FRAMINGHAM, Mass. – Combining delivery channels to offer consumers the widest variety of ways to access and manage their finances – and get some expert help while they're at it – is not just for the wealthy anymore. Findings from IDC's 2002 Household Technology Survey suggest that many of the conditions that make multi-channel service delivery strategies so compelling for higher-income consumers now hold true for the middle-income mass market, a big sweet spot for a growing number of credit unions. Those conditions include high Internet use, increasing adoption of online financial services and the fact that "the age range of middle-income online finance use is skewed to younger customers, creating high opportunity for maximizing lifetime value," writes the report's author, IDC analyst Shaw Lively. The massive survey, conducted among 15,000 to 25,000 different households each quarter, has been showing a shrinking gap in use of online money-management channels between higher- and middle-income brackets. Almost 80% of all U.S. households have Internet access, according to the latest IDC numbers. Online banking is used by about 36% of those Internet-enabled households with annual incomes greater than $100,000, compared with about 33% for the $50,000-$99,999 bracket. About 20% of the higher bracket shop online for financial services, compared with about 15% for the middle-income bracket. And approximately 12% of the higher-income households use online services to get personal advice, compared with about 8% for households in the $50,000-$99,999 income range. It's those narrowing gaps that could capture the attention of credit unions interested in serving that big demographic. "The use of online financial services by the middle-income mass market is approaching critical mass," Lively says. The desire to serve the complex demands of affluent consumers was the original driver of the industry move toward combining self-service and human-delivered channels, Lively writes in a new report based on the survey findings. His study is titled "Multi-Channel Advice and Service Delivery for the Mass Market: Online Capability Emerges as Key Requirement." Now, he says, "IDC believe a similar dynamic is building in the mass market. As technology and multi-channel business models are being developed to serve the mass affluent with more sophisticated services such as advice and wealth management, it is likely that extending those services to the middle-income segment will be a strategy question for many financial institutions." Indeed, the IDC analyst sees new opportunities for banks and credit unions willing to "expand online banking from a transactional hub to a relationship hub by integrating customer profile data to make targeted offers, introducing advice applications, and integrating call center and/or branch human contact opportunities for closing business, dispensing advice, or solving problems." Sounds like customer relationship management, which has met with mixed acceptance at best so far in the credit union space, but on that point, Lively suggests a change in emphasis in electronic financial services channeling. "Suppliers of CRM, online banking and content management should highlight their ability to make the online environment facilitate personalized customer relationship interactions, not just provide another touch point for account and product information," he says. -

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