To enhance customer service, improve operational efficiency andentice new members, especially younger ones, credit unions of allsizes are tapping into new technology such as social media androlling out cool tech tools such as mobile apps and videotellers.

Yet, credit unions face challenges selecting from the plethoraof products and providers entering the market. Tighter IT budgetsmake it imperative to find cost-effective solutions that engagemembers across multiple channels.

According to Callahan & Associates' latest Technology Priorities Survey, about 60% of credit unions that participated in the surveyhave earmarked funds this year to introduce or upgrade some form ofmobile banking, such as Short Message Service (SMS) or RemoteDeposit Capture (RDC).

“From the credit unions surveyed, 56% of respondents plan onadding an app while 44% plan to improve on an existing iPhone orAndroid app,” said Parth Kapoor, an industry analyst withCallahan in Washington, D.C. “From those surveyed, 21% want tobuild mobile compatible websites while 50% will focus on tweakingtheir mobile browser pages. Mobile banking through text is apriority for credit unions as well, as 37% of credit unionssurveyed plan to either improve or implement an SMS mobile bankingsolution.”

Credit unions offering remote banking services are reapingbenefits, Kapoor said.

“As of March 2013, credit unions above $20 million that did notoffer remote deposit capture or mobile banking had average loanbalances of $11,586 with average share balances of $8,512 for thosecredit unions,” he added. “For credit unions above $20million with remote deposit capture and mobile banking, loanbalances averaged $13,918 while average share balances were $11,000for the first quarter of 2013.”

To maximize return on investment, experts say, credit unionsshould closely explore members' needs and think strategicallybefore implementing new technology. Selecting the right technologyenables them to compete with national banks and offer benefits onthe balance sheet as well.

“Thanks to innovation, branches no longer have to function asthe sole place for simple banking transactions,” Kapoor said. “Byprocessing basic tasks and transactions, remote services offercredit unions the ability to be wherever members are without havinga physical presence.”

Here's a closer look at five tech tools for CUs:

Mobile Remote Deposit Capture (RDC)

Although there are some security concerns about RDC, mobile banking continues to gainconsumer confidence with almost 30% of cell phone by tapping intomobile banking services, according to a recent report by theFederal Reserve.

(Below, a check image on Wright-Patt CU's RDC solution.Click on image to see it enlarged.)

For some credit unionmembers, mobile is the first choice. About 15% of consumers preferto check their financial accounts on a mobile device, according toa recent study by PFM software provider Quicken, an Intuitcompany.

As a result of the increasing popularity of mobile banking, agrowing number of credit unions are introducing mobile RDC and manyare reporting positive feedback from members.

More than 60% of participants in the Technology Priorities Survey plan to add RDC this year while27% plan to upgrade an existing offering, Callahan said.

Since launching its mobile RDC feature on March 27, the $2.6billion, 250,000-member Wright-Patt Credit Union in Fairborn, Ohio, has processedmobile deposits for more than 4,000 users, said Tracy Fors, WPCU'svice president of marketing and business development.

Smaller CUs are also jumping on the mobile RDC bandwagon, citingthe affordability of launching mobile apps. For instance, the $25million, 4,000-member Tri-Cities Credit Union in Kennewick, Wash., recently rolledout a mobile deposit app which cost less than $5,000 to implement,according to Tri-Cities President Doug Wadsworth.

Next: P2P Mobile Person-to-Person(P2P) Fund Transfers

The P2P market is valued at$80 billion to $120 billion, according to a recent study by First Annapolis Consulting in Linthicum, Md., andcredit unions craving a slice of the P2P revenue pie are dishingout new services, such as P2P apps for mobile devices.

(At left, click to see enlarged image of Financial PartnersCU's PayPal-driven P2P offering.)

The $793 million Financial Partners Credit Union in Los Angeles recentlylaunched a mobile P2P service powered by PayPal. During the firstfew weeks of rolling out the new mobile service, Financial Partnerssaid it processed more than 100 mobile P2P transactions, totaling$7,000.

Although many credit unions are debating the merits of P2P, someexperts expect continued growth.

Monett, Mo.-based Jack Henry & Associates Inc., which owns Symitar, a provider of core processing solutions to about790 CUs, reported recently that its iPay Solutions processed morethan 1.8 million payments, totaling more than $1.2 billion, in thelast six months of 2012.

More than 2,700 financial institutions, including 1,900 creditunions, use the iPay Solutions bill pay platform in which the P2Pfunctionality is integrated and usage is increasing, according tocompany officials.

“We believe the ongoing evolution of mobile devices and theirprevalence in daily financial management will surely support asignificant rise in P2P adoption,” said Greg Adelson, grouppresident of iPay Solutions. “We have clearly seen exponentialgrowth in the number of subscribers and transactions as well astransaction amounts for the last few years.”

Next: Social Media

Social Media

By now, most credit unions utilize social media to engagemembers, but some are taking it to the next level.

For example, the $718 million Vantage Credit Union of Bridgeton,Mo., which recently joined the growing number of credit unionsoffering mobile apps, is also using Facebook and Twitter in uniqueways, said Jenn Cloud, Vantage's social media specialist.

Recently VCU used Facebook to help a member retrieve $1,000 lost duringa vacation in New York City.

VCU also uses Twitter to engage members. In 2009, the CUlaunched TweetMyMoney, which allows members to monitor accountbalances, deposits and withdrawals, holds and cleared checks withsimple commands via Twitter. In addition, they can transfer fundswithin their accounts to avoid overdraft fees.

To improve security, Cloud said, TweetMyMoney uses Twitter'sdirect message feature and the information contained in tweets aregeneric from Twitter hash tag commands. Now that Twitter has gainedmore traction with the general public, Cloud said, VCU plans tofurther develop TweetMyMoney and encourage more use amongmembers.

“Our user base is still modest as we are just now assigning aproduct manager to develop it but the active members we do have areactive and average about three to four inquiries per month throughit,” she said. “They find it to be a fast, efficient way to checktheir balance, recent transactions and make quick transfers with afew simple codes!”

Next: PFM

Personal Financial Management(PFM)

Approximately half of U.S. consumers that participated in arecent survey by Javelin Strategy & Research said they want asingle view of their finances and would be most likely to use a PFMtool offered through their credit union or bank.. To respond tothat demand, CUs across the country are offering PFMtools.

For example, to enhance functionality for the soaring number ofmembers using computers and mobile devices, the $808 million,106,000-member Credit Union ONE in Ferndale, Mich. said it is updating itsonline banking platform and adding new personal financialmanagement tools. The soon-to-be released platform features brandlogos for retail account transactions, online bill pay capabilitiesand helpful graphics that offer members a visual tool to assistwith budgeting.

“With the new system, our members will have theaccessibility for Bill Pay Quick Pay, a transaction history,budgeting tools, alert setting, and many other user-friendly tools,including a dashboard that they can customize to view whateverinformation they would like to see in the order that best suitsthem,” said Judith Desilets, CU ONE's director of publicrelations.

To reap the most benefits from PFM tools, experts say, CUs needto capture data accurately, analyze it efficiently and utilize itstrategically.

In order to make the most out of PFM, the $1.3 billion LocalGovernment FCU in Raleigh, N.C., recently inked a deal withProvo, Utah-based MoneyDesktop,according to Maurice Smith, president/CEO of Local Government FCUand chair of the North Carolina Credit Union League.

Smith said Local Government CU is participating in the privatebeta testing phase of MoneyDesktop's new PFM-based analytics andmarketing tools: Insight and Target, which were namedas a Finovate Spring 2013 Best of Show winner.

Smith, said his credit union's goal in implementing Insight andTarget is to improve efficiency in marketing products and servicesto members, enhance customer service and improve marketpenetration.

By using data-driven analytics, CUs can better understandaccount holders' banking relationships and create focused marketingstrategies aimed at specific users, said Bret Skousen, vicepresident of strategic partnerships and public relations atMoneyDesktop, which claims about 400 banks and credit unions asclients.

Next: PTMs

Personal Teller Machines (PTMs)

Since the NCUA announced last fall that it would allow video tellers tocount as service facilities, PFMs have been popping up at creditunions of all sizes, and industry analysts predict the machineswill become commonplace during the next few years.

According to NCUA guidelines,PTMs must be physically located in the service area, providereal-time, face-to-face video access to credit union or sharedbranching employees during regularly scheduled hours, and allow themember to conduct all transactions in order to qualify as a servicefacility.

Video tellers such as NCR's APTRA Interactive Teller can speedtransactions by roughly 33% compared with an in-person transaction,according to Brian Bailey, vice president and general manager atthat company.

To enhance efficiency and engage members who prefer electronicoptions, an increasing number of CUs are deploying video tellers.For example, PFMs have recently been installed at the $2.6 billion,250,000-member Wright-Patt Credit Union in suburban Dayton, Ohio, and the $3.5billion, 420,00-member Mountain America Credit Union in West Jordan, Utah.

Video tellers are also helping CUs cut costs. According to avideo casestudy created by NCR, the $2.2 billion, 180,000-member CoastalCredit Union in Raleigh, N.C., has reduced the cost of tellerservices by about 40 percent by installing PFMs.