No one would argue that life is much different in the United States from 20, 10, or even five years ago. We have become an increasingly mobile and transient society, thanks in large part to technology. People are no longer confined to cities, or even towns, where they have historically been dependent on a close-knit network of merchants and service providers for their essential needs. They can move farther, faster and access information and goods through a vast variety of channels. This includes financial services.
Mega-banks and large regional financial institutions have constructed spider webs of branches, ATMs and kiosks across the country to meet the needs of their geographically expanding client base. However, credit unions, by nature, are generally locally focused, lacking the same capacity or reach as their larger counterparts. Traditionally, credit union members, particularly non-direct deposit account members, have gone to a local, physical location-either a branch or kiosk-o do their financial business.
So how do credit unions serve the needs of their members when they travel or re-locate out of the local area? Most credit unions can offer some form of home banking which will allow members to perform rudimentary banking functions such as deposits, withdrawals, and transfers of funds. But what happens when a loan or other document needs to be delivered signed and returned? This has been a stumbling block for some time and credit unions have been slow to realize the need for an adequate solution to the problem.
Currently, documents are mailed or overnighted to members. The member then signs the document and returns it, which is both expensive and slow. Some credit unions are faxing or e-mailing the documents, which is arguably worse. None of these methods of document transfer are particularly secure and can be easily compromised. Unauthorized individuals can open mail and e-mails can be intercepted. Additionally, faxes are generally sent to public areas where others can easily view them. These methods also cause a time delay in the execution of documents allowing the members time during which they can search for alternate sources of funding. The biggest reason credit unions lose business to web-based lenders has to do with their lack of resources available to deliver loan documents and close the loan in an immediate fashion.
Credit unions need to think outside of the bricks and mortar. If a credit union builds a web-based system, members will be able to interact with them from anywhere, at any time. The member's computer becomes a "virtual kiosk." Technology now exists that also allows credit unions and their members to remotely execute documents. For example, if a member needs a loan and is either living in an area removed from the credit union, on a trip out of the area, or they have been thinking about getting a loan and can't sleep, they can get on the computer, log into the credit union's website, apply for a loan, then subsequently, sign it, submit it and go back to sleep. There is no longer a need to go into the credit union. The credit union and all of its services will be available to the member 24/7.
This web-based method of document delivery has benefits not only for the member, but for the credit union as well. By using this method, the credit union can retain the party as an active member for non-direct deposit services, even though they are not in the proximity of the credit union.
And, with the ability to get a signature remotely on loan documents, the credit union can close the deal immediately, denying other lenders a crack at the borrower. They will save time as well as the cost of sending documents through overnight delivery or mail. Web-based document delivery allows the credit union to remain a source for all of the loan needs of members. It also allows them to give their members instant gratification leading to an overall improved level of satisfaction.
The credit union industry is looking to improve member service levels through remote document delivery methods. Credit unions need the ability to capture their member's signature remotely and send the document back and forth securely. Our early indication is that this technology is not only being accepted, but anticipated.
Web-based document delivery is the wave of the very near future and shortly, it will dominate the marketplace. Home banking will play a large role in the expansion of services, because all of the functionality is available with a single sign-on. Products that have been engineered to be compatible with the credit union's home banking system will be the real catalysts for this shift. Every action that members perform should be available through their home banking link. There will always be reasons to go into a branch, but your members are mobile. Are you moving with them?
Chuck Klein is CEO of Integrated Media Management of Linden, N.J.
