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SAN DIEGO – With a reach for both loans and investment products – mostly via the Internet – the march is on this month by a group of widely-dispersed credit unions to make greater use of automated advice technology. Indeed, two weeks ago three large CUs – SAFE CU in Sacramento, Patelco in San Francisco, and Educators CU in Racine, Wis. – debuted on their Web pages the latest online advice product aimed at generating retail investment leads. A fourth, San Antonio CU in Texas, posted the product in January. “We’re looking to get 1,000 qualified referrals on an annual basis,” forecast David F. Roughton, chief financial officer of the $1.1 billion SAFE in Sacramento which like the other CUs in the three states are acquiring its advice tech program, called “Wealth Management Assistant” from Experion Systems Inc., a Maynard, Mass. vendor. At the same time, the $1.7 billion Mission FCU here said it is already witnessing a spike in loans and inquiries from Experion’s “Loan Advisor” program after launching it last December. The program is successful so far, said Mission, because the system, using a question and answer on-line format directing members to ideal “decisions,” relies on providing high quality advice and “trust.” “We’re all fighting low margins, but credit union managements everywhere are looking to distinguish themselves in the market by building that special trust with members,” explained Ronald Martin, president of the 125,000 member San Diego CU which has been one of the nation’s cheerleaders for automated advice systems. Indeed, Mission Federal emphasizes the advice tech system solidifies retaining a “comfortable” relationship with its members noting that in a 10 week period more than 3,000 Mission members received advice under the Experion system and these “were quality credits.” Under the system, done online, by phone or in person at branches, members respond to a series of questions aimed at directing them to the right product “that meets their individual needs.” “Since implementation we have averaged 322 Web applications per month representing about 27% of our total consumer applications,” said Sherry Carr, vice president of consumer lending at Mission. As compared to a year ago, Web applications increased by 30%, she said. Like Mission, other CUs that have purchased various Experion programs particularly on mortgages contend they like the consistency in reducing training and call center expense. In its promotional material, Experion claims that its “technology solution” provides a platform to help members get consistent advice “whether the inquiry is made at a branch, the call center, over the internet or in consultation with a product expert.” Those “experts” are more productive, claims Experion, “because they are no longer expected to answer every product related inquiry.” “Things are going 24 hour Web,” observes James Henderson, senior vice president at the $680 million Educators in Wisconsin, that state’s second largest. Educators signed up with Experion last year and in March launched loan, deposit and IRA advisor programs culminating in the April 1 startup of the investor-based wealth management. The Racine CU has been using loan advisor for first mortgages “and is getting a good response,” said Henderson though it’s too early yet to track “hits” and loan closings. Many of the CUs using Experion products are active in Members Gateway, a 22-CU limited liability partnership based in South Bend, Ind. and which shares and plots industry strategy on new products. In that group have been Bellco CU in Denver, First Tech CU in Beaverton, Ore. and San Antonio CU plus others. Ross Blair, Experion’s president and CEO, acknowledged that advice tech software, because of it being “cost prohibitive,” may be limited for the time being to CUs above $250 million in assets CUs. “But we expect penetration to expand and in three to four years become as pervasive as online banking,” he predicted. Some users have noted there are “challenges” in making final sale closures. Larry Biernacki, senior vice president at San Antonio CU, said the inquiry system continues to work “very well” but the Texas CU is in the process of “making the fulfillment process seamless” and on that front “we are exploring better ways to do it.” Still, on “Wealth Management,” SAFE in California said the investment product is already providing many “hot leads” and doing it efficiently, according to Roughton, the CFO who also is president of SAFE Financial Services, a retail investment subsidiary which uses XCU Capital, Carlsbad, Calif. as its broker dealer. “The information is put into a format that is awesome for us” in terms of calculating member interest and potential on investment products. -

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