Money Management: The New Face of Online Banking

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MADISON, Wis.-"Old school" online banking lets members open accounts, pay bills or transfer funds. The "new" online banking also shows members their spending trends and budgets when they land on the home page.

"If you're not on track to implement money management in the next year or so, you're going to drop behind," suggested Eric Bangerter, director, Internet services at UW Credit Union here. "People are going to expect you to offer these tools. We call our tools Money Management, but it's really the new online banking."

The $1.2-billion UWCU is so intent on controlling the member experience that it built Money Management in-house, Bangerter said. "I don't want a vendor telling me what I can or can't do."

Instead of relegating PFM to a separate tab in Internet banking, UWCU built the features into the existing account history page. Thus, when a member logs into the main "Account Summary" page and clicks on "Account History," each transaction appears not only with amount, payee and posted or pending date, but also with a spending category.

'In Your Face' Money Management
"Money Management is built right into your account history," continued Bangerter. "It's in your face."

Future versions will push Money Management further into the member's view: spending charts and budgeting graphics will appear directly upon log-in on the Account Summary page, he said.

"The functionality will surface all the way to the top of Web Branch," he explained. "If you're concerned about your Starbucks habit, you'll see your Starbucks spending and budget when you log in."

Current Money Management features include transaction categorization; searches; and UWCU checking, credit and savings account reports, said Bangerter. UWCU isn't sure yet if members should be permitted to aggregate data from other financial institutions under the UWCU umbrella, he said. "Why would a member use our credit card if we allow them to import data from their credit card account at another institution?"

CUs and vendors have told Credit Union Journal that the timing is right for PFM because the economy has made members more budget-conscious. However, CUs report that less than 30% of online members are using the tools to manage their money.

At UWCU, a little more than one-third of online members have clicked on money management tools, said Bangerter. About 50% of the membership uses online banking.

But clicking may not be only sign of engagement, he added. "As we continue to blur the lines between money management and online banking, we won't really know if members are specifically using money management." For example, a member might appreciate that automated chart of Starbucks spending delivered to his or her Account Summary page, but UWCU may never know that the member looked at the chart.

Challenge: Getting Members To Use It
Still, UWCU would like to get more members to use the free money-management features, which also include e-mail or SMS-text alerts on spending and deposits. "Right now, some people have trouble seeing the value in the tools, or it's too much work for people to figure out how to use them," Bangerter said. "We want to make the tools more transparent and push the data to the surface of online banking so that members don't have to do it themselves."

The CU will build alert and budgeting defaults to give members a head-start on creating their own alerts and budgets, said Bangerter. UWCU will also offer seminars on money management world.

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