TOLEDO, Ohio — Despite the challenges of being a small institution operating in a struggling market, Great Lakes Credit Union recently got some big tech kudos.
The $27 million-asset CU was named one of the 21 Tech Savvy Credit Unions Under $50 Million by Callahan & Associates.
"They wanted to see who had the full complement of mobile app delivery services," said Great Lakes CU CEO David Seeger. "We had check deposit and capture, bill payments, transfers — the whole nine yards. There were only 21 of us in the country that met that criteria in this asset class," Seeger said.
Callahan & Associates Industry Analyst Janet Lee used the firm's peer-to-peer analytic software to find credit unions that meet the following criteria: remote deposit capture, mobile banking, new member application via online channels, new share account via online channels and new loan application via online channels.
Though Lee didn't visit Great Lakes, she determined that the credit union, supporting roughly 4,000 members, was a solid candidate.
"When credit unions fill out their 5300 call reports, there is a section where they report the kind of technology services they currently offer to their members," said Lee. "Peer-to-peer analytics pulls all credit unions' call report data every quarter and enables users to find all kinds of data and trends for a specific credit union."
The complete list of innovators, which include Alamo Federal Credit Union, EWEB Employees Federal Credit Union and Saratoga's Community Federal Credit Union, was published in Lee's blog: "5 Graphs That Demonstrate The Power Of Technology."
"I'm not establishing a direct causal relationship that credit unions that are well equipped with technology perform better than those who are not because they provide these services," said Lee. "Rather, I'm suggesting that there might be a correlation."
Tech Savvy CUs Are Pack Leaders
Seeger said the migration to mobile app offerings began with an online banking suite of services and then a Wireless Application Protocol (WAP). And while they were all different products, the technologies all came from Fiserv.
"We have been developing from one generation to the next," said Seeger. "We made the decision more than 10 years ago that we weren't going to invest in brick and mortar, or worry about increasing our branch presence, rather we took those resources and applied them to technology."
Not unlike larger banks or credit unions, Lee finds that "tech savvy" smaller credit unions may also perform better in certain metrics by providing enhanced conveniences to members, which serves to develop deeper member relationships.
As part of her analysis, Lee compared annual loan growth, share growth and member growth between tech savvy credit unions and all credit unions under $50 million. The growth rates in all three metrics were higher for technologically advanced credit unions.
"I also looked at the five year compound annual growth rates in loan and share, and these tech savvy credit unions topped national credit unions that were even larger than them in asset size, including credit unions $50 million to $100 million and credit unions $100 million to $250 million," Lee noted. During the course of her research, Lee noticed similar trends in product penetration and average member relationship. For example, credit unions considered tech savvy had higher first mortgage penetration, share draft penetration, credit card penetration and auto loan penetration than those of all credit unions under $50 million.
"Average member relationship, which is the total amount of loans — excluding member business loans — and deposits divided by the number of members, for these tech savvy credit unions was also higher than all credit unions under $50 million," noted Lee.
Seeger and his team, in total comprising 13 employees, have continually bet on the fact that while members could visit one of the two branch locations, or other shared branch locations, ultimately they would want virtual options.
"This new form of channel delivery I think was the right decision for us," said Seeger. "I've read that by 2020, that only four percent of all bank transactions will be done at the physical branch."
Seeger further explained that with the growth in mobile adoption rates, the next phase will be to launch Fiserv's Mobiliti, which supports tablet banking. But that's not all that is on the horizon.
"On the lending side, we are looking at a mobile app to apply for loans," said Seeger. "We want to get a grid in place where a member can apply for a loan and digitally sign it and not have to worry about coming in to the branch or us emailing them at the dealer and them faxing back the documents."
