|
With Internet usage consistently increasing, the ICUL Service Corporation (LSC) is helping credit unions capture the increased number of potential households conducting online banking with new E-Banking options while capitalizing overall on the trends in electronic services offered by financial institutions.
E-banking is defined as consumers using the Internet to pay their bills and/or view their accounts electronically via their financial institutions’ Web site. According to the Raddon Financial Group (RFG), more than 30 million households now conduct their banking business online. In addition, RFG’s Strategic Planning Study Group’s national consumer survey showed that online consumers who were not already were extremely or very likely to use an online service within one year.
In the “big picture”, LSC is offering E-banking options as the logical next step for its family of products and services to further the greater long-term goal of helping credit unions operate more electronically while following the trends it has seen in its own operations. “As the face of the credit union member continues to change, especially with Generations ‘X’ and ‘Y’, the trend is that consumers are looking for more electronic services,” said Cathy Pettis, LSC Senior Vice President of Operations.
Similarly to its other electronic services, LSC’s E-Banking provides a turnkey, member-friendly solution and economies of scale in pricing. “For all size credit unions, offering home banking is paramount and we see this as one more way that we can help credit unions compete,” said Pettis.
What does this mean for credit unions? For starters, the demand for online banking presents a growing market opportunity. Online members have high value because those who use the Internet for their banking needs have higher balances, use more products that strengthen their loyalty, and gain 24-hour PC access to your credit union’s portfolio of products and services.
On the flip side, financial institutions not on the World Wide Web or offering members desired products and services will slowly lose them to other institutions. In fact, small community banks (with $100 million or less in assets) said in a survey conducted by Grant Thornton that meeting the Internet banking needs of their customers is the third most important factor to their success and identified credit unions as the second-most competitive threat behind other community banks in this arena.
 There is also opportunity for credit union growth in market share for these services. Statistics show that although 45 percent of all credit unions have an Internet presence and have higher penetration in online banking among households with checking accounts, only 15 percent of the nation’s credit unions overall are actually offering home banking products. Consumer understanding and acceptance of how it works and pricing can be key challenges.
“Having a marketing plan for online services is critical and should include well-defined strategies,” said Karen Duffy, LSC Vice President of Sales and Business Development.
Small Credit Union Development grants via the Illinois Credit Union Foundation are also available to credit unions with less than $10 million in assets to assist with product implementation. For more information about LSC E-banking services, please contact Karen Duffy at 630-983-2917 or for details about the Foundation grants, please contact Vicki Ponzo, ICUL Senior Vice President of Member Services at 630-983-3413.
|
