The latest breed of e-commerce tools are invigorating the Internet channel, according to Brian Siegel, vice president of e-commerce at Wescom Credit Union.
Even though some web tools have been hyped or are still awaiting long-predicted growth (wireless services, smart cards for example), new tools such as member-directed transfers and account alerts are worth investing in, Siegel said.
Moreover, there's still gold in the Internet hills, he said.
"Your online members may be your high-value members. If they are, make sure they can do everything they want through your Internet channel," explained Siegel.
A Look At The Numbers
And there's a good chance that high-value members are online members. According to Callahan and Associates, Washington, D.C., online members are looking more towards their credit union's website as their primary service channel. Analysts estimate that two- thirds of Americans use the web and more than 90% of college students use the Internet weekly.
"Those are the people who are going to need car loans," Siegel added. "And without exception, our online members use more products than our membership in general. That's especially true for bill pay users."
Siegel mentioned some new services that are attracting online members. Member-directed ACH transfers, or account-to-account (A2A) transfers, have caught on quickly at Wescom since the service was launched in December 2000, said Siegel. Usage increased by 90% in 2002, up from more than 22,000 transfers for $18-million in 2001.
Boston-based research firm Celent Communications confirms that A2A will no longer be an optional service for financial institutions online, but an essential.
The $2.3-billion Wescom Credit Union approached A2A with trepidation, nonetheless. "We were concerned that A2A would produce a net outflow of funds," Siegel explained. "But we're seeing a 50-50 flow of money coming in and going out.
"That means members are using Wescom as the hub to manage their financial relationships," he concluded.
Siegel also has high hopes for P2P, or person-to-person payments, in allowing members to send money via email. "There is a place for credit unions in P2P," he said, "and that's in the ATM networks. Instead of A2A, P2P payments could go real-time through the ATM networks."
"We're going to see P2P take off," he said.
Members are already interested in Wescom's account alerts service. About 900 members have signed up since the service was first offered in February. The CU offers four alert types- custom messages, electronic deposit acknowledgments, account balances, and cleared checks -which can be sent to five e-mail addresses.
An online branch isn't complete without real-time services, Siegel continued. "Online membership to me is about real-time account openings, with real-time fraud check and instant ordering of plastics and checks."
Checking For Fraud
New members at Wescom's site can be instantly cleared for membership via an early-warning fraud detection system and consumer debit base, he said. After members complete the e-sign-enabled disclosure form, ID and signature cards are sent to the member via the Postal Service.
The account opening process is secure, as is instant decisioning through the online lending platform, according to Siegel. "We've had no issues with stolen identity."
The 180,000-member credit union offers a suite of in-house e- commerce tools, not only to its members, but also to other credit unions througha CUSO, Wescom IDS, a partnership between Wescom CU and Integrated Data Systems.