Whatever became of the once-hot trend toward offering online money management through the CU's own site? And given the market, are plans for an 09 or 10 launch of such a service ill advised?
Dinesh Sheth, CEO, uMonitor, Memphis, Tenn.
In this market, all financial institutions are focused back to the basics of being a sound institution. Online money management is a good feature that will gradually gain traction, but not in the next couple years. In most cases, the service is only leveraged by about 5% of a credit union's members. Credit unions that already have online money management services available should continue offering it, but those who do not should focus on growing in areas that reach a broader range of members and offer a more immediate return. Credit unions need to focus on opportunities that will help them deliver a delightful customer experience while still improving productivity and profitability.
Ron Bergamesca, EVP & GM, Community Bank & Credit Union Services, Online Resources Corp., Chantilly, Va.
Online money management, or personal financial management (PFM), is an excellent complement to a credit union's online banking platform, and it should be on your list of enhancements this year or next. However, CUs should not make PFM the centerpiece of their online offerings.
Especially today when money is tight for everyone, providing members an online tool to help them better track and manage their budgets makes a lot of sense. Our experience providing an integrated PFM service since 2004 shows that for those consumers who are comfortable with online bill payment, PFM can be a very effective tool.
What is important to keep in mind is that those members who adopt this type of service will only be a sub-set of your online bill payers. Learning to transact online is a pre-requisite to more sophisticated functions. If you do not yet have a critical mass of online bill payers, your CU would best be served by building adoption first.
PFM is not going away. Those CUs that invest in educating their members on the benefits bill payment now will have built the foundation for the most successful PFM launches in the near future.
Terry Treadwell, Stogniew & Associates, Palm Harbor, Fla.
I'll wager that online money management continues to be a hot area especially as member demographics change.
For the "typical" American, having accounts at numerous financial institutions, money management often proves difficult using pen and paper. When aggregated information is logically presented, people can tune in to their unique "Money Management 101" situation. For example if I have debt overload, my wake-up call arrives when I realize my monthly budget percentage going toward debt payments. So, providing aggregated credit card statements, checking account balances, and other financial data online absolutely makes sense.
The early account aggregation technology entrants Yodlee and CashEdge today have an impressive list of financial institution clients. And the last two years has brought a new stable of players-check out Mint, Buxfer, Geezeo and Wesabe. In addition to financial analysis tools, users can post financial details anonymously and interact with others for advice. Text messaging (warning users about unusual spending or upcoming bill payments) as well as mobile access through iPhone is available as well.
Interestingly, Mint.com claims to have 600,000 users with new member signups reported as tripling since the September financial crisis presenting a seemingly opportune time for credit unions to re-evaluate this technology. Not surprisingly, the average user age is 30. In short if targeting younger members is a key strategy, you definitely want to put this on your "technology to evaluate" project list!
Doug True, president, FORUM Solutions, Indianapolis
With consumers now aspiring to achieve an improvement in the area of frugality, I believe any tool that you can provide your membership to aid in achieving this goal will be considered worthwhile. Likely the first step to become thriftier will be to better understand where your money is coming and going.
Two years ago here at FORUM, we participated in an ethnographic study with Design Concepts and the Filene Research Institute that included us going to some of our members' homes and witnessing how they manage their financial lives.
One of the significant findings was that each member has a unique way to accomplish this task. With this in mind, we are working on allowing members to tag transactions in our internally developed internet banking solution. This promotes awareness of how they are spending their money while at the same time allowing them to adhere to their own system of managing the process.
We will then be able to design tools based on member input on how they want to use the data to improve their financial lives. It can be as simple or complex as they desire.
John San Filippo, Marketing Manager, Symitar, San Diego
Desktop personal financial management (PFM) applications like Quicken and MS Money have gained only lukewarm acceptance, despite years in the marketplace. Online PFM, while not as robust as its desktop counterpart, offers obvious cost and convenience benefits.
However, I believe it remains to be seen whether this really is the next "killer app." At this point, it could go the way of mobile banking and really take off-or it could go the way of account aggregation and drop off the radar completely.
As with any product offering, the key is looking at member demand. Credit unions with an especially young, technologically savvy membership may find many members want such a service.
That said, my feeling is that for most credit unions, it's probably best to wait until the market matures a little more. 2010 just may be the year, but we'll need to wait a little longer to see.
I believe that in terms of the self-service channel, the smart money is investing now in mobile banking.
