May 16, 2011

This is bonus coverage from “Click to Join” in the June 2011 issue of Credit Union Management magazine.

iPad and online account opening may be most important for younger consumers. It’s not that older current and potential members won’t use it. They will, both to sign up with the credit union and to open additional accounts. But Gen X and Gen Y may think of easy online account opening as a given, and turn to a financial institution that does offer it rather than go into a branch to stick with you.

Accustomed to opening “accounts” with Facebook, Twitter and the like with a couple of clicks, Gens X and Y just don’t see why they should have to go into a branch to set up an account with a financial institution, explains Tim McAlpine, president/creative director of Currency Marketing, Chilliwack, British Columbia. The company specializes in helping credit unions attract the next generation of members with its Young & Free program and partners with CUES to offer its Next Top Credit Union Exec challenge.

McAlpine says it’s not a matter of Gen Y being lazy. “It’s just how it is.” Accept it, or get run over.

“Think about it,” McAlpine says. “iTunes has 250 million active credit cards on file. We’re now accustomed to one-click shopping–and why not?”

Yet many credit union executives persist in thinking, “This is the way we’ve always done it – why should we change?” They don’t see a great deal of demand from their members for it, McAlpine says, simply because those who would be interested aren’t yet members, and thus can’t be questioned.

And simply offering online account opening isn’t enough, says Edward Guerin, VP/credit union development at Costa Mesa, Calif.-based MeridianLink.

“You must build your Web infrastructure in such a way that it can be fully leveraged as a 24/7 sales and marketing machine,” he says. Too many credit unions gear their home pages to existing members, and that’s a mistake.

“Eighty percent of your homepage should be dedicated to non-member eyeballs,” Guerin says. Twenty percent is sufficient for current members, because the vast majority of the time, they simply go directly to online banking.

“Too many credit unions fail to complement technology with a strategy or site-build that supports the technology,” he adds. “They need to re-look at the entire Web site as non-members.”

Charlie Kroll, CEO of Providence, R.I.-based Andera, says that, for the last few years, most credit unions have been focused on implementing an online account opening system and getting the technology to work, while now the focus is turning to making it work and deriving a return on the investment.

“Just because you make it easy to open an account doesn’t mean that prospective members will want that account,” Kroll points out. “There’s a lot more that goes into acquiring a member than just a great account-opening system. To succeed, credit unions also have to consider initiatives such as generating leads, optimizing conversion and preventing fraud.”

For example, most credit unions designed their websites before online account opening and as a result did not optimize them for converting prospective members. “Most credit union sites are just basic brochures, not effective sales tools,” he says. Credit unions should consider redesigning their Web sites. At the very least, making the link to online account opening more prominent will send numbers up, Kroll says.

He adds that a relationship with an online account opening vendor can help control fraud. For instance, traditionally an identity thief might steal an ID and open as many accounts as possible in as short a time as possible. That time period was limited simply because the thief could only visit so many branches in the course of a day. Online, a thief can open up accounts at dozens – perhaps hundreds – of financial institutions in a single day.

“However, a vendor can see that fraudulent name being used at many credit unions and banks – for example, we see patterns that no individual credit union can see, and can act as a shield for them,” Kroll says

Guerin also believes many CU executives don’t know how to fully leverage mobile devices. For instance, while it isn’t practical to open an account or apply for a loan from a smartphone, a smartphone or mobile device is very useful for post-origination activities, such as status checks, e-signing all documents, and chatting with a member service representative.

iPads also offer more than might be commonly realized. They can be taken to select employee groups and used at events, such as county fairs, to enroll new members, Guerin points out.

John Levy, executive vice president of Linden, N.J.-based Integrated Media Management, a CUES Supplier member, points out that an iPad can be used away from a credit union branch – for instance, at an auto sale -- but also has benefits within each branch. A total account opening set-up allows the iPad to both eliminate printing paper and act as a signature pad – and it’s untethered inside a branch.

Charlene Komar Storey is a free-lance writer based in New Jersey.