Customization and Expanding Functionality Drives Online Channels
Empowering the end user to customize the online banking experience-with use-anywhere tools, real-time functionality and a holistic view of personal finances-is driving the world of online banking.
That's the takeaway from a variety of participants in the credit union online banking scene asked to look ahead to 2010 and beyond.
For instance, at $1.2 billion UW Credit Union in Madison, Wis., a major upgrade has just been launched that added the ability to categorize transactions, get reports, perform searches and create customized, transaction-based alerts.
Called "Money Management Tools," the new functions hold a prominent place on the 144,000-member credit union's Web page at www.uwcu.org and were built by the in-house development team, according to Eric Bangerter, UWCU's director of Internet services.
"We've been working on it for two years, and it's a big thing for us, taking a financial management approach to online banking, not only by showing balances and doing transfers and paying bills but being able to set up a budget and goals and track those," Bangerter said.
"We're giving them something with the core functionality of Quicken or Mint.com right in their online banking site, so they don't have to deal with setting up downloads or sharing passwords," he said. "We're excited and our members are, too."
The ability to offer deeply granular searches-such as transaction-based alerts based on multiple factors and scenarios-required a level of integration with the credit union's Fidelity Miser core system and other applications that was not available from vendors, Bangerter said he found.
However, individualizing the online experience for financial institution and end user alike is a sweet spot, too, for longtime players in the online space like Online Resources Corp., which said nine of the past 11 clients it has signed for its new customized Internet banking platforms have been credit unions.
"What we're seeing now, starting in late 2008 and really building steam since then is a focus on having more control and influence on the Internet channel," said Ron Bergamesca, executive vice president and general manager of the community banking and credit union services division at the suburban Virginia supplier of online banking, payment and other e-commerce services to several hundred clients.
"It's a real contrast to several years ago when companies like us, Digital Insight and Symitar were relied on to pretty much define what the product is and how our customers would be providing it to their members," Bergamesca said.
He said advancing technologies have made it easier for hard-pressed IT and marketing staffs to customize the experience, an individualizing process that goes "well beyond choosing background colors and whether navigation buttons should be arranged horizontally or vertically."
Along with customized computer-based banking, mobile was the big buzz in 2009 and that should continue amid an environment of widely varying offerings and consumer acceptance.
"For us, mobile adoption is all over the place," said Bergamesca at Online Resources. He said 10% is a good rate, based on his conversations with credit unions and other clients, and that while marketing and promotion make a difference, so does how the service is technically delivered.
For instance, he said credit unions with the highest adoption rates are those whose software recognizes immediately that a member is accessing from a mobile device, such as a Blackberry, and immediately routes the user to registration for mobile access.
He also said whether or not to offer mobile will not long remain optional.
"Any credit union that is serious about remote delivery will have to have mobile in the next two or three years," he said.
Remote deposit capture also has rapidly gained traction as the first decade of Check 21 comes to close-moving in the past year or so from the back office to the teller line and now out to homes, businesses and, now, mobile phones.
"I think RDC is particularly important to the credit union movement," said David Eads of Mobile Strategy Partners, an Atlanta-based consultant formerly with mFoundry who helped put together the mobile offerings of such clients as CO-OP Financial Services.
He pointed to the experience of USAA as a "poster child for remote deposit."
"While not a credit union, they behave much like one and they were the first institution to go live with that [end user] remote deposit. Their deposits went up immediately as they became closer than the branch around the corner. It's a huge change for their members, and they suddenly aren't necessarily the second institution for many people, like they have been," he said.
And in another competitive area of remote delivery, bill payment, technology also continues to change the playing field.
Bergamesca at Online Resources said as real-time payment continues to replace bill pay services mailing paper checks, the ability to customize that experience also continues to expand. For instance, Online Resources' model won't allow a nonsufficient check, since it won't send out a payment unless the money is in the account.
"We have real-time visibility. We think we are becoming a lot more cognizant of their cash flow, and while our competitors could use that against us, we really think that's what the end user is going to prefer. It's like the debit card model," he said.
Commercial banking also remains a focus of online activity, including north of the border, where credit unions are taxed but also have wider business powers.
"We recently launched a second commercial version of our online banking and now have one for small businesses and one for medium-sized enterprises," said Oscar van der Meet, chief technology and payment officer for Central 1 Credit Union, a corporate based in Vancouver, British Columbia.
The two versions now offer a mix of tax remittances, multiuser access for data entry and transactions and wire transfers.
Last but not least is the social media phenomenon. Tools such as Twitter and Facebook allow credit unions to take advantage of what is perhaps their strongest attribute in their competition with banks, big and small.
"Credit unions are thought of as Main Street, not Wall Street, like the hardware store down the street," said Bill Leake of Apogee Search Marketing in Austin, Texas, a search engine marketing and Web site analysis specialist for credit unions and other clients.
"And while all the technology already is there to allow credit unions to offer everything that a big bank would to the average consumer, that's an old story. That's been the case for going on 10 years now," he said.
"The challenge for credit unions now is what do we use? Social media tools-especially when you use them to tell a story that's worth being told-are a phenomenal technology for that," Leake said.
For example, a Facebook posting or a tweet announcing a special promotion for new accounts is one way to go. Or even just letting people know that there's popcorn in the branch for whoever comes in Tuesday, these are things that have been done at credit unions in Austin to emphasize the personal touch.
Because of that kind of affinity, credit unions don't have to rely on pushing the technology envelope every time, Leake said.
"I think credit unions have the chance to leapfrog banks by using the technology that's already there," he said.