Consolidation, technology advances, and global commerce have intensified the competition for share of wallet in the financial services industry. As the demand for innovative products and services continues to increase, time-to-market and brand differentiation become key factors for success. The U.S. financial services industry will spend a projected $117.8 billion on information technology in 2005, a $5 billion increase over 2004, according to new research from TowerGroup. The research group finds that U.S. financial institutions are standing at an IT crossroads-one that will greatly impact these firms' ability to grow their business, satisfy customers, manage risk and cope with an increasingly challenging regulatory landscape.

Credit unions turn the switch on

Not to be out serviced by other large banks, credit unions have began their own initiatives to convert the online banking channel into a 24x7 branch in order to sell more products and offer more services. BECU, based in Seattle, WA (with $5 billion in assets and about 400,000 members), launched a self-service Online Member Enrollment application in early 2004. Without marketing and advertisements, BECU enrolled over 3,000 members, and the deposit balances these members now have at the credit union exceed $5.5 million. Plus, they have funded loans and lines of credit over six million dollars for these members.

John Richardson, BECU's IT Manager of Application Development, explains that "both Boeing employees and many people here in the Northwest are very accepting of the online channel." The online channel is so accepted that some of the first new members to sign-up online assumed that the credit union had been offering the service for years. "People just expect to be able to join our credit union online."

Increasing new member satisfaction with a unified account opening process

Credit unions today can evaluate new ways to build relationships with new and existing members. They offer online banking channel with more products and services for their convenience. They can accelerate the in branch application process to 5 minutes flat. The integration of eligibility check, ID verification service, US Patriot Act & OFAC check compliance, credit check and host system interface will allow a branch representative to focus on developing relationships, suggesting pre approved cross sale of deposit and loan products to members and not be caught up with the paper processing or over the phone.

In addition, seamless integration with a credit union's requirements for eligibility, ID checks and credit checks, online funding that is most effective solution for any size financial institution the ability to offer a cutting edge and secure online self-service channel.

The bigger picture with switch kit, A2A and premium account aggregation
While credit unions begin to evaluate the online self-service model for account opening and online funding, the bigger picture identifies how to transition the new member's relationships. Offering easy steps to help the new member consider switching their deposit account and other primary financial accounts is the long-term goal for credit unions. You can set up the member to 'link' the outside financial institution account to his new account and allow him to transfer money from that account into his new account at your institution in an ongoing basis. Add account aggregation services and now your have become the members' premier destination with integrated funds transfer. This added value to the members give them great access to all financial assets and liability accounts inside and outside of the credit union and gives them ability to move money across accounts (A2A) in one simple dashboard.

The ultimate password vault and financial center for members

With sophisticated users, their password vault capability of account aggregation continues to show impressive growth and members are realizing the benefits of switching their relationship to the credit union. First Tech Credit Union, based in Beaverton, OR, (with over $1.42 billion in assets and 134,000 members) has been offering account aggregation since November 2003. Just in a few months of usage, First Tech found user adoption to triple in usage with better service, single sign on and intuitive functionality.

Increase incoming funds
Bellco Credit Union, based in Greenwood Village, Co. (with over $1.5 billion in assets and 147,000 members) discovered the benefits of switching member's assets with integrated funds transfer service. They offered single sign on interface from their home banking solutions. Bellco has found that approximately 70% of A2A transactions their members conduct are inbound transfers. Bellco offers fund transfer service as a stand alone solution as well as an option in their premium account aggregation services. They will continue to expand switching capability online and at the branch.

Strengthening online relationships through enhanced bill pay
The financial institutions continue to aggressively promote free bill pay and bill pay services. Members are realizing the benefits. To stay ahead of competition, integration of bill presentment with bill payment is crucial. Suncoast Schools Federal Credit Union in Tampa, Fla., (with $4.5 billion in assets and 358,000 members) recently launched their enhanced bill pay service with complete package of Electronic Bill Payment with Bill Presentment (eBPP).

Any size credit union can turn the switch on
New online account and switch kit is not for large credit unions that have vast resources to spend on member service. Employees Credit Union ($47 million, TX) has offered online membership and account opening for six months with positive results. "To encourage potential members to join our credit union it was essential to develop a user-friendly online Membership Application, that gave them the ability to fund their new account, and if they met our loan criteria, would seamlessly take them to our online Loan Application," notes Vonda Burkhart, AAP, the VP/CFO of ECU. "For a 47M credit union these services have allowed us to compete with larger institutions, while not having to increase staff or workloads. A true Win-Win."

Everyone is focused on switching relationships using tools that are their dispersal. Cost is affordable and technology is reliable. Are you ready?
 

So the challenge continues with the adage - are we there yet?
uMonitor can get there with any of these services for the best member experience possible.
 

For more information on the uMonitor Switch Kit; New Account Setup & Online Funding and A2A technology trends highlighted above and how they can be implemented in your credit union, please contact Richard Whiddon, Vice President, uMonitor, at (901) 757-1212 x 118 or visit www.umonitor.com. See you at the 2005 CUNA Governmental Affairs Conference (GAC) in Washington DC.