SALT LAKE CITY - Online home banking is reaping some real bottom line rewards for Utah credit unions, both in reducing personnel costs and in building customer loyalty. "I'd say we've been able to save the hiring of two full time tellers," said Bruce Bryan, executive vice president of the $124 million Toelle Federal Credit Union which began PC banking in November, 1998. Toelle FCU, with three branches, has seen its online transaction activity soar 212% since 1998 averaging 7,000 transactions a month, said Bryan. In fact, 10% of all Toelle's transactions are being done on the Internet PC, said Bryan, noting also this feat has been achieved without advertising. "We don't even have a printed brochure," said Bryan explaining that "word of mouth advertising" and Web addresses on printed CU materials and on newspaper ads has seemed to carry the message. Bryan also credits Toelle CU employees with suggesting PC usage to members. The activity has primarily been on money transfers and bill payments along with check mailing, said Bryan. The Toelle executive explained that Utah may be ahead of other states in its PC activity because of its growing technology base. "We seem to have a large number of our members who ask for our advertised Web address," he said noting that a large number seem to be accessing Web sites. The $750 million Mountain America Credit Union was able to open two new branches last year "without hiring any new people," according to Gordon Dames, president and CEO. Up to now the average Mountain America branch-of which there are 25-requires six to 10 staffers, but that number-as a result of PC activity- has been reduced from five to nine. "We're doing 50,000 transactions a month through the Internet," said Dames noting the online activity has "transformed the branch role" as a pure transaction center to a facility which fosters customer relationships and "problem solving" while also serving as an "education center." He said Mountain America like other CUs across the country "still needs the brick and mortar" to establish "identity" with the public and its membership. Yet there is less need for personnel to staff them. Although activity varies widely, the average Mountain America branch does under 10,000 transactions a month. The Utah CU has an employee base of 325. Citing cost savings in the processing area, Dames noted that Mountain America has already seen expenses cut in such areas as auto loan payments. "Some of the rote mechanical duties such as dual controls needed for keying deposits' has been cutback as a result of Internet activity, he said. Kenneth Gibby, vice president of information services at Utah Community Credit Union in Provo and which pioneered CU home banking in the state in 1995, said the offloading of lobby transactions to the computer "is exciting" and also is cementing relationships with the CU's best customers. "If we look at the profile of the member using home banking, we can see he or she is using us for a higher number of services so we can become their primary financial institution," said Gibby. The account relationship is being strengthened, he said, as customers use Utah Community to make loan payments and perform other transactions. He recalls some recent market research done for Utah Community shows two more services per household were added as a result of PC home banking. Bryan of Toelle Federal urged CUs working to improve Web sites to concentrate on the "stickiness" of sites-to make members want to come back. "You have to create real value for your members-provide information they want," said Bryan citing the need for Web site portals so members can complete the computer hookup with ease. -
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