Boost Balances and Member Retention with A2A Transfers

Credit unions and banks offering Account-to-Account (A2A) transfers on their websites have experienced an increase in balances and member retention.

 
 

Credit unions and banks offering Account-to-Account (A2A) transfers on their websites have experienced an increase in balances and member retention.

A2A is the ability to electronically move funds between two accounts held by the same member at different financial institutions. Credit unions that offer A2A transfers have an opportunity to be the central financial institution for members who typically hold accounts at multiple financial institutions.

While the added value of A2A for a member is clear, widespread adoption of A2A has been slow to occur because the benefits to the credit union have been less obvious. There has also been perceived concerns in the outflow of assets by providing an even easier way to transfer funds from a credit union to an alternate institution.

However, several credit unions and banks with unique A2A strategies have found that external transfers may actually bring in more funds than are sent out to other institutions. In a recent American Banker article, Citibank estimated that 80-85 percent of their online A2A transfers are inbound. At Digital Federal Credit Union, that number is even higher - about 90 percent of the total funds transferred through their A2A program in a given month are incoming deposits.

Additionally, the convenience of using the credit union as a central account may prompt more members to use direct deposit of their paychecks. State Employees Credit Union in Michigan offers A2A transfers and has noticed an increase in direct deposits since they began to offer the service.

Since A2A provides members with a convenient means of managing their finances, it is not surprising its implementation would encourage member retention. E*Trade Bank has noticed that their customers who make use of A2A transfers had lower attrition rates than those who did not.

Once the “e-member” has the ability to conveniently transfer funds to and from any of their financial accounts, the credit union can become the most convenient of their accounts. It positions the credit union as the member's financial hub and reduces the incentive for them to take their accounts elsewhere.

Learn more about A2A strategies from a webcast of one of this year's most popular events, Account-to-Account (A2A) Transfer Strategies: Enhancing the e-Member Experience. The event featured three credit union discussing their successful A2A transfer strategies. Find out more by clicking here.

 

 

 

 

Oct. 18, 2004


Comments

 
 
 
  • This is good information. I have been offered and accepted a position at a small credit union. This is the kind of information I need to make the move from the traditional banking environment a successful one.
    Anonymous