Don't Let Your CU Be The Next Victim Of The Missing Link

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A graduate student decides to open a share account at the campus credit union. He heads over to the CU, applies for membership, and deposits $100. He walks out the door. Our college student is completely satisfied.

Are you? What about three years later when he starts his first job, and you never see him again? Does this scenario sound too familiar? Unfortunately in the life of many credit unions, this happens more often than not.

But what if we change the storyline? What if our grad student hears about all of the online opportunities available at the campus CU? What if he applies via the Internet for a share account, deposits his $100, and then is offered free checking and a credit card with a low interest rate, based on his actual credit score? What if a month later he's offered a high-yield CD via email? What if when he's thinking about buying a car, he can go online to apply for a loan with an attractive rate? What if he never walks into the branch office on campus, but his wallet-share is significantly larger than in the first example?

Unfortunately many credit unions are not taking full advantage of the opportunities to increase and connect membership and lending activities via the Internet. Typically, a credit union has several origination channels for new members. One of those channels is at a branch office: brought in by local advertising or a community connection, a new resident applies for membership. Another opportunity often occurs as a result of a lending opportunity. Yet a third channel exists over the Internet on the credit union's website. To maximize membership and the wallet share of each new member, these channels need to be fully functional and integrated online.

For many credit unions this is not the case. Using their standard CU core processing system, when someone joins a credit union via a branch office, this information is never connected to existing lending opportunities. And when someone arrives at a credit union to apply for a car loan, s/he is never offered other credit, financial or lending products.

Bridging The Gaps

Bridging the gaps between membership and lending channels online offer important opportunities for today's credit unions-especially when you want to target a Gen-Y demographic. Jay Winslow, CIO at Security Service Federal Credit Union in San Antonio, couldn't agree more. "We want to position ourselves to forge stronger and broader member relationships by presenting and cross-selling products in a more proactive way."

As the nation's largest indirect lending credit union, SSFCU has been successful in acquiring new members through its strong affiliation with automotive dealerships. The goal for SSFCU moving forward is to increase retention and expand member relationships across every demographic.

The fact that membership growth is a challenge for credit unions is nothing new. But what is less known is that today's web-based technology can connect membership and lending activities in ways that are extremely cost-effective-resulting in a swift return on assets and increased profitability. Membership and loan application processes can be leveraged to take full advantage of additional credit, lending or service opportunities.

Marketing Back To Each Member

Functioning like a framework above and around an existing core processing system (CPS), today's technology solutions can link membership, lending and service activities. Data is still retained and maintained on the CPS, but it is analyzed and massaged to create cross-selling and up-selling opportunities, providing more ways to market back to each member.

And fortunately, because we are not replacing the CPS-we're talking an enhancement to the system-the investment in new technology is affordable and employee training time is minimal.

Sun Federal Credit Union, based in Toledo, Ohio, recently began working with a new program that links their account creation, loan booking and loan disbursement, and they surveyed their staff to find out what they thought.

"We make sure that we touch base with our staff on a regular basis," says Dale Frankhouse, director of lending at Sun Federal. "We want to know their comfort level with the different systems they work on every day. Are they making good use of these tools? Are we as a credit union getting value out of our technology investments?"

On the survey, Sun Federal employees reported being more productive and able to perform their work with greater ease as a result of the new technology. "And what's surprising about this result is that we've been using the new program for less than a year," Frankhouse says.

Is there a downside to linking membership and lending activities via the web? Once you get past the dollars-the necessary investment in any new technology-there really isn't one. If you do your research, visit a few credit unions that have already taken this step and work with a reputable technology vendor, one who has a track record of experience and customer service, you won't be disappointed.

Linking membership, credit, financial services and lending activities online offers one of the most promising avenues for growth in today's credit union market.

Linn Cook is the director of marketing for MeridianLink,Costa Mesa, Calif., a provider of enterprise business solutions. For more information, visit

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