Article

Credit Union Services & Products Forum: Engaging a new consumer through multiple channels

Mobile, online and self-service channels offer small- to mid-sized FIs a way to level the banking playing field.

September 21, 2009 by Tracy Kitten — Editor, AMC

It's not enough anymore to just to rely on the branch or online channel to reach members and customers. Today, financial institutions must rely on an assortment of channels that target specific needs and relay specific messages.

That was the message shared last week during the Credit Union Services & Products Forum in San Diego.

Mobile technology, social networking, blogs and advanced self-service marketing and sales have already permeated society at large; but most FIs are just catching on.

Larger financial players such as Bank of America and JPMorgan Chase & Co. have made strides in the mobile banking and ATM spaces, but they still fall short in the social networking and blogging spheres.

Waiting to see how these new advances will be accepted in the marketplace and following the lead of larger institutions is no longer an option for credit unions and community banks, say industry experts.

The emerging mobile channel

Scott Burwell, who led a discussion during last week's forum about the explosion of mobile banking, says the mobile channel is revolutionizing the marketplace, and its future impact will continue to evolve in ways the financial industry cannot predict. As an analyst for Symitar, a Jack Henry & Associates company that provides core processing solutions for credit unions, Burwell says the mobile channel will be as important as the online channel within two to five years.

"Fifteen months ago, when Apple released the iPhone App Store, it changed everything," he said. "Today the App Store has over 1,000 apps for banking."

Burwell says many companies, including mobile providers like Nokia, are making big investments in mobile-banking technology.

"Those mobile providers could become competitors who could take market share if you don't offer a mobile banking solution first," he said.

Some key findings Burwell shares:

Mobile banking has to be a â€˜Triple Play' — which includes SMS/text messaging, application-download and browser-based mobile-banking options. Each offer caters to a different market segment.
Mobile banking must be free to customers and members.

And small- to mid-sized institutions likely have the most to gain, relative to larger FIs, says e-commerce expert Barbara Cure, since advances in ATM technology, online marketing tools and social networking sites offer a way to level the banking playing field with little or no additional cost.

Cure, an e-commerce consultant for NCR Services, said during a presentation about next-gen marketing that credit unions and community banks are not exploiting new channels like social networking sites. They also are not doing enough to collect information about their users.

Today's consumer wants personalized service that she can control. She does not want to rely solely on a visit to a branch or a session online to find out about new financial products and services, Cure says. Today's consumer wants to receive marketing messages through a variety of channels, including the ATM and mobile channels.

"You need to target and personalize your advertising," Cure said. "And you need to follow with up with the user once the information is collected, either online or at the ATM."

That information can include anything from preferred banking services to cash-withdraw preferences at the ATM to preferred communication channels, such as mobile or online. The information can then be used to market services to the consumer through electronic channels that weren't considered relevant or did not exist five years ago.

"Marketing is not just paper anymore," Cure said.

Dynamic cross-channel management, as Cure calls it, involves every channel — from mobile to the branch to self-service to online banking and social networking, such as Twitter and LinkedIn. It also involves blogging on an FI's Web site, where customers and members have a forum to post questions and concerns that can be answered and replied to by the FI.

"Social networking is a channel you should pursue, and so is the SMS/mobile channel. And interactive marketing on your ATM is critical," Cure said. "Keep the branding consistent so that it's readily recognizable to your membership."

Credit unions should use the ATM and mobile channels to push financial information out, as well as to pull personal user information in — to enhance customer relationship management and target marketing efforts.

"It could potentially offer a way to collect new members, too," Cure said.

A few bits of information and a mobile number can be collected at the ATM, for instance. From there, the FI can text information about its services to the user, in hopes of bringing that user in to the branch.

Gary Hess, an FI consultant and president of RTE Financial Services LLC, which distributes Web-based software to FIs, also spoke at the forum. He says every top financial trend involves emerging technology and a need to reach younger users.

"In today's environment, credit unions have to decide what they want to be," Hess said. "They can be the same, traditional institution they have always been, or they can embrace new technology to compete with larger FIs. All of the top trends involve emerging technology — the Web, mobile banking, self-service. Over the next 18 to 24 months, mobile banking will be the trend."