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Marvelous Mobile [Credit Union Management](Credit Union Management Via Acquire Media NewsEdge) Device-based banking is getting attention and opening the door for further CU-member conversations. Mobile banking has the anywhere -anytime capability to connect members with their financial accounts and to help credit unions keep pace with payment innovations and broaden CU appeal to younger members. Jim Norris adds to that list the "gee whiz" factor that makes this new delivery channel a great conversation starter with potential members. Even the most basic mobile option, SMS texting, has the power to elicit oohs and aahs. "When I'm speaking to a group, I love to demonstrate," says Norris, CEO of Montgomery County Employees Federal Credit Union, Germantown, Md. "I just type in and send BAL. Then I say, 'Wait for it,' and before long, they hear that 'bing."' Now that his CU has also introduced iPhone and Android applications, Norris has even more to show off at Chamber of Commerce, select employee groups and other gatherings. After he pulls out his Android to demonstrate such convenient options as mobile bill-pay, "you get to talking about their banks and all the new fees, which gives me the opportunity to say, 'We're free.' That's a benefit we didn't even think of," he says. "The technology is new enough that it's still a cool thing." Chief Development Officer John Pierson agrees. $81 million, 13,000-member Montgomery County EFCU (www.mcefcu.org) "is not the largest financial institution in the country, so a lot of members are very surprised at how advanced our services are," he notes. "Two years ago, we might have been thought of as a mom-and-pop credit union, but mobile service is helping to change that impression." Room for all Sizes Mobile access offers advantages to large CUs as well. With $3.2 billion in assets and 205,000 members, Ent (www.ent.com) is the largest financial institution in Colorado Springs, Colo., and mobile banking is part of its strategy to maintain that position. With even bigger financial services providers, such as USAA, marketing mobile access to the area's military community, offering superior remote services is a "required product," says CUES member Cathy Grossman, VP/corporate communications. Toward that end, the CU introduced Ent Mobile in June 2010 along with its new online banking platform, developed with ORCC (www.orcc.com), Chantilly, Va. Ent Mobile works in an "app-like fashion" for iPhone and Android owners, who are automatically routed to a special website (m.Ent. com) for an optimized user experience, Grossman explains. Members with other Web-enabled phones are directed to a mobile banking site that provides basic functionality, and "members have the option of linking directly to our full online banking site on all devices." In January, Ent introduced a new mobile feature: access to spending reports that allow members to manage their budgets and monitor spending through ORCC. And, in April, the CU launched Ent Deposit, a remote deposit capture option developed by Vertifi, a division of $1.1 billion EasCorp (www.eascorp.org), Burlington, Mass. Ent gets the word out about these services through traditional and new marketing outlets, from TV, radio and print advertising to Facebook, Twitter and a QR (Quick Response) code in print ads that members enter to go directly to a mobile Web page to download the apps. Members have quickly embraced mobile access. More than 20,000 of the CU's 90,000 active online banking users sign on through the mobile sites, and the Ent Deposit app was downloaded more than 5,000 times in its first six months. Nearly 2,000 members have made more than 4,500 deposits using their camera phones to capture check images. Easing the Way Members are getting comfortable with the first level of mobile banking capabilityas an inquiry engine- asking questions like, "Where's the nearest ATM?" Now CUs should nudge members' comfort zones to include making payments on the run, suggests Tim Daley, senior consultant with CUES Supplier member and strategic provider Cornerstone Advisors (www. crnrstone.com), Scottsdale, Ariz. Daley compares that learning curve to introducing members to online account access and bill-pay, but notes that the adoption rate will likely be accelerated with mobile options. According to a recent Cornerstone survey, 7 percent of financial institutions have introduced mobile access, and about 1 percent of their active checking account holders are using the service. But he expects acceptance to pick up quickly, especially among younger consumers. It took years to achieve a 61 percent enrollment for online access by checking account holders, he notes, "but the jump to mobile is not as hard, and it will happen a lot quicker." Within two years, he predicts, most members will expect their CUs to offer mobile access. In comparing the three options for mobile, Daley notes that SMS texting is the cheapest, least secure, and most widely accessible option, while mobile apps at the other end of the cost scale permit the greatest control over delivering a superior user experience. Access via apps incorporates all the security features of Web access, including sign-on identification and multifactor authentication, along with the ability to identify the phone and track its location. Some providers have built in additional security, such as behavior tracking (is this member usually signing in at 3 a.m. to send a $6,000 payment to a payee he just created?). In the three years Kelly Rodriguez has been working on Fiserv's mobile strategy, she's seen tremendous growth in both the capabilities of this channel and in interest. "Most clients today are looking at deploying the triple play"- SMS texting, Web access, and apps for iPhones, Androids and other smart phones, says Rodriguez, director of strategy and planning/mobile solutions for CUES Supplier member Fiserv (www.fiserv. com), Brookfield, Wis. While early adopters favored the familiar and most widely accessible option for smartphones- a Web site scaled to phone screens- consumers are getting comfortable with the capabilities of specialized programs downloaded to their phones, compliments of Apple's App Store model popularized for iPhones and iPads. Fiserv offers mobile delivery options through its Mobile Money product, developed in partnership with M-Com, a company Fiserv recently acquired. As of early June, 375 financial institutions had signed on to Mobile Money, including 180 CUs. Strategy Drives Implementation The choice between offering one, two or three mobile delivery options "should be driven by strategy- what you're trying to achieve and which user groups you're trying to attract," Rodriguez suggests. "When a credit union is trying to reach the broadest possible authence, it will typically go for all three." Daley agrees. "If it's strategically important to reach out to a specific authence, such as Gen Y or small business, or if that's how they see their world is going, it's in their long-term interest to make the jump to apps," he says. Apps are more expensive to develop and maintain, especially as the devices and operating systems for which they are designed continue to evolve. "It's a fair strategy to start with SMS and WAP (Web access), but credit unions should look for a platform that will eventually get them to apps," Rodriguez advises. That strategy would position CUs to take advantage of (1) new mobile payment and deposit options currently in development and best delivered via apps and (2) specific apps developed to take advantage of the "broader real estate" of iPads and other tablets. Providing mobile access for tablets is "a moving target," she adds. For the relatively small but growing authence, browser access may be the best solution- for now. Given the capability of apps to provide services that are relevant and engaging to users, Rodriguez suggests the future of mobile access may skew in that direction, especially for members in their 20s, 30s and 40s. The devices they choose say a great deal about members' preferences and comfort with mobile access. The first smartphone owners were people who could afford expensive phones, but as prices have come down, so has the age demographic. "Anything mobile appeals to the younger generation," she adds, so it's a good idea to think about mobile capabilities that serve their needs. For example, young members are probably less focused on managing a financial portfolio and more interested in easy access to manage cash. Toward that end, Fiserv is currently developing apps solutions for remote deposit capture and integrating person-to-person payments through its Sashay service into Mobile Money (a Sashay app for iPhones is already available). The provider is also on the bokout for "unique opportunities to leverage the capabilities of the mobile device," specifically in terms of what location services might offer in the realm of payments and offers from participating vendors, Rodriguez says. Location services provide information to members based on their location through the GPS capabilities of their phone, such as pinpointing the nearest ATM or branch. Rodriguez urges CUs not to wait. "Concerns about security are still a big obstacle. By getting mobile banking into your market and getting members comfortable doing things with your credit union, you position yourself as convenient and secure, so that as mobile payments evolve, your credit union has already built comfort and trust with members." Convenience Sells The education process at $180 million Gateway Metro Federal Credit Union (www. gmcu.org), St. Louis, started internally. As a non-Gen-Yer, CEO Larry Pixley admits he didn't own a Web-enabled phone until his credit union decided to roll out mobile access through Fiserv's Mobile Money. Gateway Metro FCU introduced SMS and Web-based access in April 2010 after its employees spent a month testing those services. "How can you promote it if you don't use it yourself?" asks Pixley, a CUES member. Within a year, about 600 of the CU's 16,700 members had signed on for mobile access, and the CU expects to continue to post steady gains in the service, which is promoted largely through its website and newsletters targeted by age; the newsletters geared to members in the 18-46 age range have featured mobile access. Though Pixley notes with good humor that staff call his Web-enabled device "a smartphone with a dumb user," he has embraced the convenience of mobile access. "I can sign on anytime and anywhere. It's a lot quicker than going home and booting up the computer to get to our Virtual Branch- cell phones are always on," he notes. Gateway Metro FCU continues to maintain audio-response phone service for those members who prefer it, but Pixley expects that channel will be the first to be replaced as more members embrace mobile access. On the other hand, he expects the demand for convenient branch access to continue. Opportunities and Threats In the not-too-distant future, mobile services may permit CUs to reach out to small business owners with options to initiate wire and ACH transfers. Daley offers the example of a small employer authorizing this week's payroll from a Web-enabled phone while attending a child's ball game. "It allows them to do their business and live their lives without being tied to the office," he notes. With new opportunities comes the potential for new threats in the form of emerging competitors like PayPal, cell phone providers and merchants looking for ways to insert themselves into the payment stream. As the system currently stands, merchants get the sale and financial institutions get the interchange revenue when customers make purchases with their debit and credit cards. But what happens when consumers have the option to use their phone as a payment vehicle? All the more reason for CUs to start now building trust with members via their mobile channel by offering quick, easy services members are likely to embrace. Daley suggests that CUs with contracts for their online branch or bill-pay services about to expire ought to consider rolling mobile access into their next request for proposals. "These products are getting better with every release, so within 12 to 18 months would be a good time frame," he says. Continued advances in mobile payments will likely mean a larger role for the payments manager in steering the credit union toward the quickest payments route at the lowest cost, adds Daley, coining a new phrase for this challenge- payment velocity expectation. (Read more about having a payments manager at cumanagement.org/0211 welcom etopaymen tscen trai.) "Whoever makes it really easy for members to move money is going to win. Members don't care how you do it as long as you do it quickly," he says. "But you also need to look for the most inexpensive way to fulfill their requests." Functionality like GPS -enabled location finders to link members to the nearest shared branch or surcharge-free ATM no matter where they are in the country underscores a message credit unions have been trying to spread for years, Pierson suggests. "Mobile services can help overcome all the objections people make about credit unions and show that we offer all the conveniences and all the services that every major bank does." Resources Get more at cumanagement.org/04 11 makeyourwebsitemobi Ie and cuman agement.org/0718nmaxingonmobile. Also read "No Credit Cards, No Credit Unions - Just You and Your Phone" from CUES Sky box at http://tinyurl.com/ nocardsnocus. Hear more from the experts at Cornerstone Advisors during the new CUES School of Product and Channel Management(TM) (cues.org/SOPCM), Sept. 28-29 in Chicago. Karen Bankston is a long-time contributor to Credit Union Management. Sheis the proprietor of Precision Prose, based in Stoughton, Wis. (c) 2011 Credit Union Executives Society |