HUNSTVILLE, Ala. — In an effort to increase its checking account activity, Redstone Federal Credit Union here developed a comprehensive solution, including a new debit-engaging app.
"The product we had for almost 20 years was stale," said Terri Bentley, Redstone Federal Credit Union's VP of technology. "So we decided to revamp checking products as a whole and come up with a better product that drives engagement and loyalty."
A brainstorming session resulted in an initiative that would result in five new checking products. "At Redstone, we are innovators so we knew we wanted these products to be automated and a better experience for the membership and at a lesser cost to us," said Bentley.
Along with its standard in-house development tools, the $3.7 billion Redstone FCU, with 375,000 members and 25 branches, turned to its long-standing relationship with Fiserv and its DNApp creator toolkit. The credit union employs seven software developers, which has resulted in the creation of 32 apps.
It's Raining Nickels
While all five checking products have been successful, one stands out: It's Raining Nickels.
"The margins in the industry are thin and shrinking, and from a credit union perspective, everyone is trying to figure out what they will do with non-interest income," said Bentley.
Bentley explained that despite this environment, Redstone FCU's executives wanted to figure out a way to give back to their members. They conducted analysis, including paying dividends on checking accounts, but opted to take a route that could also influence membership behavior.
"For two of these new products we pay a nickel every time a member completes a transaction," said Bentley. She explained that one product awards members a nickel after the fourth transaction, while another starts nickel rewards on the ninth transaction.
For both members and Redstone FCU, the nickels add up. As of August, the CU had 207,350 active debit cards. "A nickel is far more than they would get on a dividend and it also keeps members engaged," said Bentley.
Redstone's Debit Card Rewards DNAapp, which was developed in-house using the DNAcreator toolkit from Fiserv, automatically deposits a nickel into members' accounts each time they make a debit card transaction beyond the monthly minimum.
Since launching in May, Bentley said the app has helped increase purchase volume by 55% and net interchange income by approximately $20,000 for the second quarter year over year. "On the fifth of every month, members get all their nickels."
The initial goal was to have 27, 400 member accounts upgraded to the new solution by year's end. Bentley explained that milestone was reached by mid-October. "Even though we are giving money back, we are still making more money, so it a win-win for everyone."
With over 30 apps developed and available in the DNAappstore, Redstone FCU has apps for sale ranging from $100 to $9,000. The easily accessible Redstone's Debit Card Rewards DNAapp hit the market in May with a $500 price tag, a flat fee.
"There is a fast ROI on this app," said Bentley. "We support this community [DNAappstore] and the whole concept — for all of us to [collectively] develop smarter solutions so we all continue to progress," said Bentley.
