WICHITA FALLS, Texas-Big banks are playing the PFM game to steal business from CUs.
The game goes something like this: the bank offers personal financial management (PFM) software to the customer, the customer tracks external accounts in the software, including CU accounts. Then, the bank peeks into the external account data in order to identify products and rates to beat.
"Bank of America is sending your members referrals that say they can give a loan at a lesser rate," suggested Kevin Scott, COO at $97-million Texoma CU here. "Your member is being actively marketed by other financial institutions from PFM info."
But two can play that game, Scott continued. In November, Texoma rolled out PFM provided by Provo, Utah-based MoneyDesktop. "With MoneyDesktop, I've broken the bank referral cycle."
Now, Texoma members can pull all their financial accounts and transactions into the credit union's PFM, he said. "Most people have nine different relationships with financial institutions and a choice of PFM software. If our members are using our PFM, we've because so much more sticky. Members have entered all their FI credentials into our PFM, and we're providing a free financial planning service."
MoneyDesktop is integrated with Texoma's core system to deliver real-time transaction updates. Integration with the CU's online and mobile banking software ensures a cohesive virtual experience, Scott added. "We haven't created an online Frankenstein monster for our members with multiple logins and designs."
The MoneyDesktop cross-selling platform and CEO dashboard allow credit unions to target members with online banking pop-ups offering better rates or services than external accounts, according to MoneyDesktop. Texoma hasn't yet taken advantage of the sales referral tools, Scott said.
Members Getting Used To Product
Though Cleveland Police Credit Union rolled out MoneyDesktop more than a year ago, the $31-million CU also is holding off on employing the marketing tools, said Regina Kelley, assistant manager at the of Cleveland, Ohio-based CU. "We're allowing members time to get used to using the product before throwing marketing pitches at them."
Cleveland Police CU members apparently are giving PFM a try. Nearly 65% of online banking members are signed up for MoneyDesktop, said Kelley. "The terrific adoption rate tells us many of our members recognize they need to take advantage of this PFM."
MoneyDesktop meets Texoma's core values, said Scott. "We believe in budgeting, and that people who plan well are financially sound and prepared for emergencies." MoneyDesktop automatically creates customizable budgets based on spending history, income, debts and expenses.
Sunset Science Park FCU of Portlant, Ore., offers MoneyDesktop because "members want to get back to basics, knowing where their money is going and budgeting," said Judy Makela, advisor and former president at the $34-million CU. Nearly 40% of the online membership actively uses MoneyDesktop, she said.
To facilitate budgeting, MoneyDesktop operates on a "virtual envelope" concept, Scott explained. "You can set aside $400 to eat out, and the software assigns your transactions automatically to the correct category in real time." As they spend, members can check their shrinking budget envelopes in Texoma's mobile banking application. MoneyDesktop sends alerts before spending goes over budget.
"What I really love is that couples can log in to the same account and get on the same page with their budgeting and spending," Scott said. "It brings families together."
The budgeting graphics are "simple, brilliant and dynamic," he continued. You can drill down from the category level to the transaction level."
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PFM Tool Has More Than Just Member Appeal-May 23, 2011
