COLUMBIA, S.C. – The online world used to be a place credit unions ventured in search of only the most tech-savvy of their members. That's sure changed. "The Internet isn't just for computer geeks anymore," says Deb McLean, vice president of marketing at Charlotte Metro Credit Union. She should know. The 30,000 members of her $100 million CU include a large number of nurses and other health-care workers from the two dominant hospitals in North Carolina's biggest city, as well as a core of public employees. And they're 68% female. "To some people, convenience means a branch on every corner. As a working parent, it means to me I can pick up the phone or go on the Internet and handle it. That's all I care about. Not the newest gadget," McLean says. That's her speaking as a consumer. As a credit union executive, McLean also points out: "Bricks and mortar are expensive, especially compared with one browser handling all you can do on the Internet." McLean's attitude reflects where many industry experts say credit unions need to go as the future looms. And the question can be raised: Are we now at the point where CUs can and should move their emphasis from defensive, member-retention strategies to taking the offensive? For Bethpage Federal Credit Union in New York, the answer is clear. "Our approach to the online channel has been to use it to aggressively grow our business," says Robert Schwartz, assistant vice president at the $1.1 billion, 101,000-member CU on Long Island. "We have found the Internet to be a wonderful channel for loan production and are now developing the ability to generate deposits online as well. "We also believe that there are some online services that either have been, or will become, strong factors in member retention." He mentioned bill payment, wireless access and account aggregation in particular. Indeed, an Internet strategy is increasingly not just an exotic afterthought to the traditional marketing, teller, loan and data processing functions that make up a credit union's daily life. It's an inherent part of the business, and will become even more so going forward, industry experts say. According to Rob Smart, executive vice president of corporate development at Level 9, a consultancy based in Montpelier, Vt.: "There will be less of a distinction between an Internet marketing strategy and a credit union's overall marketing strategy. Instead the Internet will become a significantly more utilitarian channel that offers tangible returns on money invested." Another observer, Alix Filson at Callahan & Associates, sees three particularly crucial areas for credit unions to focus on as they contemplate their online strategies: online loan applications, member communications and consumer education. Filson, who authored Callahan's recently released "Credit Union Internet Strategies 2002," points to the loss of business to automakers offering 0% loans as just one more reason credit unions need the ability to do snap loan decisions on the Web. Speaking from personal experience (she says she recently re-financed a mortgage and bought a new vehicle), she says she checked out several credit union sites and found they weren't up to speed when it came to handling off-hours applications in competition with automakers and other financial institutions. "I was really amazed to go to one site and find a notice there that says they had taken down their online applications because of the volume. That's not the kind of thing you want to put on the back burner," Filson says. To compete in that arena, credit unions need to incorporate the Internet into both their marketing and their core activities, by taking advantage of the increasing ability of data processors to integrate online solutions, Filson and Smart both noted. Communicating online with members, either through e-mail or chat technologies, also is vital, and particular attention needs to be placed on where such things are incorporated. Put the home banking log-in and the chat functionality on the home page and make sure there's help available, too, on the application pages, where members can get quick and easy help and not bail out in frustration halfway through, Filson says. She also says consumer education is often underestimated as a part of the credit union's core mission. That includes online financial management advice, of course, but also such things as online calculators that incorporate decisioning tools to help the member realize the full meaning of what he or she can and can't afford. Bethpage FCU already is eyeing that path. "In the future, I think we may see greater use of e-marketing to support member education," Schwartz says. "For example, we could offer member seminars online and offer the ability to chat with the presenter or other credit union employees. "I also see using the Internet to promote the sense of belonging, of community, that is so much a part of the credit union philosophy," he says. "Member-only discussion groups, chat rooms and voice/video conferencing could be used to provide members the means to stay in touch with each other, and with their credit union." Credit unions also don't have to impress Wall Street, so they can be more aggressive about serving members than a distant board that wants only to drive up revenues and share prices. "We've always had an aggressive attitude toward online services, and I'm still wondering why other financial institutions charge a fee to access their accounts online and even a greater fee for paying their bills online," says Stan Cowan, vice president of marketing at Boeing Wichita Credit Union in Kansas. "When you consider the alternative, processing checks, the decision should be an easy one," he says, adding that this year, his 44,500-member, $285 million community CU made its bill-pay feature free and added free e-statements and check images. Wichita Boeing, Bethpage and Charlotte Metro, of course, are all trying to determine what their members want electronically from their credit union, and so are a lot of other CU managers. There's no one solution, no one set of solutions, that fits each of the 10,000-plus credit unions out there. "I think we're still very much in the exploratory phase of the Internet," says Keith Nolan, president and CEO of NAFCU Services Corp. "I don't think anyone's found the silver bullet yet." But, he added, "I'm encouraged people have not given up on the Internet. Since April 2000, it's really taken a punch in the nose, but my hope is the technology industry has now bottomed out. And the Internet is still there as a tool that presents tremendous opportunity to credit unions." And while credit unions can use the Internet to offer anything the world's financial giants can to consumers, it's incumbent on each to find out just what that is for its particular FOM. "If I was a CU CEO, I would take a targeted approach. I'd concentrate on finding out what my membership needed me to supply them that I wasn't supplying today," Nolan says. "And then I'd supply it." And rather than concentrate on growing new business, he says, credit unions would be well served by focusing on better penetration of their existing membership. "The thing I struggle with is that credit unions are a niche industry, and that they need to realize that nobody has to apologize for that," he says. "It's a darn good niche." – [email protected]