NextCU.com

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.

Given the importance of the e-channel it should go without saying that promotions for eStatement enrollment and credit card products are wasted opportunities when delivered to members who have already adopted. Similarly, a member who has significant recurring credit card balance debt is likely to benefit considerably more by learning about lower-rate debt consolidation options as opposed to the latest CD rate special.

The irony is that for years many credit unions have operated sophisticated MCIF systems to segment and deliver highly targeted messages to members. Ask a person in your credit union’s marketing department today and they are likely to say that the MCIF capability is viewed as an essential resource in the toolbox. We know how these techniques are widely used to segment groups for product specific outbound campaigns (letter & e-mail). In addition, member data is now commonly used within branch or call center core systems to empower front-line staff to convey targeted advice and education while they are interacting with members. Why aren't we using this to help our online members?

I applaud the lead taken by a few credit unions including Fort Belvoir FCU and New England FCU. These credit unions have deployed systems capable of delivering targeted messages to members in all areas of the Internet channel. Methods include displaying pre-selected ‘stacks’ of graphical or text messages in a ranked order based on the individual member’s unique characteristics and anticipated interest needs. This is accomplished by authenticating the individual member (eg. via home banking) while referencing core system and MCIF data to determine the relevant message delivery ‘stack’. It can also happen outside of authenticated channels, without knowing who the visitor is, by analyzing a specific site visitor’s behavioral patterns and history to hone-in on a visitor’s needs and deliver more relevant message content.

While these initiatives are fairly new they are a huge step in the right direction for credit unions. Bravo!

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)