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Checking Account Check-Up
Wednesday, October 26, 2016 6:35 AM

Karen Coble, VP Sales, Catalyst Corporate FCU

While paper checks may be on their way out the door, checking accounts and checking account services remain a vital part of any financial institution—especially credit unions. After all, whether you opened your first one with the birthday money acquired as a kid or decided on one well into adulthood, the checking account story is a tale as old as time.

But with physical checks decreasing more and more (see the Fed's most recent data here), how are financial institutions supposed to engage, attract, grow, and sustain members enrolled in checking account services?

StrategyCorps, a financial technology company based in Nashville, has recognized this challenge and tackled it head-on by tracking and analyzing nearly four million checking account relationships. From this, they’ve developed profound insights into consumer behavior and financial performance that only real-world checking data can provide. All of this data is logged into a database referred to as “The Brain,” which helps the firm develop innovative checking solutions for financial institutions.

“The Brain is able to help us develop strategic solutions to design and build checking strategies that make checking accounts as modern and valuable as possible for both members and credit unions,” said Mike Branton, managing partner of StrategyCorps in this 2016 article by Catalyst Corporate Federal Credit Union.

So, what has StrategyCorps’ data told us?

Mobile and Online Banking Are as Important as Member Services. “More than half of all members are looking for services that tie in seamlessly with their lives,” said Branton, citing a recent study by Accenture. The 2015 North America Consumer Digital Banking Survey shows that 54 percent of customers are interested in banks locating discounts, and 52 percent are seeking proactive product recommendations.

Millennials Matter. Millennial members are nearly twice as likely to switch their financial institution as those in the 35-54 age range and about six times more likely than members over 55. However, 33 percent of millennial members will stay with a financial institution based solely on their satisfaction with an institution’s online and mobile offerings. The Brain shows that the median age of credit union members with checking accounts is 51, leaving an untapped market of millennials waiting to be wooed and impressed by engaging mobile banking services. 

Engage with Banking Services and Lifestyle Services. Checking with Benefits, a service Branton describes as a “modern solution to a classic product,” is a rewards program that can make a credit union’s checking accounts more attractive to members and potential members, strengthen member engagement with the credit union, and generate member-friendly fee income. It employs a customizable app to enhance a checking program with on-demand benefits like geo-locatable discounts, roadside assistance, cell phone protection, and more.

Reward Loyalty. By combining a checking account with a modern rewards-based program, members are able to get more from their credit union. “These lifestyle-based rewards are packaged in a checking account and delivered on a mobile app for members to easily use in their everyday lives,” said Branton. Giving checking account holders something practical they can—and do—use frequently is a benefit to everyone involved.

Checking accounts serve as a gateway for credit union members, giving them a foot in the door to basic financial opportunities. But more than that, checking accounts are necessary for other, more widely used payment services. For credit unions to stay competitive, viable and attractive, offering members checking services they could (and would) use is not just a best practice, but imperative.

Catalyst Corporate is an endorsed five-star business partner of Credit Union Resources Inc., a wholly owned subsidiary of Cornerstone Credit Union League.