Two thirds of Americans prefer banking locally, according to theAustin, Texas-based BancVue. However, a perception still existsthat credit unions and community banks fall behind mega-banks whenit comes to delivering a top-tier product experience.

BancVue, which began providing white label rewards checkingaccounts about nine years ago, set out to increase the capabilities of smaller financial institutions such as creditunions in order to level the playing field. To do so,executives at the company said they asked themselves, “How do weshift the perception?”

The answer was the creation of a national brand, Kasasa, whichincludes products such as free checking, money managementplatforms, rewards programs, customized marketing tools and web andmobile apps that smaller institutions might not be able to offer ontheir own. BancVue also helps community institutions with theiradvertising through its Kasasa platform.

Kasasa's free checking and savings accounts reward consumers forusing their accounts with high interest rates, cash back andautomatic savings deposits. All Kasasa products are free,reward-based accounts with no minimum balance to earn rewards ormaintain the account, no monthly service fee, free online bankingand free ATMs nationwide.

“Kasasa ties them all together and gives us a little betterscale because it does provide national name recognition whensomeone searches for a rewards checking account or high interestchecking, or if they search for cash-back checking,” Keith Brannan,chief marketing officer of Kasasa by BancVue, said.

New capabilities provided by the product allow credit unions tobe very relevant in comparison to mega-banks, Brannan added. Inaddition to leveling the playing field for credit unions, theyenjoy the advantages of offering products with a recognizable,national brand name.

“We found that about 88% of consumers search for product first,”Brannan said. “Then they look at who is offering that product.”

So, he suggested, offering consumers a free account withbeneficial rewards helps increase noninterest income and cost savings for credit unionsvia the account holders' natural banking activities.

And BancVue's approach appears to be working. Of the company's707 clients, 226, or 31.9%, are credit unions. One of them is the$129 million, Jackson, Miss.-based Magnolia Federal Credit Union,which has been utilizing Kasasa since February 2010.

“We initially were talking with the BancVue folks about rewardschecking,” Steve Pollman, president/CEO for Magnolia FCU, said. “Aswe were getting ready to implement it, they came out with Kasasa.We backed off and just implemented Kasasa right off the bat.”

Kasasa's technology runs in the background and completes allcalculations for the institution, creating a seamless experiencefor the consumer, Brannan said.

“Our ability to process those rewards, making sure we processthe qualification criteria, is a very specific, programmaticoperation that runs every month at a different cycle for eachinstitution depending on their needs,” he added.

The rewards processing system plugs into the institution's coreprovider; currently, BancVue supports more than 60 core systems. Inthe case of Magnolia FCU, BancVue uses a link to the credit union'sserver and pulls data from the its transaction registers.

“It figures out who made their rewards and who didn't based oncertain criteria,” Pollman explained. “They do thatautomatically.”

Kasasa also sends alerts to members each month when they fallshort of receiving their rewards and tells them what they need todo to get back on track.

Magnolia uses four types of Kasasa products: Kasasa Cash, a freechecking account that rewards members with high interest for everymonth in which they qualify; Kasasa Saver, a free, high-interestsavings account which can be linked to a Kasasa Cash checkingaccount; Kasasa Giver, which allows users to send their rewards tocertain charities; and Kasasa Tunes, which offers refunds oniTunes, Google Play and Amazon purchases.

To reap the benefits of Kasasa products, consumers must receivee-statements, access online banking and meet a debit card usageminimum.

“Those are all things that either save us money or make usmoney. The whole rewards checking Kasasa concept is aboutengagement and allowing the smaller financial institutions to offerthe same kinds of exotic products that the big banks can,” Pollmansaid, adding that Magnolia FCU would not have taken on the researchand development initiatives required to achieve that level ofengagement on its own.

Kasasa has been beneficial to Magnolia FCU members – who Pollmansaid love the program – as well as for the credit union.

“Our relationship with the BancVue people has been veryrewarding,” Pollman said. “They are constantly looking for ways tomake what we do more attractive to our community. Their slogan isto 'win the war against the mega-banks.' It is one of the bestmoves financially we could have made.”

BancVue also helped design Magnolia FCU's website throughanother service it offers, FIRSTBranch, a powerful online branchthat is exclusively available to community financialinstitutions.

“If they already have a great website, we don't tell them to gobuild one, but if they feel that they could use some improvement intheir website, we rebuild it and apply account opening services,”Brannan explained. “That way, a member can sign up directly throughtheir web service. For us, that has been a critical part of theperformance.”

Brannan maintained that a credit union's web presence must be atleast competitive with what consumers can find down the street, orwith a service provider that isn't local.

Magnolia FCU enjoys hovering near the latest technologicaladvances, Pollman noted.

“We try to stay on top of things, or kind of near the front,” hesaid. “We don't like to be the first adopter, but our members liketo have what's new.”

For example, Magnolia FCU recently launched Apple Pay, whichmembers can link to a Kasasa checking account or another MagnoliaFCU account.

“We provide a broad retail strategy that fits what credit unionsare trying to do,” Brannan emphasized.

With Kasasa, credit unions can open themselves up to valuablebusiness opportunities, Brannan concluded.

“In many cases, credit unions are so focused on the retailconsumer compared to their banking brethren, that having greatretail products is even more important for them,” he said. “Weactually see them doing extremely well. We definitely see aperformance improvement there that we don't see at otherplaces.”

BancVue's next move for Kasasa is to provide a more completeretail banking experience for community financial institutions withan emphasis on mobile.