Growing your Membership by Lowering Barriers to Join

Imagine a world where potential members can open and fund new accounts with your credit union at any time of day, from anywhere in the world. It's already possible.

 
 


Throughout the past year, there’s been an increased focus on switch kits as financial institutions strive to lower the barriers to opening new accounts. But what exactly is a switch kit and how can it help your membership? Within the industry, the term “switch kit” can encompass a range of processes, ranging from paper-based forms to complete online account opening and funding systems. Online switch kits typically refer to a process using the Internet to open and fund new accounts online, through an automated system. Some online switch kits also include the capability to generate requests to close accounts at other financial institutions, although a signature is usually needed.

Most vendors offering online account funding systems are reporting a significant increase in their credit union client base over the next year. By the end of 2005, more credit unions of all asset sizes will have implemented this important online tool. While credit unions who have taken the leap into online switch kits are typically not involved in the actual account closing process at other financial institutions, they are making it easier for members to switch their primary account relationship by easily opening and funding their new accounts.

How can you decide if this technology is right for your credit union? While there can be numerous benefits depending on your membership and current process, benefits typically fall into the following categories:

Extend Your Reach
For credit unions with a field of membership that is distributed widely across the US and/or overseas, it’s easier for new members to sign up online. Some members and prospective members may have no little or no access to the branch network. Reaching members at new SEGs can be automated, reducing travel and postage expense. Kiosks and laptops can be used for new account openings at events or through other indirect channels.

The Internet and online banking services have enabled credit unions to meet the needs of consumers who find it inconvenient to conduct transactions during traditional banking hours, extending the reach well beyond the traditional branch network. Potential members who are researching online can easily open accounts at the time of their research, enabling the credit union to reach people who may have opened accounts elsewhere if they had to go directly to a branch.

Greater Likelihood that The Account Will Be Used
A key component of online switch kits is the capability for instant funding, therefore increasing the likelihood that the account will become an active account. No longer is the funding process reliant upon the mail or potential for the member to procrastinate or forget about it. This results in less staff time needed for follow-up. Additionally, once the member has provided their email address as part of the process, email reminders can be sent for any further steps or communications.

Enhance Opportunity for Increasing Account Relationships
During the sign-up process, some systems can recommend products or loans based on the member’s information and credit history. Other products such as debit cards, credit cards and checking can be included at the time the initial account is opened.

Streamline Processes
Online account opening systems incorporate an interface with identity and credit verification databases to enable the credit union to meet both Patriot Act requirements as well as potential fraud. This is done on a fairly automated basis, enabling a faster turnaround and tighter control compared to traditional paper based systems. Credit unions can streamline their new account processes by opening all new accounts – whether by branch, phone, or online - through the internet-based system. This ensures that all applications go through the same checks, reduces the potential for error, and saves time compared to paper-based systems.

 

 

 

Feb. 7, 2005


Comments

 
 
 
  • Third para has a typo and is a little vague. Article is a good, but very general summary, of the capability of a swithing process. Would have been much more dramatic to have profiled each of these features with an actual credit union example doing this along with some numbers. Otherwise it feels just like a theory or another IT application--who knows who will use it or how widespread. Might link to a web page where a switch kit is profiled. chip
    Anonymous
     
     
     
  • Third para has a typo and is a little vague. Article is a good, but very general summary, of the capability of a swithing process. Would have been much more dramatic to have profiled each of these features with an actual credit union example doing this along with some numbers. Otherwise it feels just like a theory or another IT application--who knows who will use it or how widespread. Might link to a web page where a switch kit is profiled. chip
    Anonymous