Reducing transaction costs is high on most credit union agendas.
So it's not surprising that the delivery of statements electronically
is one of the fastest growing Web-based services. But while it can
significantly reduce costs and improve member service, some
institutions are taking a conservative approach to e-Statements.
Fort Knox Federal Credit Union (Fort Knox, KY, $339 million, 62,000
members) is not among them - and the credit union has the
results to prove its aggressive stance is right on target.
''Sometimes it's we, the credit unions, who keep members from
adopting new services,'' says CEO Bill Rissel. ''We assume
members must have things they might not care about anymore. We asked
ourselves: Are we delivering statements in a way that makes sense
with how we do business today? And we answered that question very
differently than some credit unions.'' The results speak for
themselves: Fort Knox will save an estimated $100,000 this year
through e-Statements, using e-Documents technology from its core
processor, USERS Incorporated.
Positioned for Success
When Fort Knox replaced its first-generation Internet banking with
USERS' PCU Internet Banking in June of 2002, e-Statements was an
integral part of the plan. Fort Knox was already storing statement
images through the supplier's Access RMS optical system; the addition
of e-Documents now enabled the credit union to deliver those statements
for viewing on its secure Web site. The software is directly integrated
with USERS' core processing system, automatically flagging the accounts
of members who should receive e-Statements.
Before launching the service, Fort Knox carefully considered how
to position it for optimal results. Instead of asking members for
permission to deliver e-Statements, Fort Knox chose a ''motivational
pricing'' approach. As Rissel notes, ''If you don't give
members an incentive to change their behavior, why should they?''
To encourage such a change, the credit union made the e-Statement
an automatic component of its Branch@Home Internet banking
package, used by 26 percent of members. If Branch@Home users want
a duplicate paper statement, they must pay the credit union's standard,
duplicate statement fee of $1.00.
The aggressive approach didn't cause a backlash; instead, the response
was overwhelmingly positive. ''We've probably gotten three complaints
in total,'' Rissel says. ''Of all the members using online
banking (over 16,000), only about 1,000 have asked for paper statements.
If members are using online banking, they're probably reconciling
their accounts as they go, so they don't need a statement.''
In truth, few of the members with access to e-Statements are actually
viewing them in any given month.
Fort Knox will save at least $100,000 in avoided expenses this
year through e-Statements - a conservative figure based on current
Branch@Home usage. As enrollment inevitably increases, so too will
the savings. Nine months after last summer's launch, Fort Knox is
still signing up 500-600 members per month for Internet banking
- each sign-up representing another opportunity to cut statement
delivery costs, while improving convenience for the member.
Building on this success, Fort Knox intends to leverage the Internet
channel again for more savings by delivering notifications electronically
- informing members of NSFs, PIN changes, and other occurrences
through USERS' e-Mail Services Product. ''Our members will find
out sooner and we'll avoid the expense of paper mailings,''
Rissel says. He views electronic delivery of statements and notifications
as ''a unique opportunity for the member and the credit union
to win.'' And the key to success? ''It's all in how you
For more information about USERS' e-Documents or other technology
solutions for credit unions, send an e-mail to email@example.com
or call 1-800-523-7282.