MADISON, Wis. (2/22/13)--Credit unions are deploying online and mobile banking to enhance the member experience, rather than as a tool for cost reduction, as has been the case with many technological innovations, according to a new white paper from the Filene Research Institute.
The report, "Online and Mobile Channels: Strategies of High-Performing Credit Unions," was developed from a survey of 481 U.S. based credit union executives conducted by Filene in the third quarter of 2012.
Nearly 90% of credit unions surveyed cite enhancing the member experience as a major objective of their online channel efforts. Maintaining competitive parity is a major objective for three-quarters of credit unions, and seven in 10 consider building member trust a major objective.
The report identified the credit unions respondents as Black Belts, Blue Belts and Green Belts, based on the extent to which their information technology departments were committed as business enablers, how well they coordinated with other business functions within their organizations and the extent to which the credit union demonstrated a tolerance or aversion for technology-related risk.
Black Belts, which accounted for 36% of respondents, exhibited a strong commitment as business enablers, had excellent coordination with other business functions and were risk tolerant, said Filene.
Blue Belts (35%) demonstrated a strong commitment as business enablers, had moderate coordination with other business functions and were risk neutral.
Green Belts (30%) were moderately committed as business enablers, had inconsistent coordination with other business functions and were risk averse.
Black Belts and Blue Belts outperform Green Belts in driving adoption of their online and mobile banking offerings. About four in 10 members of Black and Blue Belt credit unions use their credit union's online banking site, in contrast to a third of Green Belt credit union members.
About twice as many Black and Blue Belt credit union members (9%) are banking with a mobile device, compared with Green Belt credit union members (5%). Black Belts also have higher online product application rates than other credit unions. Black Belt credit unions report that about one in five personal and auto loans came in through the online channel in 2011.
The report concluded that credit unions have different styles of technology management and that style predicts online channel strategy.