NORTHFIELD, Ill. - The race to implement solutions that provide members the convenience of at-home banking may be a double-edged sword, as that same technology pushes members away from the branch and potential cross-selling opportunities.
But experts told Credit Union Journal the danger of passing on those new soltuions is even greater.
“If you’re not offering it, you run the risk of (members) being enticed away by the convenience of it,” warned Paul Rupple, director of marketing Digital Check. “It used to be more of an offensive mechanism, now it’s starting to cross the line into a defensive mechanism.”
Preventing Face-To-Face Interaction
Couriers making deposits for larger companies prevented face-to-face interaction from creating new account relationship opportunities, but many small business owners would handle that process themselves. With remote deposit taking hold, the need to make “bank runs” is greatly diminished.
“With larger businesses, they weren’t coming into the branches anyway,” Rupple said. “For smaller businesses it has probably reduced the need for daily branch visits, but there are still other opportunities to attract the customer to the branch.”
Businesses that use remote deposit for their accounts at credit unions are still accessible, notes Rupple, who encourages financial institutions to send representatives to the storefronts and headquarters with pitches to gain wallet share. Of course, few credit unions have enough resources to dedicate to that sort of enterprise, so many of Rupple’s clients are treating small businesses like retail customers and sending them cross-sell offers, encouraging them to come to the branch to discuss the possibilities.
“Since many banks and credit unions don’t have the staff to get out to every small business, what they will try to do is entice them to come into the branch by putting out offers and opportunities (so as) to have a shot to build the breadth and depth of the customer.”
Another way to lure members back to the brick and mortar is to provide friendly reminders in the online experience. David Peterson, senior vice president of Goldleaf Financial Solutions, Atlanta, noted that CUs can leverage software that can mine information on members and then provide them with an non-intrusive alert that they may want to renew their loans or take advantage of a new investment opportunity. The software could even go so far as to tell the members where the nearest branches are to their locations so they can come in.
“If we’re very smart in how we mine that data and we present you that information at a time that is best for you to receive that, then you would have that reaction ‘Wow that’s very cool that you told me about that,’” said Peterson.
In the end, the benefits far outweigh any potential costs, argues Dinesh Sheth, CEO of uMonitor, who noted that individuals who feel more comfortable with online banking would never join or stay with an institution that did not offer the service.
“Yes, there is some volume going online, but our way of looking at it is that those customers would not stay with (the CU) anyway if they did not offer what they want. I don’t think there is a cannibalization anywhere on anybody’s part,” Sheth said.
Out Of Sight, Out Of Mind
Simply allowing the CU to stay “out of sight and out of mind” in the minds of members is not an option, according to Peterson. “If you never go in your branch, you don’t make a connect with people.”
He added that many individuals, especially Generation Yers, are likely to consider alternatives if their relationship with an institution is strictly online. But CUs also have to be careful to ensure service at brick and mortar locations is as convenient and swift as it is over the Internet while still deepening the member relationship.
“If I’m banking online and its really efficient and I go into the branch and the service stinks... by going into the physical branch it could cause me to think that these guys don’t have their act together,” said Peterson. “All of that (technology) stuff is great, but at the end of the day, a good financial institution is going to make a connection.”(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
