Stats And Real People Tell The Digital Tale

Mobile banking adoption lag? SWBC panelists describe their yen for mobile integration combined with financial education.

 
 

Stats and listicles are the bread and butter of journalism, financial journalism being no exception. Here’s a good example of the latter, from Callahan analyst Liz Furman on technology use and member growth among small credit unions.

And here are some stats: Nearly seven in 10 adults in America own a smartphone, according to Pew Charitable Trusts but only 24% of them have used one to pay a bill. Meanwhile, a 2015 survey by Statista found that 87.9% of U.S. adults did not use mobile banking because they felt like they didn’t need it.

That latest stat was in a blog from core processor FLEX, which itself was cited by CreditUnions.com editor Rebecca Wessler this week in her blog wrapping up our package of how-to articles about credit unions finding success in mobile and other digital banking channels.

Indeed, credit unions, credit union vendors, and credit union journalists tend to talk among themselves, so it was nice to talk to some credit union members instead. SWBC provided two of them, participants in the company’s SWBC Consumer Payments Pool.

Jason O’Brien, senior vice president of payments for SWBC Financial Group, said his firm put together the pool to gather information about the consumers’ use of financial tools. They numbered about 100, and were gathered by a third-party firm in the Austin area, as “well as some people who we just randomly found in a coffee shop in Austin and asked if they would participate,” O’Brien said.

About half of them were credit union members and each agreed to spend about an hour providing feedback to the Texas-based vendor of insurance, investment, and more recently, payments tools to more than 600 credit unions, banks, and other financial services providers.

Meet two of them:

  • Keon Flowers, 43, is single, a member of the Army National Guard and works in human resources and recruiting for two state agencies in Austin. He does most of his banking with USAA, but also is a member of Austin Telco Federal Credit Union ($1.4B, Austin, TX). He landed there through an indirect auto loan and now also maintains a savings account with the credit union.
     
  • Kevin Clark, 54, is a married empty nester with one adult son and works as a project manager for a company that builds software systems for hardware storage. Through his wife’s employment, he’s a member of Randolph-Brooks Federal Credit Union ($7.1B, Live Oak, TX), where they maintain a home equity loan and checking and savings accounts. Clark, however, says his family does most of its banking with Bank of America.

Flowers says he does pretty much exclusively mobile banking except for the occasional trip to an ATM. “I look for ease of use, and fairly quick clearing.” He also would like “just something that gives a good, holistic view of my finances. It’s important to not just see one piece. I like to see it altogether.”

Clark also would like to see all his financial activity – including retirement accounts – in one location. Neither was familiar with the industry acronym PFM or the idea of account aggregation, but O’Brien certainly is and the SWBC executive says that and financial education are some of the ideas his company is working on as it refines its offerings.

Better integrating financial advice into mobile apps is one area SWBC is looking at, with the goal of solving this conundrum: “Aggregation is really a type of educational tool, and we are seeing a certain lack of conversion in getting an account holder onboarded to these types of educational tools,” O’Brien said. “That’s one of the big things we’re honing in on. The tools exist but why are they not being used?”

Awareness is a key, O’Brien said, and RBFCU member Clark agreed. He said he would find relevant alerts useful, especially if they included links to videos or short articles that led to more details on the topics he was interested in at that moment.

And speaking of conversion, Clark also said that’s a path to winning his PFI business once and for all. “The more services the credit union offers, the more likely I am to make that big step away from Bank of America. It also depends on how much BOA (angers me) with their charges and what goes along with all that.”

He says he’s come close a few times, but “at the time I wasn’t affiliated with a credit union. Now BoA is on thin ice with me, because I do have an option.”

Back To The Stats

Credit unions regularly have the opportunity to convert consumers from customers to members, but the competition is increasing from those who specialize in digital services only. In a June 29 article, TheWall Street Journal cites an Accenture survey that says thatof the 11% of consumers who left their bank in the past year, 35% went to a nontraditional banking provider.

Accenture said the polling of 2,800 consumers found that the main reasons for the switch were lower costs and convenience. However, the survey shows that 86% of respondents would use bank branches in the future and want to interact with branch employees.

I asked Flowers and Clark if they, their colleagues, friends, and family were aware of how many credit unions they probably were eligible to join.

“I don’t believe so,” Flowers said. “Not as much as they could be. And I know a lot of people who truly should be aware. Flowers noted that Austin, a town with a large state government, education, and military presence probably offers ample credit union opportunities.

Clark, meanwhile, said that his son, a Texas A&M grad, has moved to Houston and was recently looking for a car loan. “I was like, don’t just go to Bank of America. You need to do your due diligence and shop around,” he said. “You probably have access to a credit union down there.”

 
 

July 11, 2016


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