Why One CU Is Prepping For Mobile Onslaught
VERNON HILLS, Ill.-Members of Baxter Credit Union are raring to bank on the go-nearly 15% of all online members actively use mobile banking. But that remarkable usage is just a whisper of what will become a roar, according to Jeff Johnson, SVP-CIO of IT at the CU.
Mobile banking users are like gold to the $1.4-billion CU. They use more products and services than members who don't use mobile, Johnson said.
Mobile bankers average 5.1 products per member, he said. Nearly 90% of mobile bankers actively use checking, and nearly 30% have a car loan. In contrast, non-users have 3.17 products per member. About 40% use checking, while 15% have a car loan.
It's unlikely that mobile banking encourages members to use more products and services-but it should, Johnson continued.
"Mobile banking should enable you to do more than just transactions," he said. Since mobile users almost always have their mobile devices at hand, mobile banking should do something different from Internet banking. "We want mobile to help generate CD sales or assist you in getting a car loan. That's the coup de grâce."
Baxter has ground to cover before mobile can do that. Later this year, the CU will expand its in-house mobile technology from the current Wireless Application Protocol (WAP) to a third-party "triple threat" platform that includes WAP, a downloadable application, SMS text-and the capacity to help Baxter grow loans and shares. Johnson said.
Built by Baxter in 2008, the current WAP version is an experiment, he explained. "We wanted to start out with something really cheap to see if it caught on. When it did, we realized we definitely needed to take it to the next level." Baxter's WAP mobile platform was built for less than $20,000 and primarily allows for high-volume transactions such as balance checking and funds transfers, he said.
The "triple threat" platform should appeal to an array of mobile users as Baxter works to increase mobile adoption, said Johnson. "We are looking to expand mobile well beyond the 6400 members who use it now."
Marketing is a vital piece of the expansion plan, he said. "We didn't market mobile at first, and there was no usage. But every time we run a campaign now, we see hockey-stick increases in usage."
Throughout May 2009, for example, Baxter flashed a website banner advertising mobile, said Scott Schmidt, e-services manager at the CU. Traffic to the mobile site spiked to more than 1,900 views, up from 250, during the banner campaign, said Schmidt.
Baxter also began automatically redirecting mobile devices away from the regular website to the mobile site in November. In December, mobile logins had jumped to nearly 16,000, up from nearly 4,000 in October.
People are going to crawl to mobile banking unless credit unions market the service, confirmed Tripp Johnson, senior consultant for Phoenix, Ariz.-based CCG Catalyst, which provides strategic guidance to financial organizations. "Credit unions are just hoping that people find out about mobile banking. For most, mobile banking is an IT initiative, but you need to get the business involved."
Baxter will begin to push current Internet bankers and call center users to mobile banking, said Baxter CU's Jeff Johnson. The CU also hopes to persuade its 25,000 members who live in Puerto Rico to bank on the go. SMS text may be particularly attractive to those members, many of whom have cell phones but don't seem to use regular Internet banking, Johnson said.