Remember the first time you logged into Home Banking, paid a bill online, obtained instant loan approval, or moved money between institutions via A2A? If you're like me, experiencing these capabilities were defining moments that forever would shift traditional banking transaction preferences (and expectations) to the online channel.

Well, for me, this just happened again.

I just had the opportunity to try USAA's new check Deposit@Home (see USAA site and flash demo) and I can't say enough positive about the experience. I am now convinced this will be a new sought after online capability in 2007 (perhaps especially given the focus on share growth). My educated guess is that this will become extremely popular in the coming months as more and more financial institutions recognize the opportunities to add significant convenience to members and further reduce high cost in-branch check deposit transactions.

You do need a scanner which will limit some adoption in the short-term (I used a 2 year old $50 scanner from BestBuy...$10 now on eBay)...however, for many the time/effort saved will be reason enough to purchase a scanner.

The process couldn't be more simple (see my screen shots 1 - 2 - 3 - 4):

Continue reading "USAA Deposit@Home - Another WOW moment for 'Net Banking" »

Posted by Scott at 04:20 PM | Permalink | Comments (17) | TrackBacks (0)

Hi, My name is Leigh Anne Terry, and I have the pleasure of working with Scott at Callahan & Associates. He’s asked me to share some space here at nextcu.com to try my hand at exploring some of the next steps in personnel and operations in the credit union community.

I’m running a little fast and loose with my goals on this. Still, my hope is to start sharing some ideas and thoughts about a key asset: credit union employees.

My background is in human resources and project management, and I spent eight years working in a non-profit highway safety campaign. And while the basics are still the same – hiring, training, workplace issues, etc. – the environment is entirely different. Even within the credit union community, there are several variations on a theme when it comes to staffing needs.

One such variation centers on staffing and managing a credit union within an already established retail environment.

When you’re opening a credit union inside a supermarket or department store, it’s almost as if you’re another department within it – deli meats, electronics, cleaning supplies, and cooperative financial services. There’s a blending of identities and customer base – and some of this is what the credit union is trying to capture. If everyone’s shopping here, why not see if we can help them with the checking and savings needs, too?

Continue reading "A new perspective – personnel and operations." »

Posted by Leigh Anne Terry at 02:03 PM | Permalink | Comments (1) | TrackBacks (0)

I just read an interesting article in the December BTN magazine (Hold the Phones: Mobile Commerce is here) that I believe could represent an important collective credit union opportunity. The article takes the position that mobile banking (cell phone, PDA, etc) is finally about to take off as devices are increasingly capable and consumers more comfortable with mobile commerce. Probably not a very bold statement to say that it is only a matter of time before the adoption in this area really takes off...even *potentially* surpassing Home Banking access.

Still, from my perspective, progress on the solution side in rolling-out truly rich mobile banking products, as well as low adoption demand among individual credit unions, has been very slow. This could be a wait-and-see approach given prior expensive experiments in 'mobile banking' in the dot-com glory days. However, Firethorn (a vendor I'm not currently familiar with) is referenced in the article as being a leading downloadable mobile application solution that has captured recent attention from some banks. What is also interesting is that Firethorn has partnered with Cingular Wireless and Checkfree to enable financial institutions to leverage the nation's largest mobile network and bill pay platform for enhanced transactions.

So what is the "Credit Union Opportunity"?

I contiune to be very enthusiastic with the opportunities available through...

Continue reading "A Mobile Financial Cooperative Opportunity?" »

Posted by Scott at 03:24 PM | Permalink | Comments (4) | TrackBacks (0)

Recently I received ING's e-mail announcement about their new e-checking account service - "Electric Orange." The market has been waiting for this for some time now so it doesn't come as any particular surprise. It is worth noting that this represents a slight departure from their prior strategy focus on low-volume transaction product offerings -- the [debated] idea being that low-volume electronic transaction accounts reduce relative service needs and result in further reduced operational costs.

However, to me, it is most interesting to look at how ING designed Electric Orange to meet the basic checking account service needs of online banking consumers -- a group that is already approximately a third of all U.S. households and growing steadily.

If I read the announcement correctly this account offers:

Continue reading "Electric Orange - Covering the bases?" »

Posted by Scott at 01:12 PM | Permalink | Comments (4) | TrackBacks (1)

Ever notice that when you shop on Amazon or search on Yahoo, that the ads, sidebars, and messages reflect pages you looked at not only a few minutes ago, but even months ago? The success of these leading e-commerce sites demonstrates to us the effectiveness of targeted website communications to boost sales and increase vital advertising click-through rates. The concept is simple-- the more we understand the individual website user, the more effective we can be in anticipating and serving their particular interest needs. Why aren't credit union's using this knowledge and technology more effectively?

When it comes to our members in the "e" channel, most of us still employ the mass audience, or one-to-many, approach to communication. Banner ad messages and text hyperlink promotions, for example, are often deployed to convey the general promotions of the period to all members regardless of specific relevance to the individual member.

While this serves to convey the credit union’s marketing needs in a “one-to-many” (or ‘shotgun’) practice, I believe we’re still missing a vital opportunity to more effectively serve our individual members’ needs. This is especially true given the limited time we typically have to communicate with members in the online channel and our general desire to fulfill a trusted financial advisor role.

Continue reading "Whose needs are we really meeting? " »

Posted by Scott at 03:17 PM | Permalink | Comments (1) | TrackBacks (0)

I was glad to see coverage of America's credit unions in yesterday's MSNBC/Motley Fool article. However, I would like to point out a significant inaccuracy in the article that could negatively impact some of America's most successful credit unions. The article makes the incorrect statement that 'not all credit unions are insured' and 'a few credit unions remain uninsured' along with 'Before signing up with a credit union, ensure that it's insured.'

It is correct that not all credit unions are insured through the NCUA. However, ALL U.S. credit unions must be insured per federal and state regulations. If not by the NCUA then they must be insured privately through organizations such as American Share Insurance. Many credit unions have in fact chosen private insurance as a way to provide more insurance benefit to members in excess of the $100K offered through the NCUA (a number that arguably hasn't changed in many years to keep up with the times). A few of the largest and most reputable U.S. credit unions have recently opted away from NCUA insurance to provide their members with greater insurance coverage -- For example, the $3.8 billion dollar Patelco Credit Union in San Francisco, or $832 million dollar Silver State Schools Credit Union in Nevada. FYI, Patelco Credit Union has over 226 thousand members and all deposits are now insured up to $250,000 per account -- covering most of the 20% of deposits that were previously in excess of the $100K NCUA coverage.

I hope to see a swift correction to the article. While considering this, I should point out that it would also be inaccurate to portray privately insured credit unions as unsafe for consumers. This is not the case given the structure, soundness, and government regulation that governs privately insured credit unions and their insurers...however, unfortunately this remains a common misconception. In fact, the current NCUA federal credit union share insurance program is based on the model developed by American Share Insurance privately.

Thus, my recommendation would be to remove the non-insurance bullet point entirely.

More related references:
Why Patelco (and subsequently other CUs) have pursued non-NCUA insurance options to benefit their members:
http://www.creditunions.com/home/articles/template.asp?article_id=819

American Share Insurance (the largest private insurer for America's credit unions for nearly 30 years):
http://www.americanshare.com/

Thank you for your attention to this matter.

Posted by Scott at 10:06 AM | Permalink | Comments (0) | TrackBacks (0)

"Call for credit union access through Post Office network"

...“Everyone who would like access to a credit union should be able to do so through the network. Problems are identified too often, and this would be a good solution. After people had drawn their cash by means of whatever follows the Post Office card account—a similar arrangement, I hope—they could save through credit unions. That would provide all the advantages that the socially excluded do not currently have, and we ignore it at our peril.”

Not until the second or third paragraph in the above article do you realize that this is a UK credit union news release. However, before you dismiss it as irrelevant to US credit unions, I feel it serves as a prime example of the benefits of looking outside our own industry “box” for innovation. It made me think about similar “why not” opportunities for credit unions here in the U.S.

Too often, we focus only on internal industry partners for enhancing service & capability when external practices and relationships may present as much, or greater, opportunity. For example, there are numerous online service strategies & lessons to be learned from consumer e-commerce websites. Yet, I know of only a couple credit unions who attend the conferences regarded as important events for the B2C e-commerce industry.

Instead, we tend to focus on “best practice” and “innovation” only when it directly applies to our industry. This doesn't just apply to individual credit unions but also to the vendors or CUSOs who serve them (Callahans not excluded). Imagine the possibilities of a similar partnership among credit unions and the US Postal Service…or, any other nationwide retail organization?

Think it can't happen? Have a look at USAA Bank's QuickPost service offering "over 4,200 nationwide deposit drop off locations" where deposits "are generally credited the next business day." This innovation is from a relatively new bank that doesn't have a single brick & mortar branch or ATM.

Who is negotiating to give U.S. credit unions this level of community presence?

What are the other opportunities that could be explored outside our industry?

Posted by Scott at 12:22 PM | Permalink | Comments (2) | TrackBacks (0)

The topic of Peer-to-Peer lending has come up a few times in the last month in blogs and e-mail correspondence from my colleagues. I'll refer you to Doug True's blog if you are unfamiliar with the concept since he first made me aware of the issue in his post.

Zopa, a UK-based company, in particular is championing the P2P lending model here in the U.K. using the internet to facilitate the process and create what it calls "a community of like-minded individuals and lend to them and borrow from them in a trusting but secure way." A new online marketplace. An eBay for savers and borrowers.

Presumably this is a new looming threat to the several hundred year-old traditional banking model. Their goal is to pool individuals savings and lend to other individuals at mutually favorable rates after spreading out the risk among enough people. Sounds good to me. But wait a minute, isn't this the credit union core model and advantage in the financial marketplace? As Doug points out in his blog:

Isn't this the same as credit unions? We take money in for deposit to loan it out, right?

Doug is right. But if this is 'our' model and advantage why haven't we had more success at gaining market share over the bankers? Why hasn't a seemingly superior model completely overturned the system in the last hundred years? Can it be that it will take a for-profit company leveraging technology to champion this concept and bring the bankers to their knees?

I doubt it. Here is why:

Continue reading "Zopa for you? P2P Lending is coming soon...." »

Posted by Scott at 08:10 AM | Permalink | Comments (1) | TrackBacks (0)

"Offset Banking" - Why not in the US?

I recently dropped by the local NatWest Bank branch office. NatWest (part of the RBS Group) is the second largest capitalized bank in Europe and had £196B in total assets at year-end 2004 (the parent RBS Group has a combined £757B in total assets...insane I say!).

While waiting in the branch I picked up a brochure for a product they call "Offset Banking." I had heard of this before from some research Callahan had done a year or two ago on the 'One Account' concept but I honestly didn't pay much attention at the time (sorry guys!).

The NatWest brochure begins with the following pitch:

"Just think how clever it would be if all your different bank accounts began to 'talk to each other' in order to achieve one common goal - to save you time and money when paying back your mortgage."

Okay, You've got my interest but how does it work and where's the catch?

Basically, in the simplest scenario, checking and savings account balances are combined to 'offset' the current mortgage loan balance (for mortgage interest payment calculation purposes only). The interest payments on your mortgage are based on the reduced offset value, not based on the actual higher mortgage balance. For example, if my mortgage is $100K and my combined savings/checking are $10K then I only pay interest on $90K of the mortgage.

As a customer I would have to give up the interest I would be earning on my savings/checking accounts but since mortgage loan rates are typically higher and I've eliminated taxes on interest earned on these accounts this also seems to be a benefit. Since the mortgage monthly payments themselves are fixed, any surplus (interest saved) in a given month is used to pay down the mortgage principal. As a result, in theory, I should be able to pay off the mortgage faster.

Continue reading ""Offset Banking" - Why not in the US?" »

Posted by Scott at 08:17 AM | Permalink | Comments (1) | TrackBacks (0)