Online Services Evolve

The more online services you offer, the more members expect.

Credit unions' online financial services rapidly have grown and evolved in just the past few years. "As online services become more common-not only in the financial world but in every industry-members are more confident about using them," says Juan Batista, director of e-commerce for $700 million asset Apple Federal Credit Union, Fairfax, Va. "While our numbers indicate growth, it's clear we have a lot of work ahead of us."

Adds Grant Woldum, senior vice president/chief infermation officer for $1.3 billion asset Tinker Federal Credit Union, Oklahoma City: "As time rolls on, members are taking electronic services for granted. Now they expect them to be there morning, night, and weekends. That can be a challenge for us."

These executives, plus Jackie Buchanan, vice president of information systems, and Lon Bone, vice president of marketing, for $500 million asset T&C Federal Credit Union, Pontiac, Mich.; and Nancy Entz, assistant vice president of marketing for Tinker Federal, offer insights about where online services are headed.

Q When did you introduce online services?

Woldum: We implemented home banking in 1998, followed by bill pay in 2000. In 2004, we added electronic statements, which allow members to view check images online, and we began taking loan applications online.

We also have an online call center where members contact us through live e-mail and live Web chat. It's a secure channel, so members can give out confidential information that won't be compromised.

Buchanan: We had a fairly simple Web site and home banking, which we implemented in 1996. We revamped our Web site in 2001. We went from a roughly 20-page Web site to a 550-page site that includes educational pieces, online account opening, secure online chats, e-mail marketing, and electronic loan applications. About 90% of our services now are online.

Batista: Apple Federal implemented online services in 1995. At that time it was a dial-up service, and members were required to install the necessary software to connect. Initially, we offered basic account access, transfers, and check clearance. Since 1995, we've added bill payer, e-statements, check images, financial calculators, check ordering, e-alerts, and loan applications.

Q What's driving this evolution?

Woldum: People are more mobile these days. Our members use our services around the globe. Online services are a way to meet the needs of our evolving membership.

Bone: We live in a fast-paced world. Our members are online doing transactions early in the morning and late at night. It's all about convenience and saving time. If I can add 15 minutes of personal time to someone's life, I'm happy.

Batista: Member expectations are driving this evolution. Credit unions have recognized members' demand for the convenience of online services.

Q How has members' use of online services changed?

Woldum: Our culture is becoming more technology-savvy. Many of our members' kids and grandkids are computer-literate. Using online services is more natural than ever before. Every time we've rolled out a new service, members have embraced and welcomed it.

Entz: The word "control" keeps coming up in our member surveys. Members feel online services give them control over their finances, particularly bill pay.

Buchanan: The more you offer, the more members demand. Once you offer a new service, members use it and expect it. They have high expectations. That's a good thing. We've added a lot of features to our Web site from members' suggestions.

Batista: Bill payer and e-statements currently are the two main services attracting members to this delivery channel. We constantly monitor our numbers and offer incentives to promote online services.

Q New directions for online services?

Woldum: There's going to be an emphasis on making sure we have the capabilities to add services as quickly as we can. We're looking at wireless banking. Today we can use a home computer to make inquiries and electronic payments. In the future, we may be able to extend that to home banking access through a cell phone. That kind of service is catching on. We'll be watching it closely to determine when it's the right time to offer that service.

We're also looking at providing more of an integrated approach to member service. In the past, we compartmentalized services. We're moving toward bundling services together for our members. For example, a member eventually will be able to go to our Web site, enter one user identification and one password, and use all types of products and services. We want those products and services to have the same look and feel, and be accessed through a single sign-on.

Batista: There will be more member communication. For example, we'll see more interactive and intelligent Web sites that allow members to do everything they can in a brick and mortar branch. With high-speed Internet access, credit unions now can deliver video to answer members' questions.

Q New features you plan to implement?

Entz: We'll introduce e-alerts, which automatically send e-mails to members when, for example, their accounts fall below a certain balance.

Another service we're looking at is a memberdirected automated clearinghouse (ACH). We recognize that members have accounts elsewhere, and this will allow them to transfer funds to other financial institutions. Credit unions doing this now are receiving lots of praise from their members.

Buchanan: We want our members to be able to do everything online that they can do in a branch. We're developing the business services section of our Web site. We've had an e-business committee in place since 2001 that meets quarterly to discuss e-business initiatives. Members will be able to access business lending, order tickets, and make person-to-person money transfers, among other things. We're constantly looking for partnerships that result in winwin relationships.

Batista: We plan to include secure interactive forms to allow members to complete most applications online. We'll also offer ACH origination and account-to-account transfers online.

Q New tools that provide more robust online services?

Woldum: We're making use of better and faster storage techniques. We use a storage area network that allows us to store more information and to retrieve that information quicker. It provides more robust capabilities for backing up data. That's hard-core technology.

We're also offering Internet cafés-areas in which Internet-accessible computers are available on a free-standing counter in each of our branches. Members can come in to browse the Internet and, hopefully, use our home banking system. It allows them to test-drive our home banking product before they sign up for it.

Q Lessons you've learned about online services?

Woldum: If you're going to offer electronic services, you need to know how much [information] to offer. We offer a minimum of 12 months worth of e-statements and check images. Members appreciate that. It provides them with an electronic view of their finances for an entire year.

We may consider expanding [e-statement and check image histories] to seven years so Internal Revenue Service information is available online rather than in a cardboard box somewhere. We don't offer that currently, but the cost of storage and hardware is starting to decrease. Offering our members more data is a huge value.

Buchanan: Test everything before you roll it out, and get feedback from a lot of people before making changes to your Web site-even moving a log-on button from one part of the page to another. A simple change like that may not seem like a big deal to us, but it may be a big deal to our membership. You always can add, but you never can take away.

Batista: Monitor industry trends and be ready to implement new services. Make sure your online services are solid, with a high percentage of uptime.

Design Web sites that are intuitive and easy to navigate, allowing members to do more with less guessing. Don't offer services just to do it. For example, account aggregation looked like the next big thing a few years ago, and it never took off. Make sure the services you implement match your business plan.

Copyright Credit Union National Association, Inc. Mar 2005
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