WASHINGTON – Few new technologies have become so widely adopted so quickly as voice-over Internet protocol (VoIP) telephone service, and it's particularly well suited to credit union land, according to a new research report from Callahan & Associates. The 16-page report – "VoIP: Redefining Communication Strategies" – defines VoIP, explores its benefits to the credit union community and includes tips on knowing when's the right time to adopt the technology, as well as best practices for doing so. Case studies from three credit unions using VoIP also are included. Simply put, VoIP uses the public Internet or private networks to digitize and transmit voice communications on the same data pipe as is used by the rest of an organization's network. Michael Powell, the former FCC chairman, calls it the "most important shift in the entire history of modern communications since the invention of the telephone." Estimates are that 97% of all new phone system installations in North America will be VoIP by 2007, and VoIP was one of the two most frequently named spending priorities among credit union respondents in Callahan's "2005 Credit Union Technology Survey." Sixty-five percent of the respondents from the sample of credit unions averaging $564 million in assets said they wanted to invest in VoIP, and 33% already had. The advantages of a VoIP phone system are many. For one thing, the most far-flung of branching systems can share one toll-free number, with transfers easily made without making members call another number. Incoming calls also can be more easily spread around to even out the workload. The cost advantages also are often cited, beginning with the elimination of many long-distance calls, while the fact VoIP is software- rather than hardware-based allows for remote routine maintenance and facilitates disaster recovery options, the Callahan report points out. In addition to bringing all the branches into one "phone line," VoIP lends itself to credit unions in another most useful way, the report notes. "One of the most popular and useful VoIP options is screen-pop, where a member's core processor data automatically appear on the phone or computer screen of the person answering the member's call," the report says. That eliminates the need to ask basic questions and helps increase the member's sense of belonging to and being known by the credit union, the Callahan researchers say. The report also includes lists outlining when a credit union might know that it's ready for a VoIP system, such as being about to embark on phone or computer network upgrades, as well as best practices. As for the three credit unions in the report, $85 million Hutchinson Credit Union in Kansas cites seamless connectivity between its five branches for allowing it to "leverage staff resources more effectively," as well as the ability to support the system with existing IT staff instead of expensive third-party contracts with traditional telephone providers. At $157 million U.S. Postal Service Federal Credit Union in Maryland, the VoIP system replaced separate PBX systems at each of its seven branches in four states and the District of Columbia that had created an "administrative nightmare." That CU says VoIP conversion may be one of the most costly upgrades it could make but will be an investment worth it in savings and member-service benefits. For instance, it allowed the CU to extend call center hours by rerouting East Coast calls to its West Coast branch. Meanwhile, $628 million Summit Credit Union in Wisconsin cited the broad functionality of VoIP phones and the system itself, including integrating phone calls, faxes and e-mails together through Microsoft Outlook, and the increased ability for staffers to easily work at home. The downloadable report is available from Callahan & Associates for $49 at www.creditunions.com/ research. -

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