotional efforts to migrate clients to the Internet. Sales contests are periodically held among teller staff members and members are paid $1 to sit through service demos. Those willing to try the service for 30 days are given $10, says Armbruster.
"We've seen an awful lot of organic growth of this service," Armburster says.
Online chat sessions average between 2,000 and 2,500 per month. "The extended hours make it possible to chat with members as far away as China," Armbruster says.
Although the credit union hasn't launched a cost-benefit analysis of the process, officials already know that one service representative can assist as many as six members on line at one time, he says.
"We've had almost no falloff in five years and we continue to see strong growth and continued adaptation by users," Armbruster says.