Stars Of Online Penetration Share Their Strategies

While the number of online users at credit unions is miniscule compared to those at North America's big banks, penetration rates at CUs expose a more substantial muscle.

Bank of America, with $609 billion in assets and 3.5 million online users, also dwarfs many other financial institutions in terms of number of online users, according to rankings by Bank Technology News, an affiliate of The Credit Union Journal.

However, the No. 1 online institution in terms of users reports just a 20% penetration rate.

That's nothing compared to Beaverton, Ore.-based First Tech Credit Union, with a penetration rate of 60%, according to Michael Scheuerman, chief technology officer. Furthermore, that percentage represents active users.

"I want to push that up to the 75% range," Scheuerman added.

First Tech has 83,000 members and $800-million in assets and has the 36th most online users among financial institutions in North America. That puts First Tech as the seventh largest credit union in terms of online users.

Other CUs, including No. 1 ranked CU Navy Federal, Pennsylvania State Employees' CU, and Community CU, also boast strong penetration rates and were slotted within the top 35 financial institutions in the ranking.

To share their success, the CUs revealed their online recruitment strategies to The Credit Union Journal.

"How can you manage your accounts when you're deployed on a ship?" posed Loren Moeller, public relations specialist at Merrifield, Va.-based Navy FCU, "And what if your members move?"

Navy FCU, ranked as twelfth in online users of all financial institutions and first among credit unions, uses Internet banking to cater to its highly transient membership. The $14-billion CU, with more than 620,000 online users, has a penetration rate of about 30%.

"Internet banking is a competitive imperative," Moeller said. "We're trying to always add new features and make Internet banking more relevant to members. But you have to see the purpose of new features. You may not build something that's necessarily feeding members' needs."

Aim For Full Self-Service Online

Though Harrisburg-based Pennsylvania State Employees' CU (PSECU) doesn't serve a solely high- tech crowd, most members "will never enter a branch," said David Jamison, electronic services manager.

The $1.6-billion CU has only two branches and consequently has made electronic access a priority. "We allow self-service as much as possible," Jamison said.

With 268,000 members and 50,000 active online users, PSECU ranked 30th of all financial institutions and fifth of CUs in the Bank Technology News report.

"If a teller can provide a service on the phone, why can't a member do it online?" said Jamison. "We're moving toward full self-service over the Internet."

New capabilities include online certificates, dividend management, and maturity instructions, said Jamison. "In the next few weeks, we'll be releasing check reorders online."

Sell It

The Plano, Texas-based Community CU, with nearly $1-billion in assets and 45,000 members, enjoys a 25% penetration rate of online users. Community was 35th in the overall rankings and has the 6th most online users of all CUs.

"We really do rely on front-line staff when they sell new accounts to talk about the convenience of home banking," said Wendi Costlow, vice president of marketing at Community. "Our call centers are quick to let members know they can order checks and do other things at our site."

Costlow said CCU uses opt-in e-mails to build relationships with members.

"We drive them out of home banking and into our site to take advantage of other services," she explained. "We're the only institution in the Dallas area that has online check images. We're competition for banks because our services are just as valuable."

Build It And They Will Come

"We don't have a formal strategy," said Jerry Thompson, senior vice president and CIO at CU of Texas. But CU of Texas has a 20% penetration rate, with almost 21,000 online users.

"We just tell people about the website," Thompson said. The $ 1-billion CU is headquartered in Dallas.