CUs Advised to 'Confidently' Market Positive Image Online
The nation's financial crisis has created perhaps unprecedented opportunity for credit unions, but an apparent crisis of confidence could impede the industry's ability to take advantage.
That's a takeaway from a survey of 52 credit union executives conducted in January by Everything CU-an online community resource for credit union professionals-and analyzed by Aite Group.
The survey found that just more than half of the respondents plan to boost online channel spending in 2010, but that a lack of aggressiveness in marketing service enhancements could impede credit unions from taking the sharp growth in deposits, geographic footprint and interest in general that credit unions report experiencing in the past year.
"Credit unions are anxious about the online channel," Aite Group Senior Analyst Ron Shevlin said. "Perhaps they were judging themselves unfairly or being modest, but credit union executives are not very confident about their online marketing capabilities."
Shevlin said his firm believes that lack of confidence extends to the online channel as a whole, noting that while many of the respondents said they are focused on improving online member experience and capabilities, few of them actually plan to implement such things as live chat, addresses changes or lodging a fee dispute online.
"Money transfer capabilities are, for the most part, nonexistent among the CUs we surveyed and will continue to be at the end of 2010," Shevlin added.
The report also noted that four in 10 credit unions expect to launch a major site redesign this year or next and a fourth will select a new online banking platform by the end of 2011.
While that might indicate opportunity for vendors scouting for new clients, Shevlin said "this signals to us that credit unions lack confidence in their existing online-channel capabilities."
One area that credit unions can focus on with some success is one of the most basic, the report said. The think firm argued that credit unions are missing an opportunity to influence checking account decisions.
"Many CU executives tell us that consumer behavior-namely the prevalent use of the Internet to research and apply for financial products-is driving their focus on the online channel," Shevlin said in the report, "Credit Unions' Online Priorities 2010."
"Yet few credit unions have-or plan to have-checking account selector tools to help prospects make the best choice," he said. "This is especially ironic considering that many CUs tout their consumer advocacy and help they give members in making the right choices."
The report did note that credit unions continue to engage heavily in some key areas. For instance, 45% use Twitter to generally interact with members, 34% use it to market and 17% use it for member service.
And fully 80% offer online expedited bill pay service, more than three times as many as among the top 100 banks, Aite Group said.
And the tide may be beginning to turn, the report found.
For instance, targeted e-mail communications is a goal in 2010 for nearly half of the credit unions surveyed that didn't already have that capability. About nearly three in 10 said they would look to improve online service or online marketing capabilities.
The survey-conducted among credit unions ranging in size from less than $100 million to more than $1 billion-found that 58% plan to increase online channel budgets by at least 5% over 2009. Fifteen percent expect an increase of more than 15%, while one in 10 expect online spending to decline.
"Based on our survey, 2010 is shaping up to be a good year for investment and strategic focus on the online channel at credit unions," Shevlin said.
Beyond that, nearly two-thirds of the surveyed credit unions expect an increase in online channel budgets in 2011, compared with only 2% forecasting a decline next year.