PEMBROKE PINES, Fla. - Credit unions will use the web this year to satisfy members’ need for speed, to bring new members into the fold, to save money, and wrestle eyeballs away from the big banks, according to an exclusive Credit Union Journal roundtable with the CUNA Technology Council (CTC).
“We have some of the necessary technology in place, but until the industry as a whole creates awareness among consumers, we’re not really going to go anywhere,” said Brian Warfel, CTC Executive Committee chair and svp-sales and service at $465-million Power Financial CU.
In 2008, these information technology (IT) managers are working to serve current members–and to set the stage for the day when credit unions get their big break.
“One of the biggest needs this year is for speed and real-time information,” said Gail Koehler, vice chair of the CTC Executive Committee and vp-technology and retail delivery at $492-million Purdue Employees FCU (PEFCU) in West Lafayette, Ind.
“Members are becoming really impatient, so we are finding ways to get their financial information to pop and to load faster,” she said.
During the roundtable, in which the CTC Executive Committee identified technology trends for their credit unions in 2008, the council didn’t dwell on the need for speed, however, or on ongoing challenges such as information security. Instead, the conversation turned toward the untapped possibilities waiting on the World Wide Web:
TREND NO. 1
The World Wide-Open Web
Credit unions have only just begun to mine the opportunities of the growing Web, said the CTC. Opportunities include mobile banking and Web 2.0, which are new ventures for most credit unions in 2008. (See related story, page 17.)
Meanwhile, other online services have been around for awhile and need to be exploited, such as online banking, e-statements, e-notices, email marketing and remote deposits, said the roundtable.
The online branch should be separated from the physical branch and envisioned as a separate entity, according to Warfel and Koehler.
“Our next leap is to move the online branch from a support function to a profit function,” explained Warfel. “Anyone who opens an account online will become part of the online branch as opposed to the physical branch.”
Mobile banking will be the talk of the town for many credit unions in 2008, though Kansas City, Mo.-based Mazuma CU has offered the service for seven years, said Gordon Gregory, vp-technology at the $342-million CU and secretary and treasurer for the CTC Executive Committee.
“We made a bet on a technology that still hasn’t fully arrived,” said Gregory. “But we see it as the future, and this year we intend to start really selling it.”
Jackie Buchanan, CIO at $600-million T&C Federal Credit Union in Bloomfield Hill, Mich. and CTC Executive Committee member, agreed that mobile banking is a priority: “There are so many more Web-enabled phones now, and members want to take advantage of that added functionality and get that instant gratification.”
Power Financial will push e-statements and lean on e-marketing, said Warfel. “To reduce expenses, we’re going to move over as many people to e-statements as we can. And we’ll be doing a lot more e-mail marketing because it’s less expensive than direct marketing.”
Whereas e-statements have been available for at least five years in the credit union industry, only about 50% of credit unions offer the option and only about 50% of members use it, according to the Callahan and Associates’ 2007 Credit Union Technology Survey.
At T&C, members currently receive e-statements by default, according to Buchanan.
“Members need to deliberately ask if they want us to send them paper statements. In 2008, members will also be able to get notices electronically,” Buchanan said.
T&C also hopes to allow members to open sub-accounts and certificates as a self-service option behind the online banking login, Buchanan said.
TREND NO. 2
Leveraging Data Analytics
In order for the online branch to hold its own, credit unions will need to perfect their data mining and analysis capabilities, said Koehler.
“We need to extend beyond the generic age and income data that comes out of MCIF to figure out the individual needs of each segment of our membership,” she said.
“We’re still not getting the mileage out of our MRM system that we want to,” agreed Gregory.
Meanwhile, Power Financial will bolster MCIF by tying the system into the accounting application, said Warfel. “The goal is to have true, real-time profitability measurements of the online branch and of the physical branches. We’ve all had huge physical branch expansions that just didn’t pay off.”
TREND NO. 3
Automating Tasks
More behind-the-scenes tasks need to be automated; it’s a good way to save money, according to Buchanan.
“In this economic climate, we need to find efficiencies everywhere we can,” said Buchanan.
T&C will use data analytics to automatically prompt sales cold-calls, while Power Financial will automate the reverse engineering of loans to identify where the CU can offer a member better rates.
TREND NO. 4
Not Your Father’s ATM
Many credit unions are installing “beefed-up” ATMs, machines that will accept a member’s check, create an image for electronic settlement and instantly spit out a copy of the image as a receipt to the member, said Koehler.
TREND NO. 5
Revamping Role Of IT
PEFCU has reorganized its IT unit two times in the past four years to keep up with changes in IT and business environments, including demands for project management skills and Technical Support, Service-Oriented Architecture (SOA) and computer virtualization, said Koehler.
As such, Koehler posed a question as food for thought: “What roles within your IT shops will be the most important in order to keep up with Technology Trends over the next couple of years?”
MORE
Read more about CU technology and business trends at cujournal.com and search the following bolded terms in the archive:
The Year Ahead 2008
Byte Christmas
As Web-Based Services Grow, CUs Embracing A ‘Hybrid’
Gartner: Five Major ‘Discontinuities’ Combining To Effect IT
For info on this story:
* www.cunatechnologycouncil.org
* www.mazuma.org
* www.powerfi.org
* www.purdueefcu.com
* www.tcfcu.org
