Survey: Online Services Attract Best Members

PALM SPRINGS, Calif. – Members of credit unions who use their financial institution’s online banking services are more profitable, maintain higher loan and deposit balances, cost less to serve and are more responsive to marketing, according to a new survey. The survey of 1,500 credit unions conducted for CUNA Mutual Group, CUNA, CUNA Technology Council and the CUNA Marketing and Business Development Council, also reported that credit unions today view online services as a necessity – primarily to sell products and services and to retain members – rather than as a way to differentiate themselves from competitors, it said. “Credit unions of all sizes told us that their members now simply expect banking services to be available online while also improving off-line branch-banking services,” the survey said. “Offering online products and services is not a competitive differentiator but a necessity.” Results of the survey were released March 16 during a pre-conference workshop at the 12th annual CUNA Marketing and Business Development Council Conference held here. “Most credit unions have similar strategic goals for online marketing,” the survey noted. “The number one goal for 83% of credit unions is either to sell products or services or to retain existing members. Only 15% of all credit unions said acquiring new members or reducing expenses was their number one goal.” Only 130, or 9%, of the credit unions contacted responded to the survey, conducted by the University of Wisconsin E-Business Consortium in Madison. Follow-up telephone interviews were conducted with a focus group of eight credit unions. Credit unions surveyed ranged in asset size from under $100 million to more than $500 million. Despite using online services to try to retain members, the survey reported that 72% of small credit unions did not see a decrease in turnover among online members. In contrast, it said, 62% of large credit unions reported lower turnover. Credit unions rely heavily on off-line marketing methods, such as printed newsletters, call centers, branch staff and marketing materials that include a Web site URL, to promote their online services, the survey said. It cited such promotions for not driving down marketing costs. “Off-line channels are most often used to promote online activities,” said Marc Gagne of CUNA Mutual Group who led the workshop. He added that credit unions were not using all of their options to promote online services, noting that “almost half of the general marketing tactics are not practiced by over 50% of the respondents.” Privacy and security concerns along with lack of member awareness were among the biggest hurdles to getting more members to adopt online banking, the survey said. “Many of the online trends are positive, but credit unions told us they face several challenges: raising member awareness, increasing access to the Internet and assuring privacy and security,” the survey said. “They also face tactical issues such as building and maintaining an accurate e-mail database and devising targeted marketing campaigns.” -