Switch Kit Technology – Understanding the Hype

Making it easy for consumers to switch their accounts to your financial institution is a great way to increase member participation.

There has been a lot of talk in credit unions recently about “switch kits.” As a means to increase membership participation and accounts per member, it’s no wonder that credit unions take great interest in perfecting this practice. The term switch kit refers to the process by which a member switches some or all of their accounts to a new financial institution. Switch kits in their most simple form have been around for years, but moving the process online is something new to many credit unions and members.

Here is what can be done with the most advanced switch kit technology:

  • Application and immediate acceptance of membership
    o ID verified, credit checked, OFAC list checked, etc.
  • Immediate funding of new account(s)
    o As much as member prefers (minimum or more)
  • Immediate pre-approval and offering of additional products/services
    o Targeted specifically to the new member’s situation
  • Loan applications completed and accepted

The potential benefits of processing these steps online are huge. Implementing a switch kit on the Internet reduces processing costs, time spent by the member, time spent by the employee, paperwork, and most importantly frustration! While at the same time the switch kit can increase membership, accounts per member, and member satisfaction.

There are still a few pieces of a traditional switch kit process that cannot be easily automated. Moving a direct deposit, closing an account, and changing automatically deducted bills must still be done by notifying the employer, institution, and merchant. This step can, however, be made simpler by allowing a member to fill in a web form that generates the appropriate letters.

Although a few steps may remain manual, the opportunity to automate key pieces of a once complex process should prove to streamline the internal process and increase the likelihood that members will make the switch. A recent Callahan Survey Consortium survey among 14,000 online credit union members revealed that a whopping 43% were interested in moving their accounts from other institutions assuming a comparable or competitive credit union product offering. The opportunity for online switch kits is revealed when reviewing the responses from members when asked the reasons they would not be interested in moving accounts to their credit union:

“Too much hassle to switch / change”

“Just don't have the time to do it.”

“Cost (time as well as monetary) associated with moving accounts.”

These are just a few examples of a commonly held belief that switching accounts is a laborious task not worth the effort. Clearly, members have not taken action due to perceptions on time and complexity required to make the switch. The “always open” convenience of the Internet and reduced effort could have a dramatic impact on these perceived barriers and assist members in taking action.

By establishing a simplified switching process and marketing it effectively, people will be more likely to switch their accounts over. The anticipated result being huge increases in membership, accounts per member, and overall a more actively involved membership base in the cooperative!




July 12, 2004


  • Good information,thanks!
  • Interesting article, but little/nothing in the way of "how to" get it done...
  • Very insightful!