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CUs Should Be Moving Forward with Mobile - Even Smaller Ones
Tuesday, August 20, 2013 6:50 AM

Thirty two percent of U.S. adults now bank using their mobile phones. Statistics like these indicate that all credit unions should be moving forward with a mobile strategy, regardless of their asset size.

Brad Ganey, chief operating officer of Catalyst Corporate FCU, points to the case study of a $35 million assets credit union in Texas that launched mobile banking and mobile capture services to its membership in April. After four months, Ganey says the credit union is experiencing a monthly growth rate in active users of 42.2 percent.

Ganey said there were key considerations the credit union faced in its due diligence process. Those considerations included determining whether the service would align with the credit union’s overall strategy.

“The first question the credit union had to answer for its board was whether its membership really needed mobile banking,” he said. “The CEO made the case effectively that without mobile, the credit union was not likely to attract new members in the 50-and-under age range and would risk losing current members anxious to take advantage of mobile banking services.”

Other strategic decisions, Ganey said, focused on the cost effectiveness of mobile. “Part of this credit union’s decision-making process was to determine whether mobile banking could serve as an alternative to branch expansion or to spending $20,000 to upgrade to an image-enabled ATM,” he said. “For many members, their cell phones never leave their sides. By incorporating mobile capture into this service, these members are able to deposit checks at any time, without locating a branch or an ATM.”

The credit union also views mobile banking with mobile capture as a tool to maintain relevance and increase deposit participation at their sponsor company. Their strategy includes promoting the service at new hire orientations to increase the number of checking accounts opened, Ganey said.

As the credit union serves 2,800 members from a single branch with seven full-time employees, deploying self-service delivery channels is critical, Ganey said. “To align with this strategy, the credit union determined that their mobile app must support this goal – with a strong end user experience that contains intuitive navigation and appealing graphics, the ability to add new features as member participation increases, and marketing capabilities at sign-on and within the app. The credit union, which opted for both Apple and Android smartphone apps initially, plans to add an iPad app in the future, so members can apply for loans on their tablets,” he said.

Ganey offers several strategies for “mobilizing” credit unions:

  1. Understand your membership – utilize frontline staff;
  2. Establish buy-in from your board through industry and mobile usage data;
  3. Establish baseline requirements and longer term goals for functionality;
  4. Ensure alignment with overall strategy and philosophy (member demographics, branch and growth strategies);
  5. Set vendor selection criteria (their vision and yours, integration with other systems, training and ongoing support, implementation assistance, analytics, cost); and
  6. Determine if mobile can be justified financially (revenue and/or growth opportunities, expense reallocation, and expense reduction).