Recent News

Study: Financial Management Tools Drive Returns, Relationships

Ray Birch
August 31, 2010

A study reveals that online financial-management tools drive deeper relationships, attract younger members, and return about $40 annually in additional revenue per user.

Cathy Graeber, founder of the Swimming Upstream consulting firm, came to that conclusion after studying the habits of consumers using an online financial management tool and the impact the service has on the financial's bottom line. Graeber studied five credit unions and three banks that use Intuit's FinanceWorks, but believes the results apply to any online financial-management program.

Graeber contended that the key finding from her white paper, titled "The Bottom-Line Impact of Offering Online Financial Management," is that an online financial management tool brings an additional $40 in revenue per user, compared with those members using only online banking. "When we looked at the attrition rates and product ownership and did the calculation, we found there was a $40 variance in net product profit between members that use FinanceWorks compared with online users that do not use FinanceWorks," she said.

With credit unions' limited budgets, that's an important number to know, suggested Graeber. "With all of the online tools to consider adding, like bill pay and mobile, you really want to know the bottom-line benefit before adding a solution."

Crerdit unions in the study ranged from $1.2 billion to $4 billion in assets, banks from $1.6 billion to $4.3 billion. The case study often refers to data from a $1.2-billion credit union, but Graeber said findings at the credit union were consistent across the seven other financials in the study. Intuit commissioned Graeber to perform the analysis.

Other important findings:

"The main thing we saw is that the use of an online financial-management tool made much more active members," Graeber said. "That's important because every opportunity to get members into your website is a chance to cross-sell. And it gives them the ability to serve themselves, which lowers your costs to serve."

Graeber also pointed out that Gens X and Y consistently, across all eight financials in the study, made up at least half the users of the financial-management program, and in some cases comprised two-thirds of users.

Not only does the study show the advantages of a financial management tool to generate business, it also can be a sound defensive strategy, concluded Graeber. "Besides some of your competitors offering the service, you face third-party sites like Mint and Wesabe who say, 'Don't worry about the bank or credit union and come to us.'"

The white paper can be downloaded at http://www.swimmingupstream.com/.

This article appeared at www.cujournal.com and is reprinted with permission.

Remote Deposit Capture is Focus of New Tech Council White Paper

CUNA Councils
August 24, 2010

Remote Deposit Capture (RDC) promises to extend greater convenience to members while at the same time potentially reducing operational costs and investment in building infrastructure, according to a new white paper from the CUNA Technology Council.

RDC is when a member or business account holder utilizes an optical scanning device, such as a home-office scanner or mobile cell phone camera, to capture (scan) images of checks for deposit, upload them to a computer on site, and through a software application, edit and send the front and back images securely over the Internet to the credit union for processing and deposit.

As noted in “Remote Deposit Capture: Thinking Out of the Branch To Better Serve Members,” RDC is a valuable tool for credit unions that have:

RDC may also prove useful to credit unions that have a small number of branches in comparison to a large field of membership, as is the case with some select employee group (SEG)-based credit unions.

The new white paper covers key points related to RDC and RDC application development, including:

In addition, four credit unions are profiled through in-depth case studies, providing the reader with an understanding of how remote deposit capture functions as well as its primary challenges and advantages.

CUNA Council members are entitled to complimentary copies of these and more than 200 white papers; non-members may purchase the white papers for a price of $50 per copy.

The paper is available online in the white paper section of each council site – select the “Tech” tab.

Ten Ways to Connect with Your Community

Lana J. Chandler
August 23, 2010

Reaching out to the community is one of the best ways to differentiate your branch from competitors. Community involvement helps you show appreciation to local clients, increase your visibility, and give back to your community.

More than Money

Getting involved with your community is more than making donations. Here are ten ways to take it further:

  1. Join business and civic associations and participate in their activities. Attend regular meetings, serve on committees, and go to functions.
  2. Do volunteer work in the community. Actively support local nonprofit organizations. Even if your budget is tight and monetary donations are limited, you can still volunteer your time. Soup kitchens, literacy programs, homeless shelters, and Meals on Wheels are examples of local nonprofits that always welcome help.
  3. Adopt a local school. Educate students on how to manage their money and basic banking skills.
  4. Celebrate the Christmas season with a “mitten tree.” Some institutions call it a “giving tree.” Place a tree in your lobby. Invite people to decorate the tree with new mittens, gloves, hats, and scarves. Donate the items to disadvantaged children in your community. Besides providing needed items for the children, the tree allows employees and clients to get involved with their community and help in a small way. Tip: Partner with schools or community non-profit groups that sponsor outreach programs. You need a credible partner who can ensure the donated items will be distributed to disadvantaged children.
  5. Host an open house. Use the opportunity to fortify relationships with your existing clients, meet new prospects, and showcase your branch's warm and friendly staff.
  6. Hold free seminars aimed at older consumers. Work with your local AARP chapter and coalition for senior citizens to do consumer education seminars. Bring in guest speakers like someone from the state attorney general's office to talk about consumer fraud; have employees talk about topics like investments or estate planning.
  7. Get involved with local housing organizations that help low-income families buy their own homes. Volunteer to counsel these families and individuals about home buying, budgeting, and banking.
  8. Sponsor sports programs of local teams. Encourage the teams to bring in trophies and pictures to display in your lobby.
  9. Rent a booth at local fairs and events. Hand out freebies like bottles of water and fans.
  10. Invite art classes of local schools to exhibit their work in your lobby.

This story appeared in Branch Manager's Letter at www.branchmanagersletter.com and is reprinted with permission. Contact publisher Lana J. Chandler at 304-343-0206 or Lana@BranchManagersLetter.com.

Effective Strategies for Credit Card Pricing is Subject of Latest OpSS Council White Paper

CUNA Councils
August 19, 2010

Credit unions have a real opportunity to gain credit card market share from banks today, according to a new white paper by the CUNA Operations, Sales & Service (OpSS) Council. Even before the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) took effect, big banks were drawing consumers' ire, between the bailouts, their reactions to the economy's effects on their credit card programs and their preparations for the new regulatory environment.

The new paper, “Credit Card Pricing: Effective Strategies for a Post-CARD Act Market,” notes that with a well-designed, competitive value proposition—including pricing strategies that make their cards attractive without posing excessive risk—and a comprehensive marketing/communications plan that trumpets the credit union difference, credit cards can still be a credit union's highest-yielding asset.

This white paper for the CUNA OpSS Council specifically discusses:

It also includes three case studies showing how credit unions' pricing has evolved to fit today's marketplace.

CUNA Council members are entitled to complimentary copies of these and more than 200 white papers; non-members may purchase the white papers for a price of $50 per copy.

The paper is available online in the white paper section of each council site – select the “OpSS” tab.

Regulatory Comment Call: Interim Final Rule - Low-Income Definition

CUNA
August 19, 2010

The National Credit Union Administration recently adopted an interim final rule.  NCUA amended the definition of "low-income members" to clarify that, in determining a credit union's low-income designation, the comparison of credit union data (whether individual or family data) must utilize statistical data in the same category.  This means, for example, an individual's income must be compared to median individual income and not to median family income.  Comments are due to CUNA on September 20, 2011 and due to NCUA on October 4, 2011.

> View Full Comment Call at CUNA.org

> Regulatory & Legislative Resources for Council Members

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