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Boosting Consumer Adoption of Online Transactions
by Steve Ely, SVP Worldwide Marketing, S1 Corporation
Technologies such as Internet banking, bill payment, online lending, telephone banking, call centers are no longer "nice to haves" but absolute necessities. If you don't use these electronic services to provide convenience to your members, then you risk losing them - especially younger members - to more technologically advanced competitors. Certainly telephone banking and online banking are the cornerstones of electronic self-service - both are easy to use for the member and low in cost to the credit union.
The real issue is not whether to offer online banking and other electronic services to your members, it is how to make these offerings a success. According to most estimates, penetration rates nationally are in the 10 - 20 percent range. The question is how to drive adoption upward above the 25 percent usage mark or even higher. Of course, it helps if your membership base is comprised of high tech workers, but even "blue collar" credit unions can increase online banking usage if they make a concerted effort. It is important to keep in mind that your efforts will be rewarded - this channel adds a great deal of convenience for the member and huge efficiency gains for the credit union.
The first step is to get everyone at the credit union on board which means that the staff - from top to bottom - needs hands-on training, plus they need to signup and use the service regularly. When asked by a member or potential member how the system works, they need to respond positively and from first hand experience. They must also be thoroughly prepared with signup forms, disclosures, service agreements, online banking guides, welcome kits, etc. Secondly, the credit union must make an across the board commitment to broadcast the message about the program - that means banner ads on the home page, brochures, statement stuffers, direct mail, posters in the branch, buttons, radio ads, IVR/on-hold messages, email marketing, etc. It is critical to get the message out at every member touchpoint, not only during the initial rollout of the product but on an ongoing basis.
According to the TowerGroup, security concerns and general discomfort with banking online are the two biggest reasons that people shy away from online banking. The best way to overcome these unfounded fears is education and training. That means the credit union's staff must be able to effectively demo the product. This usually entails a PC within the branch where members can see how easy it is to use and get some initial training. Seeing is believing in online banking. However education needs to be "taken to the street" as well - if your marketing team does SEG visits or you have a Business Development Officer then they need a laptop that they can use to showcase the service on the road.
Some credit unions have tightly integrated online banking into their new member signup process with impressive results. One credit union that automatically provided new members with a username and password to their online banking program achieved a 20% signup rate within their first year. Employee incentives are also important, whether they are in the form of cash, gift certificates, days off, etc. Some institutions are not tying the incentives to merely signing up, but to the member actually logging and using the system within thirty days or so. Proactive credit unions follow up with users who haven't signed in with postcards or telemarketing efforts. One institution followed up at the sixty-day mark and found that the majority of those people who had not logged in had forgotten their password! A simple reminder and password reset was all that was needed to get them to start using the system. Likewise, a simple script used by call center employees that reminds people that they can check their balances online 7/24 can help drive people to the low cost Internet channel as opposed to the high dollar call center contact.
Once members are signed up and using the system, they need knowledgeable and timely support. No credit union would open a new branch without a branch manager, so it is advisable to establish a "virtual branch manager" position for the credit union's online presence so that members have an easily accessible point of contact for solving any issues. Of course backing up the online branch manager should be some other individuals who are technical and very knowledgeable on all aspects of online banking operations. These people can also make sure that continued employee training takes place. Naturally this means new hires, but should also include periodic visits to department meetings to re-educate employees on the product and any new features that have recently been incorporated. Don't forget member testimonials - it means a great deal to other members when they see "regular people" extolling the ease of use, convenience and security of online banking. Finally, you may want to consider brown bag lunch seminars and senior club training classes to get the word out about the advantages of online banking.
As credit unions consider whether or not to offer more electronic services, member needs and wants should be considered. Statistics have shown that credit unions that are member-focused are performing well by continuing to maintain and add new electronic services. Online banking should be a core product, along with bill pay, e-statements, check ordering and online loan applications with instant decisioning. Credit unions that make these concerted efforts will be rewarded with increased member loyalty and the opportunity to become their members' primary financial institution. While technology can never take the place of personal member service, it is always wise to continually explore ways to utilize technology to add convenience to your members' busy lifestyles. The proper use of technology can serve this purpose as well as strengthen your competitive position. Also, there are the added benefits of improved employee efficiency and productivity when members willingly choose to use electronic delivery channels to serve themselves.
The information in this article is based on an "Boosting Consumer Adoption of Online Transactions " workshop at BAI's Retail Delivery 2002 conference. Steve Ely, senior vice president, worldwide marketing, for S1, led the workshop with Eunice Perry, Internet marketing officer, The Landrum Company; Jerry Harpstrite, vice president, marketing, Farmers & Merchants Bank of Long Beach; and Mike Mackay, vice president of operations, Hudson River Bank & Trust Company.
S1 is a leading global provider to approximately 4,000 banks, credit unions, insurance providers, and investment firms of enterprise software solutions that create one view of customers across multiple channels, applications and segments. S1's Enterprise solutions uniquely combine customer interaction and financial transaction capabilities, resulting in a more compelling experience for the customers and a more profitable relationship for the financial institution. S1 is the only provider with the proven experience, breadth of products, and financial strength to empower financial services companies' enterprise strategies. For more information contact 888.457.2237 or www.s1.com.
First published on BankersOnline.com 3/10/03
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