Los Angeles Firemen's CU is the first credit union to offer instant online account opening and funding capabilities via the CashEdge OpenNow FundNow solution.
"We're light years ahead of where we were with our website's previous downloadable PDF application," said George Kings, vice president, information services at LAFCU.
The move squarely positions the $700-million CU to break away from the limitations of its sole physical branch and expand its membership base electronically to firefighters across the Golden State.
OpenNow FundNow allows prospective LAFCU members to open and fund new accounts in real-time through the credit union's website. "We're removing the barriers from new membership processing to make it easier for members to join or switch financial institutions," Kings said.
About 20% of all new members apply via LAFCU's website since the CU began rolling out the online enrollment platform in April, he said.
"Our goal is to move new member applications to 50% online," Kings added. "Our members are highly likely to use online banking, bill pay and account openings, which bodes well for our plans for expansion throughout California."
Online services, including real-time online enrollment and funding, will be joined hand in hand with shared branching through service centers, contact centers and ATM networks to allow LAFCU to strengthen its presence in areas where it has no brick and mortar, Kings explained.
LAFCU members aren't necessarily tech-savvy, but they are drawn to the convenience of online services, said Kings. Nearly 40% of LAFCU's 21,500 members actively use online banking, and more than 40% of those members are also active bill pay and electronic statement users.
Contrast To Other CUs
In contrast, most credit unions are topping off with about a quarter of their members using homebanking, and about 5% using electronic bill pay, according to reports from Callahan & Associates.
In the first phase of the online enrollment initiative at LAFCU, prospective members complete an approximately 15-minute membership application online, during which a risk-based engine returns an instant decision.
However, the new account can't be used for about a day until the credit union completes back-end processes; the new member signs and returns a signature card; and funds are transferred into the new checking, savings, or money market account, Kings said.
LAFCU will launch the second phase of online enrollment during the next year, enabling the real-time, instant-access capabilities of the account enrollment and funding process. "All online and all real-time involves a pretty drastic business decision on our part," Kings added.
In addition, LAFCU will focus on cross-selling opportunities, such as prequalifying new members for loans, and integrating online enrollment with the CU's core processing system via web services.
Whereas the online enrollment solution helps to remove the geographic barrier to expanding the membership base, the credit union still has to figure out how to attract prospective members.
"We want to do a lot more in terms of conveying our value proposition to a prospective member," Kings said. "That's the real barrier to opening and funding an account."
LAFCU also uses the CashEdge TransferNow inter-institution funds transfer solution. More than 225 CUs use solutions from the CashEdge credit union suite, which also includes email payments and account aggregation.
CUJ Resources
For additional information on this story:
* Los Angeles Firemen's CU www.lafirecu.org
* CashEdge at www.cashedge.com
