SAN FRANCISCO-Online money management tools could act as a beacon for high-income, high-debt people who are looking for help during the financial fallout, according to a panel at the CUNA Technology Council (CTC) Summit.
"Whether they've lost their job or still have one, people have a dramatic heightened awareness of their finances," explained panelist Albert Ko, SVP-online financial management, Digital Insight, the Calabasas, Calif.-based Intuit company. "But most people have no roadmap and are looking to a financial institution for help."
That roadmap can come as a result of personal financial management (PFM) offerings Ko continued. PFM tools can gather data from all of a person's accounts across financial institutions online and aggregate them in one place: the CU's secure homebanking site. Once a member's entire financial picture is built, PFM allows the member to categorize spending and build a budget.
"PFM gives people a reason to log in regularly because they can see all their accounts and what's going up and down," said Ko.
Even better, the CU's financial planners can look at the member's financial picture to see how to "grow the relationship," he said. "PFM can underscore people with good incomes who have high credit card debt and are paying 20% on their balances, for example. Maybe you'd like to offer them a personal line of credit at 9%."
Ko spoke as part of a group of three PFM providers at a CTC Summit session titled "For Mature Audiences Only? A Panel Discussion on the Future of the Online Channel."
PFM is part of "Gen 2" online banking, according to panelist Andrew Taylor, CTO of Austin, Texas-based Jwaala. "Credit unions need to get off of their 'Gen 1' online banking system, which was about transactions, transfers and balances, and get on a 'Gen 2' system, which helps you develop relationships."
The "Gen 1" online channel is mature; electronic bill payment adoption is stagnant, agreed the panel moderator, Brian Warfel, CTC Executive Committee member and EVP-sales and service at $479-million Power Financial CU in Pembroke Pines, Fla. "How do we make the online channel more enticing for members?" he asked the panel.
Online banking isn't "cool" enough for members coming-of-age at Partners 1st FCU in Fort Wayne, Ind., added audience member Richard Gingery, VP-information systems at the $300-million CU. "Our online banking is provided by our core provider, and it really hasn't kept up. The next generation is thinking: 'If you don't have the technology we need, you're not even in the ball game.'"
The popularity of online PFM, like Wesabe and Mint, may be part of the answer, suggested the panel. And "because of the security question, credit unions are in the pole position to grab the lion's share of the people who want to adopt PFM," said Ko. "Financial institutions have better security and are more closely regulated," Taylor explained.
There's "tremendous" work to do in online banking, he continued. For instance, "you should be integrating online banking with other platforms. Single sign-on isn't good enough. Bring bill pay features directly into online banking."
And once members have built a budget using PFM, the CU can send automated "budget alerts" to let members know when they've exceeded a set percentage of their monthly budget, said Roger Amador, Jr., VP-credit union solutions at Q2 Software, Inc., in Austin, Texas.
CIOs can justify PFM costs by adding fees to selected pieces of the service, such as small business segments, and by making sure the service accommodates cross-sales and deposit- growth opportunities, said the panel.
It's time to spend on the online channel, the panel suggested. If you shut down online banking, you may lose 50% of your membership, but if you shut down a branch, you may only lose 10%, Taylor said.
"Think about where you should use your resources," said Amador. "Are going to go on Twitter or update your 10-year-old online banking platform?"
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Read more about how to gather and use member feedback at cujournal.com and searching the following bolded terms in the archive:
* Online Money Manager Reveals Secrets, Changes Lives-Nov. 24, 2008
* Financial Planning For The Masses-July 31, 2006
For info on this story:
www.digitalinslight.com, www.jwaala.com, www.q2software.com
