WASHINGTON – Credit unions wanting to ensure themselves a spot as their members' primary financial institution, much less not lose business to others, may want to capitalize on the opportunities presented by account-to-account (A2A) technologies. The competition already is going after that fast-growing market, according to Chip Filson, president of Callahan & Associates, which is offering a free, 15-page white paper on the topic. (It's available at www.creditunions.com/store/research/a2a.asp.) "Even if your credit union has not put A2A on its to-do list, it's still important to understand the power of this technology," Filson says in a letter to readers about the new research paper, "Online Account-to-Account Transfers: Opportunities to Enhance the E-Member Relationship." "Here in Washington, D.C.," Filson says, "ING Direct, an Internet-only bank, is making a hard charge for consumers with A2A as a centerpiece of their growth strategy. A computer who sees an ING billboard on the way to work can set up an account within 10 minutes of sitting down at their computer terminal at work. "These customer-in-control, Internet-based transfers are the future of financial services, and it has arrived." While it has gone by different names – including member-directed ACH, online intern-institutional transfers and Me-2-Me transfers – the idea is the same: A2A transfers are the ability to transfer funds between two accounts owned by the same person, but held at different financial institutions. Several large credit unions already offering the service – such as California's Wescom, USC and Patelco credit unions and Digital FCU in Massachusetts – are highlighted in the report, which also points out that size isn't a requirement. In fact, one credit union notes that such a service actually allows it to better compete with large financial institutions. "Normally, small credit unions do not have the manpower to support an ACH origination service because they require data input, review, approval and transmission on a daily basis," says Vonda Burkhart, CFO of $46 million Employees Credit Union in Texas (www.ecudallas.org). "By allowing the member to originate his or her transfers, you are taking the work off the credit union," Burkhart says in the report, authored by Callahan analyst Scott Trubisz and sponsored by Digital Insight and CashEdge. Burkhart's credit union charges a $2 fee for outgoing transfers, nothing for incoming funds, typical for the industry. "Most credit unions will not charge fees that may deter members from using A2A to transfer money into the credit unions," Trubisz observes. He also says his research shows that A2A transfers are "emerging as a priority for growing numbers of credit unions because they strategically position the credit union at the center of the member's diverse financial relationships and offer opportunities to expand member relationships in the self-service channel." Self-service members of the online variety are, of course, the sweet spot for many financial institutions, and Callahan surveys show those are just the people who could be attracted to A2A transfers. For instance, one recent survey found that 59% of credit union e-members have checking, savings or money market accounts at another financial institution, and that 40% of them said they'd be likely to move those funds to the credit union using online transfer if it was available, Trubisz says in his report. -

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