Credit unions work hard to store and protect member data, but how much effort goes into putting that data back to work for them? In a world where information is its own currency, credit unions cannot afford to let any resource go unused.
Roughly three years ago, BCU ($1.7B, Vernon Hills, IL) made a strategic investment in online and mobile technology as a critical part of its future business strategy. Online payments were just one component of that strategy. But the resulting data got the credit union thinking outside the box not only in terms of what services to offer but also in how to channel data from those services to support other goals and efforts.
When it comes to loan recapture and cross-sell efforts, the credit union buys data from the bureaus, but it also ensures it taps its internal data sources as well.
“We definitely look to payees in our payment database, both on the ACH side and the bill pay side,” says James Block, vice president of consumer lending. “We look for situations where members are using their share accounts to pay competitors and then we target those members for recapture offers in order to move those relationships over to us.”
Bill pay data from the credit union’s roughly 22,000 users (11,000 active) has been a successful source of loans for BCU, with response rates for the corresponding direct mail and email campaigns around 50% higher than other generic recapture campaigns.
“With bill pay members, we tend to be the primary financial institution,” says Block. “Bringing over those incremental loan relationships is much easier because we’ve already established the relationship.”
The average bill pay member has 5.5 services with BCU, while a non-bill pay member has fewer than three.
Recapture is only one part of the credit union’s overall loan strategy, but it has contributed to the 7.45% annualized loan growth BCU achieved in 1Q 12, according to Callahan & Associates’ Peer-to-Peer Software.
Gleaning useful, actionable leads out of the sea of information in BCU’s data warehouse is a function primarily handled by the marketing business intelligence team. The credit union’s upcoming roll out of mobile bill pay will expand adoption and these data-driven marketing opportunities even further.
A partnership with PayPal and Wescom Resources Group (WRG) will also provide not only a mobile bill payment option but also the ability to send peer-to-peer (P2P) payments to external institutions, a big priority for BCU membership.
“We have a membership that is primed for remote use,” says Carey Price, vice president of sales and service. “They’re very dispersed, from California to Puerto Rico. Many joined through a SEG and then moved on.”
“When we looked at our No. 1 payment payee through our automated payments, PayPal was at the top of our list, so knowing that our members are already using PayPal, this option made a lot of sense,” she says.
The credit union will integrate the P2P feature into its application. WRG will drive it on the back end, with a nominal pass through charge per user. Senders will be able to email funds to anyone, even if they aren’t a PayPal user.
Federal Financial Institutions Examination Council (FFIEC) multi-factor authentication recommendations also drove several improvements in the area of mobile security, but the credit union was careful to find a balance between being secure and maintaining a great member experience, says Price.
“Mobile apps for tablets and phones are really where we’re putting our attention, time, and money, knowing that is going to supplant some of the online, branch, and call center activity we have,” Price says.
A full mobile wallet is still a ways off for the credit union, but a future solution that works closely with the Isis and Google standard would be an option BCU might pursue when the market is right.
For now, BCU members have plenty of options to enhance their remote experience including PFM software, text banking, an alert suite, a mobile-optimized loan application, and remote deposit capture for mobile.