Mobile Services a Must-Have

Members expect CUs to keep pace technologically with the big banks.

March 13, 2013

With more consumers turning to credit unions, there is certainly cause for optimism in this corner of the financial marketplace.

According to CUNA's U.S. Credit Union Profile [pdf], last year's membership growth of 2.1 million is the highest in more than a decade—proof that consumers are attracted to the personal service, lower fees, and higher dividends that most credit unions offer.

How can your credit union get its fair share—or an even bigger slice—of the pie?

Looking to innovative technology such as mobile banking and payments can help you grow market share and differentiate your credit union from competitors.

However, it’s no longer sufficient to view your competition in terms of other credit unions and community banks. When it comes to the products and services you offer members, you must also go toe-to-toe with the large, national banks.

Your members expect to find the products they see advertised by those behemoths at your credit union, specifically mobile banking and payments capabilities. But many walk away disappointed.

According to NCUA, just 16% of federally insured credit unions (including 163 with assets of more than $1 billion) reported offering mobile banking to their members at the end of the first quarter of 2012.

By comparison, 73% of the largest 100 U.S. banks offered mobile services as of September 2011, according to a report by First Annapolis Consulting.

Mobile banking is no longer a "gee-whiz" novelty. In 2011, for instance, 42% of smart phone owners used mobile banking and 23% made mobile payments.

Chances are you’re offering your membership basic mobile alerts and transfers. But expanding your mobile services will help you keep pace with competitors.

Mobile bill payment, remote deposit capture, digital wallets, and person-to-person payments are on the verge of widespread availability. Soon, mobile devices will become the primary touch point with consumers.

The use of cash and traditional plastic cards are being offset by mobile payments, which enable consumers and small businesses to make debit or credit transactions via text messaging, Web browser, or an app.

Whether made online, to a recurring payee, or to another individual, mobile payments are becoming a leading way to move money.

Consumers want to seamlessly transfer money back and forth with just a mobile phone or an email address. Increasingly, they expect their credit union to provide this capability.

There’s a power to being digitally connected and able to instantly pay a friend or neighbor, or donate to a charity—and having that capability in your hand.

It’s likely that your credit union gets high marks from members for personal service. But will that advantage be diluted by the ever-increasing banking choices that reduce the need for face-to-face contact?

Quite the contrary. By delivering cutting-edge mobile products and solutions to your membership, your credit union will not only level the playing field with larger competitors, you’ll gain a distinct advantage.

STEVE SHAW is vice president of strategic marketing for Fiserv.